EdinburghNLP/nunavut-hansard-plusplus huggingface dataset:
Is this why we have ended up with a paperwork regime that larger companies are better able to handle because of their economies of scale?
I also want to address what I think is a common misunderstanding about the new program.
I do not think that the Nutrition North Canada Program was designed to bring down the price of nutritious perishable food. It was meant to stabilize the costs of nutritious perishable food at approximately the levels of the previous program. Each retailer negotiates its own freight rate with an airline.
The subsidy is community specific, that is, each retailer in a community gets the same subsidy. Every community has a different subsidy level or rate. In some places, INAC got it right; in some, they didn’t.
INAC will have to constantly monitor this and make adjustments where necessary. Please remember that nutritious perishable food was already subsidized under the old Food Mail Program. The fact that certain products are subsidized is not new.
A subsidy was in place before.
That is why you are not seeing huge differences in the price of the food. I think Mr. Morrison made that point yesterday. I think also that INAC needs to communicate that part of the message about the intent of the program more clearly.
I met the members of the advisory board for the first time two days ago, although I have known some of them for many years. I believe that they are sincere people who will take their responsibilities seriously. They are a resource that I intend to use and direct some of my comments and recommendations through.
I hope that they will meet with this legislature and that you can also use them as a resource.
The Nutrition North Canada Program is what we have and what we have to work with.
I hope that INAC will be open to reconsidering certain details of the program and how it works to maintain its positive features, especially on the point of entry, but to bring back some of the good points of the old Food Mail Program in order to somewhat level the playing field for small businesses.
I will now invite the Member for Quttiktuq, Mr. Elliott, to begin his 10 minutes of general comments. Mr. Elliott, the floor is yours.
Mr. Elliott: Thank you, Mr. Chairman. I thank Mr. Harper for coming today to meet before us.
I would have to say I agree with everything you say.
With working and trying to figure out the program since last year in May when it was first announced, I think those were a lot of the concerns that I had seen with the program.
Coming from three communities, where our transportation system adds to the time for products to get to the community and the costs dealing with freight, again I’m really happy that all of my colleagues were in favour of having the North West Company and Arctic Co-operatives come yesterday because it’s definitely a concern that all of our constituents are concerned about in terms of getting food on the table.
I think a lot of northerners put up with a lot of things that the federal government tells us are changing and when you start taking away people’s choice for food and even having prices so high, it makes you think, “What can we do?”
So to me, the way our invitations were sent out and the way my thinking was, was we would have the two big retailers come and in plain language, we would get the message that we got yesterday.
A lot of the responses, a lot of them were saying that they like the program because they’re standing to gain the most.
And I figured, by having you here today as the small retailer, we would actually get some meat to possible changes and that’s what I’m hoping to get with my lines of questioning today.
I think Nutrition North is here and the Food Mail Program is not going back. The way the structure of the program is laid out, it would not go back to Canada Post; it would always stay within INAC.
I don’t think that’s going to change and I don’t think we have that power, obviously, as a federal government program, but I think we do need to do what you have been saying, find out what needs to be done to make the program function properly and then use the resources. Like I said yesterday, I was hoping that the Nutrition North Canada Advisory Board would come before us to answer questions and have us understand the program, and then provide some feedback as to what changes could be made.
So I think, today, what I’m hoping to get out of our questioning to you is… . You have given us some of it, but I would like to find out a little bit more in terms of if we’re going to make this program work.
What do we need to do in terms of getting messages to the federal government and possibly help the Nutrition North Canada Advisory Board as they go into their positions and become a board?
If they’re as valuable as what our MP has said, they will be a strong resource in helping us change the program and continue to monitor it.
So with that, thank you, Mr. Chairman.
I will now invite the Member for Rankin Inlet North, the Hon. Tagak Curley, to begin his 10 minutes of general comments.
I, too, am very pleased with your presence, Mr. Kenn Harper, and quite delighted to hear your comments in Inuktitut and English that we could all understand.
Your fluency in both languages allows all consumers to be able to deal with the stores, especially from a small retailer. Many Nunavut residents observing our discussions are impacted and they are getting the gist of the message.
How joyous!
Due to this reason, I wanted to speak to this issue in Inuktitut.
Furthermore, Mr. Harper, I would have loved to hear a historical perspective about retail stores from you.
I always enjoy your history articles on polar explorers and merchants and how they started.
I know for a fact that your expertise is not only in the retail industry but also in literature, as your articles about historical events show, which I really enjoy. They are educational and the stories need to be heard by our people.
(interpretation ends) Mr. Chairman, I have a very brief comment.
Certainly I am very grateful also to hear from the much smaller merchant and supplier of goods and services, including food, an important category.
