Arctic food subsidy still a problem, says researcher

A research paper suggests that a subsidy program to offset high Arctic grocery bills still hasn't fixed problems Canada's auditor general pointed out a year ago.

"The real missing part is accountability,'' said Tracey Galloway, who studies aboriginal health issues at the University of Toronto.

"There's no mechanism to show how the retailer passes on the value of that subsidy to the customer.''

In a paper presented to a conference of northern scientists on Thursday, Galloway examined changes made by the previous Conservative government to Nutrition North.

Nutrition North is a $60-million federal program that is meant to make nutritious, perishable food more affordable.

In Nunavut, where a one-kilogram bag of carrots averages $6.22, a subsidy is crucial for many families. Statistics Canada reports that nearly 37 per cent of Nunavut families had trouble getting food or missed meals because they couldn't afford to eat.

The Harper government brought in Nutrition North to replace Food Mail, which subsidized the shipper. Nutrition North pays the retailer.

A 2014 auditor general report found there were no guarantees consumers were getting the full amount of those payments. Last July, the Conservatives responded by requiring every grocery bill to show what the unsubsidized tab would have been.

For example, someone paying $6.19 for two kilograms of apples in Salluit in Arctic Quebec would see on the till slip that the price would have been $17.66 without Nutrition North.

READ: Nutrition North retailers must now show savings

Galloway points out that information has always been available. She also notes that northern retailers make deals with shippers, control their own distribution arms and face little competition in remote Arctic communities. That information is all proprietorial and there's no way to know what retailers' true shipping costs are.

"It is not clear to the consumers — and the auditor general has shown it's not even clear to (the government) — how the retailer calculates those costs, what the wholesale cost of food is and how they apply their freight cost to calculate a total cost to the consumer.''

The changes made by the Harper government have done nothing to answer the auditor general's concerns, said Galloway.

"It's really just a public relations exercise.''

READ: Nutrition North board members cause controversy

Derek Reimer of The North West Company, which owns most northern grocery stores, said his company passes the full amount of the subsidy to consumers.

"Overall, our profit margins on Nutrition North products have declined since (the program) was launched,'' he said.

A 2013 compliance report done for the federal government found the company was following the rules.

Reimer said the average price of 1,600 subsidized items across 67 communities dropped almost nine per cent between 2011 and 2015.

READ: North West spending includes more fresh food

Still, Galloway said the lack of competition in most northern communities is a major flaw in the pay-the-retailer model.

"In order for a retail subsidy to operate there has to be significant competition in the market.''

During the recent federal election campaign, the Liberals promised reforms to Nutrition North. In addition to another $40 million in funding, the party said it would ``ensure that it is more transparent, effective, and accountable to northerners and other Canadians.''

A federal spokesman was not immediately available.