NORTHWEST TERRITORIES
The federal government launched the Nutrition North program to make healthy food more accessible and affordable to residents of isolated Northern communities. But a recent report from the Auditor General's office finds it's not meeting either goal.

Northern retailers who get money from the Nutrition North program to subsidize certain foods are supposed to pass the savings onto consumers but Aboriginal Affairs and Northern Development isn't taking steps to ensure this is happening, a new report from the Auditor General of Canada Michael Ferguson reveals. - NNSL file photo

Northerners have voiced concerns over Nutrition North since it replaced the Food Mail program in 2011. Last year, political leaders wrote to the Auditor General of Canada demanding an investigation into the $60 million a year initiative.

The bulk of the program budget goes to Northern retailers to subsidize certain food items and these savings are supposed to be passed onto customers but Aboriginal Affairs and Northern Development Canada (AANDC) doesn't know if this is happening, the report reveals.

The department collects monthly reviews from retailers on food prices and conducts compliance reviews yet doesn't obtain all the necessary data.

Reviewers check to see if the subsidy has been taken off the landed cost of the product but retailers don't have to share information on profit margins.

"This represents a missed opportunity for the department to ensure that the program is transparent," the report states. "The impact of the subsidy may be negated if the profit margin is increased after the full subsidy is applied to the landed cost."

Currently, 103 communities across the three territories, northern Labrador, Quebec, Ontario, Manitoba and Saskatchewan are eligible for Nutrition North.

The department determined which isolated communities receive a full or partial subsidy based on how often residents used the previous food mail program. Communities that aren't serviced by an all-weather road but didn't use food mail were made ineligible.

"Consequently, community eligibility is based on past usage instead of current need," the report states.

The unfair eligibility requirements have led to inconsistencies in the program. The report makes note of two unnamed communities in Northern Ontario located 20 kilometres apart. Both lack year-round road access and are equal distance from the nearest town yet one is eligible for the full subsidy at $1.60 a kg and the other receives the partial subsidy of $0.05 a kilogram.

"We have that same problem in the Northwest Territories. We have communities that are definitely fly-in and are only receiving five cents because they haven't been assessed properly," said Western Arctic MP Dennis Bevington, citing Lutsel K'e as an example.

AANDC officials have begun reassessing ineligible communities and estimate it will cost an additional $7 million a year to add about 50 fly-in, isolated Northern communities to the program.

The audit report revealed other flaws in Nutrition North, including:

- The department went over budget by $6.2 million in the 2012-13 fiscal year and is forecasting a shortfall of $8.2 million this fiscal year. AANDC shifted funds from other programs or activities to cover the additional costs.

- The department has not been kept up-to-date with reports to the public and not all data released was accurate.

- The department is supposed to collect data on the amount of food purchased, including spoilage rates, but doesn't.

- The program aims to get affordable food into isolated communities but it hasn't defined what it means by affordability.

Days before the audit was released, the federal government sang the merits of Nutrition North and pledged to invest another $11.3 million into it over the next year.

AANDC minister Bernard Valcourt continued to praise the program following the release of Auditor General Michael Ferguson's report.

"Data collected from registered retailers and suppliers show that the program is having a positive impact in communities, where, since its implementation, the volume of perishable nutritious food shipped to northern communities has increased by approximately 25 per cent, and the cost of a food basket for a family of four dropped by approximately $110 a month in the first two years of the program," Valcourt stated in a news release.

Valcourt said his department accepts the five recommendations offered in the report and noted that various initiatives are already underway to improve Nutrition North.

Dorothy Gloux, whose lived in Norman Wells for 10 years, said it's a positive sign that the government is committed to addressing issues with the program but she's not optimistic that Nutrition North can be fixed.

"We thought we'd have similar prices to the prices down south, no, not at all," says Gloux, a retiree. "I really wish our food mail would come back. That was our only saving grace up here. You'd order food once a month from the Co-op in Yellowknife and you could eat properly. Here a loaf of bread is still $6, milk is still so expensive, everything is so expensive."

Gloux makes do with help from a friend who is able to get food shipped in from Yellowknife monthly but not everyone is as lucky.

"When I get my shipments from Yellowknife and look at all the fresh product and good meat and decent prices and then I go into (the) store if I'm short on bread or milk, it's like 'ouch, it hurts,'" she said. "I'm sure the Northern store up here does the best they can. When they order huge shipments I'm sure it costs them a fortune. I just don't understand what kind of rates they are getting and maybe by lowering certain things by 5 or 10 cents they feel there are passing things on to us but that's still not enough."

Sahtu MLA Norman Yakeleya says he welcomes Ferguson's report on Nutrition North.

"People in the Sahtu and across our northern territories are fed up with high food prices. I think the former Food Mail Program was better for putting savings in Northerners' pockets," Yakeleya stated in a news release. "It is extremely disturbing that there is no tool to measure the savings companies are getting (under Nutrition North). I have to ask if these savings are being passed onto customers in our small remote communities."

Bevington says he hopes AANDC will fix the issues plaguing the program so it can work for Northerners. However, the department has a lot of work ahead, he said.

"The results reveal it's a complete shamble when it comes to management of a program."

Auditor General's recommendations on Nutrition North

• Aboriginal Affairs and Northern Development Canada (AANDC) should review contribution agreements to ensure retailers provide the department with the information it needs to determine whether savings are being passed onto consumers.
• The department should review community eligibility requirements for the program and reassess communities based on the new criteria.
• AANDC should ensure compliance reviews collect the necessary information and are clearly written and well supported. Staff should monitor the implementation of any recommendations made to retailers in reviews.
• The department should review and update the strategy it uses to measure program success.
• AANDC should consider all five options outlined in its cost containment strategy when faced with financial pressures.

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