.

Home page

Text size

E-mail this page

IQALUIT - An interim report on the food mail program offered to remote Northern communities proposes eliminating personal orders in order to focus on shipping subsidies for retail stores.

Graeme Dargo, special representative in charge of the review of INAC's Food Mail Program, also found many people don't even know the Food Mail Program exists, and those that are aware of it believe that retailers are drastically marking up their costs despite subsidized prices, according to the report which was released last year as a precursor to the interim report released last month.

The federal food mail program may eliminate personal orders in favour of focusing on shipping subsidies to Northern retailers, such as the Northern store in Arctic Bay.

"There are a lot of people who aren't aware of the program," said review team director Marc-Andre Poisson. "What we do want to make sure is that there is a visibility of this program and people are aware and so retailers are able to pass on this information as well."

The federal report released in late April proposes several changes to the $64.5-million program, up in cost by $8.4-million from last year. One goal is to find ways to make the program more effective, efficient and affordable. The program has needed additional funding since the late 90s on an annual basis. The report projects by 2011-12, "due to rising transportation costs and demand, partly spurred by population growth" funding for the program could top $80-million annually.

Other proposed changes include limiting entry points of food delivery and increasing accountability to ensure retailers are passing savings on to consumers.

Dargo said in the report that consultations with aboriginal organizations and Northerners revealed many people believe personal orders only support "privileged individuals" because a credit card is often needed to place orders and ordering requires the ability to speak English or French.

The report said individual orders make up seven per cent of program shipments, and anywhere from 300 to 400 orders are made from Iqaluit each week.

"We don’t actually promote personal orders," said Fred Hill, manager of the food mail program through Indian and Northern Affairs Canada. "The program was set up to ensure that these foods can be available to people in stores at a reasonable, subsidized prices. We don’t prohibit personal orders but it wasn’t the intention of the program."

Hill said it’s debatable if they removed the personal order option whether prices would go up or down.

Dargo said in the report that retailers do not have to keep records as to how they are passing savings along to consumers.

"I find it unacceptable that the Department invests $60 million in a Program and simply assumes that the subsidy is being passed on," he wrote in the report.

Hill said INAC monitors prices in the store but retailers aren’t obligated to report on their profit margins or mark-ups on produce.

"They aren’t required to do that and aren’t controlled in any way," Hill said. "We rely on competition amongst stores and most communities have more than one store. We rely on that competition for the savings retailers achieve by using the program to be passed on to consumers."

Lloyd Atcheson, Co-op manager in Resolute Bay, said shipping food into town through food mail reduces costs drastically.

"It's over $5 a pound to bring in regular cargo, opposed to food mail (where) it's only 50-something cents for produce and stuff," he said.

A 10-pound bag of potatoes would cost $37.50 in Gjoa Haven if it were not subsidized, according to the report. Potatoes cost $21.39 under the food mail program.

Michael McMullen, executive vice president of Northern Canada Retail Division for the North West Company which owns North Mart and Northern Store retailers, said he wants to see improvements to the program in all areas.

“It’s in our best interest to have the lowest cost structure in the North so our business remains viable,” he said, adding competition is healthy in the marketplace, but lower costs in the stores will stop competition from setting up shop in the North.

“Our customer deserves our due diligence to keep costs in line. Are prices high compared to the south? Of course they are. Are we making a lot of efforts to keep costs down? Yes. Are we satisfied with our efforts? No.”

Resolute resident Sarah Nungaq said she doesn't use food mail because it's too expensive, but she still supports people who do.

"I live alone and don't use it because I've got no money for it," she said. "All my money goes to fuel and bills."

She said that although the local Co-op uses the food mail program, products often arrive in bad condition -- especially meat.

"The old meat they send are outdated and expensive," she said.

The interim report also made suggestions about how to improve the quality of food when it arrives in communities, such as shipping it from different entry points.