A move that will require food retailers in the North to reveal how much customers are saving from the federal government’s Nutrition North subsidy could be beneficial if it boosts consumer confidence, a northern retailer says.
“If it’s going to promote consumer confidence, that’s not a bad thing,” says Duane Wilson, vice-president, merchandising and logistics of Arctic Co-operatives Ltd. in Winnipeg, which has 31 outlets in communities in Nunavut and the Northwest Territories. “One thing it certainly will do is really shed some light on the high cost of flying goods into the North.”
As of next April, retailers under the Nutrition North subsidy will be required to implement a point-of-sale system that will show on receipts how much customers are saving.
Established in 2011 to replace the Food Mail Program, Nutrition North subsidizes air freight for a variety of perishable and nutritious foods such as fruit, vegetables, milk, eggs, meat and cheese, as well as “country” or traditional food commercially-processed in the North such as Arctic char and caribou. Most of the 103 communities eligible for a full or partial subsidy have less than 1,000 inhabitants.
The federal government says the change will make the program more transparent and reassure consumers they are saving money.
Last November, auditor general Michael Ferguson criticized the program for not ensuring that northern retailers pass the full subsidy on to consumers.
An independent advisory board, that was subsequently set up to gauge citizens’ concerns about the program, recommended that customers be able to see the subsidy on their grocery bills.
“We’re confident that the value of the subsidy is being passed on to consumers from our part,” says Wilson. “It’s just going to be a little more clear information on the till tape about what items are eligible and what items are not. If that helps people steer toward options that are better value because they’re subsidized, that’s not all bad.”
The Fédération des coopératives du Nouveau-Québec, which operates co-op stores in Nunavik’s 14 communities, has already implemented a system that shows the subsidies on receipts.
The North West Company, which participates in the program in 67 communities, says a point-of-sale system will show customers they are receiving the full subsidy.
However, Wilson notes that while the subsidies are targeted at freight, several other factors explain the high food costs in the North, including hydro rates that are as much as 30 times higher and wages that are an average 30% higher than in the South.
“There’s probably not many grocery stores in Southern Canada that are trying to survive on $800,000 worth of volume,” he notes. “Should I really expect that (stores in the North) will have the same prices as the Real Canadian Superstore?”