Auditor general slams food subsidy program
Has not 'verified that Northern retailers are passing on full subsidy to consumers'
Michele LeTourneau
Northern News Services
Published Monday, December 1, 2014
NUNAVUT
Leesie Papatsie, founder of the Feeding My Family movement, is happy the auditor general's report on the Nutrition North Canada program is finally out and that it clearly states Aboriginal Affairs and Northern Development Canada (AANDC) has failed at making nutritious and perishable food more accessible and affordable in Nunavut and the rest of the North.
A 1.1 kg boneless pork shoulder roast that sold for $27.19 in Arctic Bay could be purchased for $8.86 from a southern supplier. Including the Nutrition North subsidy, the freight cost to get the roast to Arctic Bay would be $2.35. Quttiktuq MLA Ronald Elliott raised the issue in the legislative assembly last week during his member's statement. - photo courtesy of Ronald Elliott |
"It's good, because that's what we've been saying all along. It really says what we've been saying. That the program is not transparent and that it's relying too much on the stores to provide the needed information," said Papatsie.
The release of the Nutrition North audit Nov. 25 was one of seven reports on government programs released by auditor general Michael Ferguson.
"One concern that I have in looking at these audits is that departments need to have a clearer understanding of whether the services they are providing are truly meeting the needs of Canadians," Ferguson said.
According to the audit, Nutrition North is failing in that regard.
"When departments do not fully consider the on-the-ground impact of their activities, they are missing opportunities to verify that they are hitting the mark for Canadians," he said.
Among the criticism leveled at AANDC in the report was the department's inability to illustrate how the federal government subsidy passes to the consumer from the retailers.
Aside from not identifying eligible communities on the basis of need, the report stated AANDC "has not defined affordability nor has it verified that Northern retailers are passing on the full subsidy to consumers."
Nunavut Tunngavik Inc. (NTI) was quick to declare its position after the report's release.
President Cathy Towtongie called on AANDC "to immediately make changes to their Nutrition North Canada program to make it more transparent and accountable to Inuit."
The North West Company, which received 51 per cent
of the subsidy in 2012-2013, was also quick to respond, sending out a news release hours later.
"Under the Nutrition North program, North West passed on to customers $31.7 million in subsidies in 2013. Independent audit of North West's internal process has confirmed that every dollar of subsidies has been passed along to customers," stated the North West Company in a news release.
Asked to provide documentation to support this statement, spokesperson Derek Reimer, director of business development, provided the link to the compliance report on AANDC's webpage.
But the auditor general had this to say:
"(AANDC) did not require information on profit margins, either in its contribution agreements with retailers or through its compliance reviews of retailers, which is necessary to verify that the subsidy is fully passed on to consumers."
Papatsie says that's always been one of her worries, "about how much the stores can give out their information."
Arctic Co-op also responded to the report.
"The Nutrition North Canada Program is a vital consumer freight subsidy program that the Co-op system administers on behalf of the Government of Canada," stated Andy Morrison, chief executive officer of Arctic Co-ops. "The Co-op system has always put people before profit and welcomes the opportunity to further improve its service to and within communities."
In fact, University of Manitoba assistant professor Tracey Galloway made the point in her analysis published in the Canadian Journal of Public Health earlier this fall that it's the Northern retailers that cried foul about the Food Mail program.
"It is difficult to view this high degree of market concentration as significantly less monopolistic than under the old Canada Post contract (under food mail)," wrote Galloway.
Former MLA Ron Elliott has examined Nutrition North inside out. Complicated formulas impede transparency, and without full disclosure of details, such as freight cost negotiated with airlines, it won't be possible to work out how much of the subsidy gets passed on to consumers, he said. And that's just one of many problems plaguing the program.
Elliott is not convinced Nutrition North can be fixed. There's another idea floating around - based on the idea that the subsidy should not be flowing into private enterprise but directly into the hands of those who should and need to benefit.
"Do we have the program set up properly," he asks.
"The best idea I've heard so far and the one I think is amazing is maybe, with all of the statistics and all of the information that we're able to get on food baskets, how much people spend on food, the cost of living ... Is there not some way, and this would ensure the money is passed on, is there not a way, when we do our income taxes each year, of coming up with a number?
"Right now we have a Northern residency deduction. Is there not some way of putting this food subsidy on there?"
Elliott acknowledges that the retailers are trying to pass on savings, but it's an inescapable fact that
they are businesses.
"That's been one of the problems from the onset of the program. You are providing a subsidy to the people who are responsible to board members or shareholders who are supposed to make profits. So there are conflicting interests. How does that make sense?"
Fixes to the existing program, Papatsie notes, is relying on the stores again.
"The other thing they rely on from the stores, as well, is how they price the food basket."
However, Papatsie does think the program can be fixed.
"Oh yes," said Papatsie. "With determination, if they really wanted to fix it, they would fix it. Any government can do anything they really want."
Towtongie objects to the fact that Inuit were "not afforded the opportunity to participate in the redesign of the program.
"NTI plays no role in appointing people to the program's advisory board. NTI does not have any say in how the education program funding is allocated to Nunavut, and NTI did not participate in the restructuring of the eligible items list."
She adds, "In terms of monetary investment, the Nutrition North program is the second largest social program delivered in Nunavut. Income assistance is the largest. This is why it is so important to Inuit."
Towtongie said NTI would raise the issue with AANDC Minister Bernard Valcourt during their next meeting.
Meanwhile, in all official responses, all parties agree with the report's conclusion and recommendations. AANDC's response is embedded in the report itself. The North West Company and Artic Co-op want to participate in improving the program. Private citizens want it to work, keeping in mind the objectives of affordable and healthy foods, with transparency and accountability.
"People need to be healthy and have access to food," said Elliott. "If everyone is working to improve the program, it will."
