EdinburghNLP/nunavut-hansard-plusplus huggingface dataset:
Can you clarify the extent to which your new freight rates with airlines are better than those that were in place under the Food Mail Program? Mr. Chairman, I do realize that this was already touched on earlier, but I want more clarification.
Chairman: Mr. McMullen.
We have negotiated better rates with the airline companies. We have also been able to consolidate shipment points.
One of the key things that we haven’t talked about yet is that in the new system, we will move products further to the best of our advantage by truck or rail because we’re not restricted by certain entry points.
I think your specific question is: how much has our freight rates improved? On a dollar basis, that’s between us and our vendors. It’s a competitive market.
They have improved. Part of the $2 million in consumer savings is related to those retail efficiencies of us having lower transportation costs and also going back to vendors and negotiating better rates with vendors.
So definitely we have an improvement in rates and that’s part of the reduced prices across Nunavut of 6 percent that are in all of our stores today.
I would also just like to ask: does that include local contractors who have contracts with the North West Company to take the Nutrition North program items from the airport to the community and, if so, are they basically generic or do they fluctuate in rates as well per community?
They are not generic. They vary from community to community.
The primary determinant is the load factor, how many pounds are going into that particular store, the second thing would be the distance from the airport to the store, and the third thing would be a factor that now we have instituted, which is really interesting.
With the change with Nutrition North Canada, we are now negotiating with our airfreight companies to deliver at different times of the day.
So because we don’t have, as Mr. Morrison and I have said, to fit into specific time slots for Canada Post inspection, we might take deliveries past midnight in our stores. That allows us to have a better guaranteed service because we’re not restricted to the quarter of time when people would travel.
There are a couple of additional facts that I’m adding to your question, but back to the basics, the local freight handlers are usually annual contracts that we negotiate. There is not a differential rate for them moving a product, whether it’s Nutrition North or bulk product or general merchandizing product, from the airport to the store. It’s all based primarily on the pounds or the kilograms that they move, sir.
I’m not going to ask too many questions at this time. I’m afraid to get direct eye contact from Mr. McMullen.
So I’ll let you move on to other colleagues.
My first question is to both parties.
In smaller communities, your stores carry basic fruit and vegetables and we can’t expect you to carry everything that all of your consumers need and you base these things on the history of what sells in any given community, yet we have consumers in our communities with different dietary needs and some of the products are not carried in your stores on a regular basis.
What does your company do to ensure to meet the needs of customers with special unique diets?
That is a very difficult thing to do.
Those consumers should come to our store managers directly and make requests. Sometimes our store managers do not respond as quickly and as efficiently as they should.
But special dietary needs, such as I believe it was Fort Simpson I was in, we had a customer ask us specifically to bring more diet pop in.
So on a pulsing basis, we did that for them and that was their direct request.
So it’s difficult to manage a product going down to the individual, but if the individual makes a request, we will do our best to expedite that request, sir.
Mr. Morrison: Mr. Chairman, the Co-operatives in the north are very much in the same situation as the North West Company in terms of the degree of products that are carried in each community.
We’re certainly limited by facilities and shelf space, but as a community-based business, Co-operatives pride themselves on being responsive to the needs of their owner members.
If individual members have specific needs, Co-operatives are committed to trying to meet those needs.
The responsibility for ordering products rests with the local Co-op manager and we encourage consumers to talk to the Co-op manager and say, “This is what I need,” and they do their best to try and meet that need.
That was going to lead to my next question or comment, I guess.
Would your stores be willing to entertain… ?
If somebody had special needs, whether it is a special kind of fruit or whatever they want, is it possible that it can be arranged where they could come to your stores on a weekly basis and say, “This is a list of stuff I would like to get for next week.
When it comes in, can you put it aside and this person and picks it up.”?
This gives them the option of being able to get what they want without having to do a special order through the south on their own because some of these people don’t have credit cards and they want to do it that way.
That’s a difficult one. If someone comes to us and asks for a passion fruit or star fruit, the likely answer in that case is no on a weekly basis.
For us to delve into personal shopping at that level where you come in with a specific list… .
If it is a dietetic or health reason, that’s where we have to be compassionate and involve community citizens, but if it’s not related to a specific need, if it’s related to specific cut of meat or a specific fruit, I would say it’s possible but the expense… .
Because we can’t just go out and buy one passion fruit or one star fruit and bring it to that customer, we would have to engage through the whole process and I think it would be exorbitantly expensive for that individual customer.
But if it’s a more common product, we certainly can and there are lot of issues on gluten-free products and products of that nature.
Again, the individual customer, we are not in the personal shopping service, sir.
Mr. Morrison: Mr. Chairman, again it is a difficult question.
