EdinburghNLP/nunavut-hansard-plusplus huggingface dataset:
As noted by Mr. McMullen, for months, economists have been predicting that food prices will continue to increase at an alarming rate. Economic instability, political instability, rising fuel prices, increased demand from emerging nations, increases in the number of major storms and natural disasters are all placing increased pressure on the price of food around the world.
We are not immune to these increases in food prices.
Transportation costs are another important component in the cost of food.
In the north, a very large percentage of the cost of food is freight.
We have all seen the impact of higher fuel prices, and I expect that consumers and businesses will see further increases in the price of fuel following the 2011 sealift.
These increases in fuel costs are further compounded because the new Nutrition North Canada Program does not adjust subsidy rates based on fuel price increases. Under the old Food Mail Program, consumers were shielded from fuel price increases because the program covered the cost of the increases. This is no longer the case under the new program.
Another major impact on food prices is the cost of electricity.
The recently announced electricity rate increase of almost 19 percent will have a major impact on food prices in Nunavut. Electricity costs are the second largest operating cost of the Co-operatives in Nunavut. This recently announced rate increase will result in a very dramatic increase in the operating costs of local Co-ops and other retailers.
Businesses have no choice but to pass these cost increases on to consumers.
The Co-operatives in the Arctic are businesses operating in a very competitive marketplace. Our owner members are very proud of what they have achieved in the development of a competitive marketplace in the retail industry.
As part of the rhetoric surrounding the Nutrition North Canada Program, Co-operatives have been described as big business with an unfair advantage compared to other businesses.
Please allow me to set the record straight.
The Co-operatives in the Arctic are not big business. The local Co-ops in the north are small, independent, community owned and community controlled business enterprises.
More than 50 years ago, ordinary people in the Arctic decided to work together through their local Co-ops to provide themselves with essential services and to build their communities. Forty years ago, local Co-ops made a conscious decision to retain their autonomy and independence, but improve their business operations by working together through jointly owned and democratically controlled Co-op federations.
Today those federations in the Arctic are called Arctic Co-operatives Limited and Arctic Co-op Development Fund.
The Co-op system in the Arctic will not apologize to the independent businesses in the north because local Co-ops made smart business decisions to work together, develop much needed support services, and most importantly, to pool their buying power to offer local Co-op members with better value and better prices.
Local Co-ops continue to develop their communities, build much needed community infrastructure, provide employment to people in the north, and retain local Co-op profits in the communities where they were earned.
I am very pleased to report that in 2010 alone, the community-based Co-ops in Nunavut returned $7.4 million of Co-op profits, or net savings as we call it in the Co-op system, to individual Co-op members as patronage refunds. $5 million of that patronage refund was returned to local Co-op members in cash.
Mr. Chairman, much has been accomplished in the last three years. As noted previously, the new Nutrition North Canada Program is not perfect. However, it is an important improvement over the old Food Mail Program.
The Co-ops in Nunavut and across the Arctic are committed to offering good value, competitive prices, and healthy food choices to consumers across the north.
Co-operatives have always passed on to consumers the full value of the Food Mail Program subsidy and will continue to ensure consumers receive the full value of the Nutrition North Canada freight subsidy program.
I urge the Government of Nunavut and the Government of Canada to do everything possible to ensure that the new Nutrition North Canada Program provides good value and quality products to consumers and that the people of Nunavut have good access to healthy nutritious foods at reasonable prices.
Chairman: Thank you, Mr. Morrison.
I will now invite the mover of the motion of invitation to begin his 10 minutes of general comments.
Mr. Elliott, the floor is yours.
I would like to begin today by again thanking all of my colleagues for having supported the motion of invitation and I thank my colleague from Rankin Inlet North, who seconded the motion to invite the stakeholders to the Legislative Assembly earlier this year. It has been very clear from listening to my colleagues that all of us in the Legislative Assembly are deeply committed to ensuring that our constituents have access to affordable food and essential non-food items.
It is also very clear to me that members have been receiving a number of questions and concerns from our constituents concerning the new Nutrition North Canada Program.
Mr. Chairman, during our winter sitting, a number of members tabled documents concerning the Nutrition North Canada Program. These included correspondence from concerned constituents, information on local food prices, and letters to the chairperson of the Nutrition North Canada External Advisory Board.