Mr. Chairman, we all recognize that we need smaller companies that will remain and should remain competitive in the free market system that we have.
I will always underline the free market system. Despite the small population that we have, we’re a very strong supporter of the free market, but like any other small business, we see the smaller companies continuing to be put in a very precarious and dangerous situation by the federal initiatives.
That is something that I think Members of the Assembly must protect to try and ensure that fairness does exist because it is a guideline that will ultimately decide who wins in this free market system. It’s just like Canadians experiencing for the first time when the free trade agreements were being signed. The federal government took exceptional measures to protect local markets and so on, and we need to see that this arrangement is exactly that.
Mr. Chairman, before we begin with the questions, I do want to point out that I was uncomfortable because it should have been the Chair who should have ruled yesterday when mildly I was, I think, pointed at as developing a conspiracy theory.
Mr. McMullen kindly alluded to it and that was not fair. I do not say those kinds of things.
In the political world, major policies or programs or changes are not normally done unless there are some prior political plans being shaped, and I think it is confirmed that there had been a prior lobby and consultation. It was confirmed to me by one of our federal colleagues that it was essentially part of the major reason, that is, the airlines were either going to be dropped or go bankrupt unless something happened.
So thank you for reminding Members of the Assembly on this that I am not alone in this theory that I have.
Mr. Chairman, I think we also have an obligation to state to Nunavutmiut what our small business retailers are thinking. For that reason, I think we will want to hear from you during the question phase as to exactly what you think this Assembly should be recommending to the federal government.
When we started deliberating the whole concept of the new program, I can assure you that your advice would have been very useful because many of my colleagues were really scrambling around as to what they were going to do and what they were going to say.
I have been around the political world quite a bit and the office of the MLA is not limited to one approach or this approach. When you’re in this Assembly, you can invite anyone pretty well and for that reason, that was my offer to my colleagues. We can invite anyone we want.
We can invite the federal people; we can invite the merchants and let’s see what they think. I think this exercise is real good.
I think it’s for the first time. It didn’t happen during the First Assembly or the Second Assembly or the Committee of the Whole inviting private individuals or business representatives.
So I want to thank you for being part of that forum to help us shape policies for Nunavutmiut.
I am worried about the impact that this program will have for our free market system.
Unlike the larger markets that we see, which Mr. Kenn Harper alluded to, it is not a luxury. They just don’t shut their stores at convenient times or open up for the weekend.
Smaller merchants will be open much longer and provide essential services that are needed for families of Nunavut. By staying open longer, that is very useful to many of people who may be… .
In the dynamics of the population we have, hunters would come in late occasionally and they need some supplies and get right back first thing in the morning.
So these services are important to us.
So, Mr. Chairman, I will conclude again with my opening statements that we need all of the help we can get because the cost of living is frightening.
I still remain that the new regime with the larger markets will only be good if they brought in supplies at huge volumes. The less volume for the category they qualify for the federal subsidy will not be as significant to them unless they bring in huge volumes of supplies to most communities.
That’s why I used the analogy of bringing in a chicken. They don’t have to wait until the chicken is eaten before they qualify for getting the subsidy.
I believe that as long as it shows on the record that they invoiced the company and the company was paid for bringing in goods and services that do qualify under the new program, they will eventually get their money whether or not it is still sitting on the shelf.
Mr. Chairman, I think Mr. Harper’s comments are really good examples, and I look forward to my colleagues helping Nunavutmiut to bring about a much fairer system.
I think he had indicated to the committee here that the old program had some benefits and it could have been fixed. Most of all, we want to bring about fairness to smaller operators and that is exactly what I hope to do.
Mr. James Arreak.
I also thank Mr. Harper profusely as one of our witnesses who made comprehensible statements about his concerns. I used to have my own small retail business and offered foodstuffs via the Food Mail Program for a number of years, so I personally have experience with this program.
I understand that there were flaws in the old system, but it was mentioned yesterday that the Food Mail Program was broken, that it had to be overhauled and replaced.
We had to come up with a new program altogether, as mentioned yesterday. I believe what Mr. Kenn Harper stated. There were three areas that could have been tweaked to improve the old Food Mail Program, with perhaps some other areas to benefit our communities, because that program benefited a lot of individuals in Nunavut.
I had a conversation today over the phone with someone who runs a small business in my community of Clyde River.
As I mentioned, we don’t have a Co-op, although we do have the North West Company. We have a small business retailer which is owned by our community. The retailer also used the Food Mail Program and they have been using this new Nutrition North Canada Program since it came into effect recently.
