SOMBA K'E/YELLOWKNIFE - People in Nahanni Butte won't be benefiting from the changes to the federal Food Mail subsidy announced last week, as the community has been removed from the list of eligible communities.

Consumers in some Northern communities may see lower prices as Food Mail subsidies will now go directly to retailers, but under the new Nutrition North program, some communities will only be eligible for a "nominal subsidy" or taken off the eligibility list entirely. - Elizabeth McMillan/NNSL photo

But the exclusion happens when changes to program might have made it more accessible to the Deh Cho community.

The general store is the only option for buying food in Nahanni Butte. Operated by the NWT Business Development and Investment Corporation, food is shipped to the store from Fort Simpson and Yellowknife.

The corporation's CEO Pawan Chugh said the local board that oversees the store ran into problems in the past when they tried to make use of the program.

He said they couldn't take advantage of Food Mail because access to the community was so irregular.

With food being taxied on boats from Fort Simpson when the river is passable and no regular flights, food delivery depends on people taking orders on chartered airplanes and the seasonal ice road.

"The logistics weren't there. There were no chartered flights," he said. "I know they were very keen because it's a cost saving thing and for the community, it's a very good thing."

Chugh said the government subsidy would make it easier to run the store.

"Because of the rate of transportation, the prices are high. We try to keep them low, especially for essentials, the store doesn't put a lot of margin on healthy foods, but it's still important," he said. "It's sad ...we would have liked to use it. It's in the interest of the community to have that option."

Store manager Anna Tsetso agrees. She said any program that makes it easier to buy food for the small store would be a good thing, adding she sometimes has difficulty ordering fresh food.

"I think it would have been a good idea especially because a lot of elders, they're supposed to have fresh fruit and vegetables but it's hard to get it over here, but they ask about it," she said.

Tsetso said she wasn't even aware people in her community were eligible for Food Mail until recently and she was never contacted by anyone about the changes.

Now called Nutrition North, the federal government will no longer subsidize Canada Post to ship food to remote communities. Instead, the $60-million budget will go directly toward offsetting retailers' costs of importing food to eligible communities.

Leo Doyle, project lead for the Food Mail program review team with Indian and Northern Affairs Canada (INAC), said the rates will be different for each community, determined by a formula that will include the distance from Southern suppliers. He said specific rates haven't been set yet but said the new method would give retailers incentive to find cheap shipping rates.

"In terms of being aggressive, in terms of looking for other routes they could be accessing, for Canada Post, it didn't fall within their purview," he said.

This would cut down on two supply chains to retailers, said Doyle.

Ten communities in the Sahtu and Delta are eligible for full Food Mail subsidies, and four others are eligible for partial subsidies, which means they'll receive a subsidy for a one-year trial period to determine how much they need and how often they use it.

He said INAC plans to monitor food prices to see if the subsidy actually makes a difference to consumers.

Wekweeti and Nahanni Butte are the two NWT communities no longer eligible for Food Mail.

"It was simply a case of they weren't really using the program because there are more accessible ways and cargo rates," Dolye said.

Canada Post was in charge of making arrangements with retailers and INAC isn't aware of the specifics of why Nahanni Butte didn't access Food Mail, said Doyle.

"It would have been a case of the cargo rates, flying out of Fort Simpson, the hop to get it there is so short that no one ever saw the need to use the subsidized rate. Going forward, because it's a program with limited resources, if you can get an existing cargo rate that's very competitive, it didn't make sense," he said.

However, Doyle said INAC is setting up an advisory group of Northerners to monitor the program. He said the group will review what communities are using the program and the extent of their needs, making changes to eligibility as needed.

The new program goes into effect April 2011.

Elsewhere in the territory, retailers are looking forward to the changes.

Larry Arnburg, assistant manager of Stanton's in Tuktoyaktuk, hopes the new program will make it easier to order fruits and vegetables.

"It should be a good thing. It'll maybe give stores a bit more responsibility to take advantage of lowering prices," he said. "We have a fairly decent mark up as far as transportation goes but every little bit helps."

He hopes the subsidy could lead to more competitive rates in stores on fresh food. "We'd like to see it as low as possible ... we're customers, too. We have to eat and the more we can keep the prices down, the better it is for everybody," Arnburg said.