Certainly if individuals are interested in case lot purchasing, then it is relatively easy to accommodate.
If it is a single product that there is no market for in a particular community, then it is much more difficult to meet that need.
Co-operatives are always looking to identify products that will sell in a community. If something hasn’t been carried in the past, when a retail store has the capacity, they like to bring in different kinds of products and like to build the demand for a product. Certainly in situations like this, if it’s a special need, then that’s a different story.
If it is just a like, it is really hard to fill that need if someone wants one or two of a particular item.
But we will work with the consumer, the member to try and if they need something, we will bring in a larger supply so it won’t sit on the shelf for a long period of time if they’re interested in purchasing it, and we will try to build up demand so that other people in the community will purchase the same kind of product.
My next question is for Mr. McMullen of the North West Company.
When Mr. Ningeongan was questioning him, he mentioned increasing consumption of nutritional products in the communities.
I’m just wondering if he can explain if there are any ways that the North West Company is trying to promote healthier eating within the communities.
Yes, sir, we are. We’ve had a full-time dietician on our staff for the last three years. Suzanne Hajto has been engaged with numerous nursing stations, health organizations, actively involved with trying to increase the awareness of healthy eating.
Last October, we launched a program called “Healthy Eating: Colour Your Palate.” We used as the principles for that the guidelines from Health Canada, the Canada Food Guide.
What we’re trying to accomplish, sir, as we have said, if you go to our stores now, it’s a small sign package but it says, “If you’re buying bread, these would be the healthier choices for you.” In all of our aisles, in an Iqaluit store, I can take you over there and show you.
What we’re trying to be is saying, “Here’s the guidepost. Here are the guidelines for healthier eating.” And we do cooking demonstrations.
In terms of healthy eating, what we’re trying to do for our communities is awareness.
For the last decade, we have been engaged in Canadian diabetes work and that is to engage our communities in fundraising activities to support Canadian diabetes and heighten the awareness of the diet that’s required for people to either control diabetes or control the onset of diabetes.
We’re very interested in healthy communities. Healthy communities are people who are choosing food that is better for them. That just drives a healthier business community, as far as we’re concerned.
We see the two as very compatible, so we do have our “Healthy Eating: Colour Your Palate” program. We are engaged with the diabetes association and Nutrition North Canada is a further extension of that, sir.
In a recent editorial in Nunavut News/North concerning the Nutrition North Canada Program, it stated that, “Part of the hype of the new system was there would be greater accountability on the part of retailers. We hope that is so, but we have not seen it yet.
Stores must be forced to show Northern consumers line-by-line the breakdown of product cost – base price, shipping cost, stocking and overhead mark-up, and profit – on subsidized items.
That information is vital to targeting the cause of high food prices and truly making basic staples affordable.
We asked the North West Company for this breakdown. The company wouldn’t tell us, saying it was ‘competitive information.’”
My question is to both Mr. McMullen and Mr. Morrison.
Do you agree with this editorial’s perspective, and would you be willing to disclose your profit margins on eligible foods that are covered under the Nutrition North Canada Program?
On a line-by-line item, we’re talking over 4,000 products.
Are we interested in disclosing line by line the cost and profit per product?
No, sir, I don’t think we could.
As provided in the supplemental deck and because we are a privately traded company, our profit margins are well known. Our earnings are 5.6 percent of our sales. Our transportation and our freight and distribution costs are 13.5 percent of our sales.
Our costs of goods sold, the product itself, is 51.5 percent. So we have no problem with that level of disclosure.
But on a line-by-line basis, sir, no, it is a competitive issue.
Quite frankly, the capability of doing that on over 4,000 products per store, per community, times 65 communities that are eligible for Nutrition North Canada at two levels of subsidy, level 1 and level 2, at two levels of food subsidy, level 1 and level 2 there, if you do the multiplier effect of that, 65 communities times 4,000 products times four levels, with all different freight and transportation, it’s an impossible task, sir.
So no, I don’t think we physically could.
I may be incorrect in this but I don’t know if there is a retailer in Canada that could.
Mr. Morrison: Mr. Chairman, one of the options that were presented by INAC when they went through the food mail consultation process was a more extensive subsidy reporting process on cash register receipts.
The consensus of retailers right across northern Canada, and that certainly would include Nunavut, the Northwest Territories, Northern Quebec, and the provinces, is that the capacity to do that does not exist in retail computer systems.
I can certainly confirm from the Co-operative standpoint that we do not have the capacity to do that. Our local Co-operatives do not track profitability on a line-by-line basis. Co-operatives track profitability on categories, but they do not track profitability on line-by-line items.
The costs associated with developing or redeveloping point-of-sale systems and other accounting systems would be astronomical.