However, the small retailer stated that paperwork has increased since the program was introduced and that it is almost impossible to keep up with the paperwork since they don’t have the resources available like the North West Company or the Arctic Co-operatives Limited. They cannot keep up with the paperwork requirements of this new program due to the lack of staff and some rebates have been missed due to the paperwork not being completed. They expect to remain afloat though.
I believe your comments about having to improve this Nutrition North Canada Program for our smaller retailers, including the larger retailers as well.
I thank Mr. Kenn Harper for taking the time out of his busy schedule to come here today for this important hearing.
I again echo my colleagues’ sentiments and appreciation to MLA Elliott for keeping the heat on everybody to come to this meeting over the last couple of days.
I would like to just say that yesterday we did hear from the big businesses. I, too, agree that although Arctic Co-operatives say they’re small businesses, they do have the buying power to help the Co-ops in the smaller communities.
We all know that. At the same time, I do appreciate that in the communities, if you are a member of the Co-op, you do get dividends. Certainly that’s the case in Cambridge Bay.
Getting $100 back or $1,000 back is certainly helpful.
Yesterday I made comments to the two witnesses that a lot of people say that this program is a great program. It replaces a broken system in the Food Mail Program, so everybody should be happy, but the ultimate decision-makers on that would be the consumer.
I’m hearing in my community and in my riding that they’re not seeing any real difference and they’re quite upset that they’re not seeing that difference.
One of the witnesses yesterday commented that the expectations were too high, but whose fault is that?
The expectations were that there would be savings and people would have more to eat at better pricing. We’re not seeing that.
Last month in Rankin Inlet, all of the mayors of Nunavut met at the annual general meeting of the Nunavut Association of Municipalities and Mr. Elliott tabled their resolutions the other day. One of the resolutions was entitled “Food Security.”
I’ll just read a couple of clips from it.
“WHEREAS: Food security is a growing problem in Nunavut;
WHEREAS: 70 % of Nunavut households with Inuit preschool children are food insecure;
THEREFORE IT BE RESOLVED that the NAM urge the Government of Nunavut and the Government of Canada to take the issue of food insecurity seriously; and
THEREFORE IT BE FURTHER RESOLVED: that any government initiatives that directly or indirectly impact food security issues such as the Nutrition North Program and the Poverty Reduction Initiative for example, ensure that food security is a priority objective.”
After doing a lot of research and reading materials and listening to testimony yesterday, I’m finding it very hard to understand the new Nutrition North program. Any time a new system is put in place, there are bound to be some hiccups, but I’m not finding a whole lot of people out there who are saying that this is an easier program.
You talked about higher administrative costs.
I know in my riding of Cambridge Bay, people had more options to purchase food, including contacting southern vendors in Yellowknife, and I understand from my constituents who had those other options that the system was so complicated that these other vendors have said, “No, we don’t want to do that anymore.”
So basically, from what I can understand, this program has essentially eliminated a lot of competition with the higher administration costs. It doesn’t seem to have any of the intended effects. I realize it’s early on but that new program should provide options.
It should support lower food costs, but we’re not seeing much of that.  I appreciate you coming here as a representative of a small business so that you could point out your experience with the program to date and I look forward to having an opportunity to asking you some detailed questions, along with my colleagues.
Mr. Tapardjuk (interpretation): Thank you, Mr. Chairman. I also want to thank you. Welcome to the legislature.
I’m glad you are able to appear before us.
Indeed, I may have questions later on, but I want to comment on this program.
The old Food Mail Program under INAC was specifically towards freight charges and administered through the post office. You had to send your food mail via the post office and that subsidy was paid for the freight costs.
I started contemplating about INAC and the loss of the $60 million subsidy may be one of the reasons why Canada Post is going on strike tonight at midnight. That was my suspicion that the loss of this revenue led to the strike.
One thing we have noted in the past is that ACL negotiates freight costs with the airlines and the rates are never the same for the communities. We wonder why our freight costs in Igloolik are higher compared to Pond Inlet.
Yesterday we heard how the freight cost system works and how it differs.
What we’re discussing today is the freight cost subsidized by INAC. What I have been hearing is that it’s mainly for airline freight costs, but I may be mistaken. We heard yesterday that the subsidy doesn’t cover sealift costs for certain foods.
I’m still unclear on some details. Is INAC going to be subsidizing goods and services ordered for sealift as well or is it going to be for delivery by air only? What will be paid by INAC?
Mr. Chairman, the reason why I ask this is that with the Food Mail Program, people became accustomed to operating through the post office and many people didn’t see the benefits to the consumers.
Due to the familiarity by consumers and due to the dearth of information available, I knew certain details.
What I do know is if residents from the Baffin region wanted to order, the only point of entry was Val-d’Or and no other place, even if there are other locations available at a lower cost, and this was arbitrarily chosen by the federal government.
