NUNAVUT
Calling Nutrition North a "rip-off," South Baffin MLA Fred Schell stood in the legislative assembly March 18 to call on the auditor general to examine the relationship between the subsidy and shelf prices of food.
"I rise today to speak about a terrible injustice, one of the biggest smokescreens and rip-offs ever perpetuated on Nunavummiut," said Schell.
The member representing Cape Dorset and Kimmirut said the major retailers are paying nothing to ship apples, oranges, milk and other perishable items under Nutrition North. They're even making money, he continued.
"There is such a thing as a free lunch but don't get too excited because it's only for a few major retailers," he said.
The subsidy rates are posted on Nutrition North's website and the freight costs are available on the airline websites, he said.
"The full consumer freight rate non-discounted from Ottawa to Kimmirut on our airlines is $5.29/kg. Nutrition North's subsidy for perishable food delivered to Kimmirut is $5.40/kg," said Schell. "Not only would it cost you nothing, you would actually make 11 cents on every kilogram of fresh food shipped. Of course, our two major retailers, the Northern and Arctic Co-operatives Ltd., do not pay the general cargo shipping rate because they are volume shippers and have negotiated much lower rates."
This is happening across all communities, he said.
Schell then described the program as "a corporate welfare for a few retailers."
Under the old Food Mail program, he argued, everyone paid the same rate, just like postage. Why are residents paying 40 to 60 per cent higher food prices as compared to the south when it doesn't cost anything for the retailers to ship the food, Schell asked.
"We all know Nutrition North benefits the retailers the most and it's no surprise these big retailers have come out as cheerleaders for the program," said Schell. "However, if the program was a success and if subsidies would be passed on to the consumers, we wouldn't see protests outside our grocery stores."
Schell then asked Premier Eva Aariak whether her government will address the concerns raised. She answered the territorial government will start a food price survey in 10 communities this month to allow the GN to monitor the cost of a number of food and household items and, more broadly, the cost of living.
Aariak would not commit, at this point, on supporting a motion to ask the auditor general of Canada to investigate the program, stating she will decide only after the food price survey is done.
Duane Wilson, vice-president merchandising and logistics at Arctic Co-operatives Ltd., said it's a "shame" no one bothered to do the research before standing up at the legislative assembly. Whether or not the freight rate is discounted, the shipping rate is higher than the subsidy rate.
"If you take the very same numbers quoted in the (legislative assembly), you add 20.5 per cent for fuel, you add 6.5 per cent for NAV Can, you end up with a very different story than retailers pocketing 11 cents off (Nutrition North Canada) eligible shipments," said Wilson. "To either deliberately or negligently ignore that and then put it out in the public domain like that and make accusations, is, to me, irresponsible."
It's like trying to capture the ownership cost of a car, added Wilson, and deliberately ignoring the cost of gas and insurance.
Reached in Cape Dorset, Schell said he knows the fuel and NAV Canada surcharges were not put in there.
"But you've got to remember, these two retailers get a discounted rate from the airlines, which is going to be a heck of a lot lower than that full rate," he said. "Even if you add those surcharges, once you take into account what they get for a discounted rate from the airlines, it will be cheaper than the subsidy they're getting."
He said he doesn't believe the argument the total shipping rate is higher.
The North West Company directed all questions related to Nutrition North to the federal government.