I can say, however, that Co-operatives, as community-based businesses, hold annual meetings each year and one of the things that Co-operatives provide is a complete review of financial statements to the members of that Co-operative.
As part of that process, they are providing members with information on revenue, gross margins, expense categories, and actual overall profitability for the Co-operative.
So we understand the need for improved transparency under the Nutrition North Canada Program.
We are committed to providing additional information. However, there has to be a balance between the information that is provided and the costs associated with providing that information. We are committed to working with INAC to find appropriate ways to communicate information, but as a business, we have to ensure that we are providing the best value to our owner members.
My next question is going to be… . I’m a little bit concerned about freight rates.
I guess my question is for Mr. McMullen more because if I go into his store and let’s say I’m buying a boat, the price is going to be listed at a cost of whatever the boat, and then there’s a line item saying, “This is the amount of freight that you have to pay and this is the GST on it. Your total price is X number of dollars.” Is the same process used for buying other goods like in the food department?
Do you come up with a landed cost to the community and then figure out the freight and only add the amount of freight onto the product or do you markup on the freight of products too?
No, we don’t take any markup on freight on food items, and I think that’s what your question was about.
I just got a couple of things. Most of the questions have been asked already and some very good questions. In regard to when I said to you in the freight rates you negotiate with the airlines, I’m just wondering, with both of you, if there are any communities where the negotiated rate is lower than the subsidy that you receive from the government.
I’ll leave it at that right now.
The subsidy, to a large extent, is separate and distinct from negotiations. As Mr. Morrison said in an earlier question, we now have the capability of bundling all of our freight negotiations in the run. So we negotiate freight in totality and the subsidy is then applied to the eligible products.
I hope that answers your question. I’m not quite sure.
Mr. Morrison: Mr. Chairman, I can confirm completely that there are no Co-operative freight agreements in place where the subsidy is greater than the freight rate.
There are no communities. In the initial rates that came out in December of 2010, there was one community in that situation. We went back to INAC and said, “Well, we would love to have a margin on freight before we sell any product.”
We don’t believe that that’s what the Nutrition North Canada Program is all about.
So the answer to your question is no, there are no subsidies greater than freight rates.
I think Mr. McMullen has something to add.
Mr. McMullen, go ahead.
Mr. Shewchuk, that’s a very good question. Earlier on, there were at least three if not four communities where the offered subsidy was going to be more than our freight rate. We went back to INAC and recommended, “Don’t give us that much,” and at the same time, we recommended other communities where we thought it was insufficient.
So that was a process.
I commend INAC on giving not only Andy and myself but all retailers the opportunity to give feedback and say, “Hey, this is too much” or “This is too little.”
So that was a good dialogue process. I don’t know if this is a follow-up question, but I think this has to be worked out because I think one of the things we’ve gotten away from was this was still, kind of across Nunavut, to even the playing field for all communities.
I’m not quite sure we’re there yet, sir, with the program and I think that’s going to take a matter of time.
I can tell you that it doesn’t affect the legislature here, but for example, Paulatuk has a lower cost of milk than Inuvik right now.
So everyone in Paulatuk is ecstatic, but everybody in Inuvik is not so happy because they get it directly by road.
So there are those kinds of things that have occurred that will be ironed out in the first year.
I was going to follow up on that and I still am a little bit too. I think that by you saying what you just said, you have identified maybe the incapacity or the “miscapacity” of INAC establishing those rates to begin with because there were absolutely mistakes made there, in my mind, and somebody didn’t do their homework when they did that.
I think, by us realizing this, there is always room for improvement and there is always room for contribution, consultation, and understanding.
I would just like to follow up with another question and that is for both of you two. What is your policy on items that have a best-before date and when that date has come and gone, what do you do with that product?
Again a great question.
There are two types of dates on products, expiry dates and best-before dates. Expiry dates are more with very perishable and usually nutritious products.
They’re respected 100 percent.
Best-before dates, it was a grey area.
We came out earlier this year… .
One of our general managers was up here at a mayors’ conference, and our policy has been that we don’t sell products that are past the best-before date and expiry date. In fact, when that came up, we did a thorough investigation of all of our stores and discovered that at that point in time, less than .08 of a percent of the products on the shelves were past the best-before date. That is an incredibly high standard that we have achieved.
But we had said publicly that we don’t sell products past the best-before date. We remove those products from the shelf and we’re doing a number of things.
First of all, we’re going back to the vendors and we’re saying, “We have a problem in remote communities.
We need better dating. If we don’t get the product up to the north and get as close to a full year supply, the cost for our customers is exorbitant.
So is there anything you can do?”
We’re dealing with major manufacturers like Kraft and we’re saying, “Can you extend the product? Is it safe?” That process is ongoing.