I don’t know who they were trying to benefit in Val-d’Or in the first place. I don’t know. Perhaps they had good reasons for choosing that site.
We wish to have a comprehensive review of the impact of this program, including keeping an eye on food prices and the cost of living. We keep hearing that prices will continue to increase, especially on a global scale, due to the increasing costs of transportation and fuel.
I’m generally protective of these particular people who have no choice but to shop at the local stores.  Some Inuit who don’t have a large discretionary income cannot place orders directly with their southern retail outlets without assistance.
Only a few families have the ability to place orders. However, most of our parents and grandparents aren’t familiar with this system, so they have no choice but to go to the North West Company or ACL to buy their food and clothing. They generally don’t have the capability to place orders and this diverts the subsidy to the store owners.
Will the federal subsidy program for freight costs via these retailers actually drive down costs for our consumers? If we were to review this, would we see that we are being set up for even higher costs later on?
We’re very concerned about that. I’m aware that the new program is intended to replace the previous Food Mail Program. These are the issues I wanted to speak to and I get the feeling that every one of us will be affected by this new program.
I believe that the old Food Mail Program could have been massaged and tweaked if more people were aware of the benefits of the program, as was mentioned by Mr. Harper. I also believe there were a lot of complaints about the Food Mail Program because there was a lack of understanding about how it worked.
I think we could have made minor changes that would have had a bigger impact on food costs, whether you’re in Grise Fiord, Iqaluit, or Igloolik.
At the current time, with this new program, we may see vastly disparate prices for food based on the transportation costs and distances involved in the communities.
When the appropriate time arrives, Mr. Chairman, I’ll have questions.
Mr. Schell: Thank you, Mr. Chairman. I also am pleased to see Mr. Harper here, who is a well-known businessperson in Nunavut for many years.
Going back to the old Food Mail Program, my understanding of the reason that Val-d’Or was selected was years and years ago, the Liberal government, when Mr. Trudeau was in power, was a loyal Liberal supporter in that area and it was there to create work in Val-d’Or.
That’s why it was set up and that’s why, as far as I’m concerned, nothing was done to correct the program until the Liberals got out of power, but that’s my opinion on that.
Also going back to the North West Company and the Co-operative, they were saying that they went to all of the airlines to negotiate the freight rate, but what a coincidence that Canadian North has all of the Co-ops and Northern has all of the Northern stores.
So I wonder how that worked out. They must have got together and decided who is going to get what because I’m sure that was an open tender there.
That’s a matter of opinion also.
I will have other questions on this.
Like I say, I agree with Mr. Harper that there was nothing wrong with the program other than the staging point.
I know First Air, 10 or 12 years ago, made a proposal to INAC. They would put up a big warehouse in Ottawa and they were also going to put up a big warehouse in Winnipeg and get it easier to get the stuff there.
They were going to deal with INAC to ship it out of there and get everything shipped to Ottawa, everything to Winnipeg, but that was turned down because INAC had to support Dorval.
I will now open the floor to members’ questions and I will again start with the Member for Quttiktuq, followed by the Member for Rankin Inlet North.
Mr. Harper, when you appeared before the House of Commons Standing Committee on Aboriginal Affairs and Northern Development on November 3, 2010, you stated, and this is a quite lengthy quote but I think it’s quite relevant, so I’m going to read the whole thing, “Who benefits from this new program?
You would hope that I would say it’s the consumer. I’m not so sure it’s the consumer.
The big winner, in my view, is the North West Company - owner of Northern stores and North Mart stores - with stores in almost every community.
They have huge purchasing power with whichever airline they decide to ship their cargo.
Money talks and they have money.
They will negotiate the best freight rates with northern carriers because of their volume.
The rest of us will pay higher freight rates and have to set our prices accordingly.
But I do not believe the dominant retailer will substantially undercut our prices. They never have in the past. Rather, they will price the same as us, or a few pennies lower, and their profits will be correspondingly higher.
So this program, in my view, has handed the North West Company a windfall, and for some small businesses a death sentence.”
In the last seven months since you made that statement and I know you have made some reference to it in your opening comments, but do you see smaller merchants having to close their doors?
Mr. Harper.
Mr. Harper: Mr. Chairman, in response to Mr. Elliott’s question, I don’t intend to close my doors because we will find ways to survive and we sell a lot of products other than nutritious perishable food.
But I see the possibility that some stores in more isolated communities may not survive because they don’t have the buying power to negotiate what I’ll call the great freight rate.
So it’s quite possible that a small store or a convenience store that carries nutritious perishable foods would not survive.
I don’t have any examples at hand of this directly, but I think it’s quite possible.
I think that it translates to, again, the consumer, who hopefully, through the program… .