So right now, any best-before dated product we did pull off the shelf, we’re talking with the manufacturers and we’re saying, “Is there a health risk? Is there a safety concern?”
There are many products, such as coffee, flour, that represent no safety issue at all to the consumer. So what we’re doing now is extend the dating.
The other thing related to that is we are trying to ensure for sealift, because it is primarily a sealift problem, or a winter road in our more southern markets, that we negotiate with the vendors the freshest date, meaning that if it has a 34-week life cycle, it arrives at Valleyfield produced the week beforehand.
In some cases, like Arctic Bay, it’s a 10-week delivery time, even if we get the ship leaving right away. So that gives us situations where we only have 23 weeks of life when it gets to the shelf. Our policy now is certainly to remove that.
Will we sell products that have past their best-before date? Only if we’re certain that there is no health risk to the customer and we’ve got assurances from the manufacturer that that is so.
In the case of, for example, Carnation milk, which I believe has well north of 70 weeks of dating on it, we had in the past, as I think all retailers had, sold Carnation past the best-before date.
So we looked at Carnation milk and we do have Carnation coming back and saying, “It’s still safe to sell,” but we chose not to sell it. What would we do with that product?
If it’s safe, consumable product, no health risk, we will donate it to food banks and we’re going to aggressively address that issue.
What we would like are better dated products, fresher products on our sealift, so it’s a particular problem in the north. If you are talking pop, pop represents no health risk if it’s past the best-before date. We would consider that, but our job is to get the longest dating possible when it arrives in Valleyfield and move forward from there.
Mr. Morrison: Mr. Chairman, best-before dates are a tremendous challenge for retailers in the north, particularly at resupply time when a product is manufactured and sent to the dock.
It has happened where a product arrived in the community and it was already past the best-before date.
We work very closely with our suppliers to ensure that we receive the best dating on the product to ensure that consumers have the best opportunity to purchase the product with the longest life possible.
In recent years, we had a major issue just with Carnation milk where the product arrived in the community past the dates.
In that situation, we went back to our suppliers and said, “You sent us a product that was past an acceptable dating,” and a major claim was filed.
Our objective is to not sell a product that has past the best-before date.
An expired product is a different situation that’s off the shelf immediately.
We sometimes have challenges in the communities to ensure that that happens on a consistent basis as we would like, but certainly the objective is that that best-before product is removed from the shelf.
Actually the intent is to move it before the best-before date arrives so that there is not a challenge and consumers are given the option of purchasing something at a discount.
I think both of your companies have come a long way in that.
I think there are still issues out there, though, that need to be addressed at the community level where there are expiry dates and best-before dates and these are not always being followed as best as they can.
An important point for me too in my community of Arviat is that you see all of these products that are expired go into the dump. We’re talking everything from meats to vegetable products, everything that goes there.
It’s a shame to see that stuff go to the dump, but maybe there are other uses that could be looked at. That could be given for non-human consumption, maybe for dog teams or other interests that may happen. I would just like both of you to expand a little more on how you handle products that you dispose.
Mr. McMullen: First of all, there cannot be any risk to people. That’s the first principle. Secondly, we do engage in giving some of the food now to, for example, the dog teams in Churchill.
So we have engaged in that practice and we should continue that. Third, it’s interesting in the history there have been actually territories that have given us letters of permission to sell products past best-before dates.
It’s a good question. We need some help, actually.
What we do, as Mr. Morrison suggests, we offer a product at a discount as it approaches its best-before date, but some of it passes and we know it’s not a risk to consumers. If we’re talking big boxes of cereal or coffee, we would prefer to sell it at a discount to our communities and if that’s not a viable option, then give it to a food bank as long as there is no risk, but we would embrace suggestions. Some of it will go to disposal.
It has to. That wouldn’t be right.
We have some canned products that we’re now in the process of getting tested to see if it’s still safe for consumption when it goes past its best-before date. We’re again working for the manufacturer. So we’re very open to suggestions on what we do with that product.
We would prefer a large box of cereal, rather than flying it in because it’s so bulky, to sell it in the community at a discounted rate because it doesn’t represent a health risk.
That’s good enough for me.
I’ll leave it at that too. I guess just to follow up finally on that is: if this is happening in the community, what kind of process is there for somebody to go to somebody and tell the Northern or the Co-op store that… ? I suppose they could go to the manager and say, “Listen, you have something on the shelf here that’s expired or outdated or whatnot,” but if that doesn’t seem to solve the problem, what is the next process that they do?
Mr. McMullen: The best process is to go directly to the store manager. If that doesn’t elicit a satisfactory response, we would talk to the president’s hotline. When that comes in, I receive those immediately.