Mr. Chairman, I hope that the questions and concerns that we raise this week with retailers will help them to work closely with the Department of Aboriginal and Northern Affairs, as well as the Nutrition North Canada External Advisory Board, to find ways of improving this important program.
Mr. Chairman, as you will recall, our Member of Parliament and the federal Minister of Aboriginal Affairs and Northern Development made a major announcement in Iqaluit on March 9 of this year.
In their announcement, they stated that the federal government has, and I quote, “expanded the list of foods eligible for subsidy… to include all food, as well as most non food items until October 2012.”
The federal ministers also indicated that, and I quote, “The expanded list of items will help ensure a smooth transition to Nutrition North Canada and allow for two more cycles of sea-lift to bring goods to Northern consumers.
The Government of Canada is also continuing to explore additional options to assist retailers and suppliers in adjusting to the new program and will be announcing those shortly.”
I expect that the witnesses from retailers will be in a position to update us this week on what progress has been made with respect to these “additional options.”
Mr. Chairman, we will be hearing today and tomorrow from representatives from the North West Company, Arctic Co-operatives Limited, and Arctic Ventures.
The individuals representing these commercial retailers all appeared before a committee of the House of Commons last year on the occasion of its public hearings on the Nutrition North Canada Program.
It will be helpful to learn if their perspective on the program has changed since they provided their testimony to Members of Parliament in the fall of last year.
It will also be useful to have a dialogue on their perspective on the challenges facing smaller retailers.
As many of my colleagues have noted, a number of retailers in the south which used to participate in the Food Mail Program have declined to participate in the Nutrition North Canada Program. I share my colleagues’ concern regarding the impact that this will have on the choices available to our constituents.
Mr. Chairman, I would like to take this opportunity to acknowledge the effort that Mr. McMullen from the North West Company made to travel to Arctic Bay in March of this year prior to the official start of the Nutrition North Canada Program on April 1.
I had the opportunity to discuss the program while we were in Arctic Bay’s Northern Store, and I am sure that the witnesses’ testimony today will benefit our understanding of how retailers are working to help ensure that the products that their companies sell to our constituents are reasonably priced and affordable.
Mr. Chairman, in recent weeks, national attention has been paid to the issue of gasoline prices across the country. I was struck by the comments made by the federal Minister of Industry at the time, who stated that the way gas prices are set is not at all clear to Canadians.
He also announced that he would, and I quote, “be asking refiners, distributors and retailers to come to Ottawa to appear before a parliamentary committee and explain their pricing methods to Canadians.
Members of Parliament will get the chance to ask them the common-sense questions we’ve been hearing from Canadians.”
Mr. Chairman, Nunavummiut have exactly the same concerns when it comes to the price of food and I sincerely believe that it is our responsibility as their elected representatives to ask similar common sense questions to our witnesses this week.
As the witnesses today are well aware, many of our constituents believe that retailers in the north use their near-monopoly position in our small communities to charge unreasonable markups on the food that they sell.
It is not clear to my constituents exactly how the price of a bag of apples, a kilogram of meat, or a litre of milk is determined before it goes on sale on the shelves of stores in Grise Fiord, Resolute Bay, or Arctic Bay, and I have no idea if the markup that is charged on basic food commodities is reasonable or unreasonable.
Mr. Chairman, in its recent report on the Nutrition North Canada Program, the House of Commons Standing Committee on Aboriginal Affairs and Northern Development noted that “the formulas used by retailers to set retail prices under Nutrition North Canada (NNC) should not vary much from formulas they used under the Food Mail program. To determine the selling price of a food item, retailers usually add a margin to the landed cost of a given product, which is made up of wholesale cost of the product itself, transportation (e.g. ground, air marine), insurance, taxes and levies, etc.
The difference between Food Mail and NNC will be related to how transportation costs are calculated:  Under the NNC program, transportation costs will likely include the total of:
freight cost to bring product to the most efficient and cost-effective air staging point;  plus air shipping rate negotiated between retailer/wholesaler and air carrier;
plus ground transportation at destination;
minus program subsidy.”
I would like to suggest to our witnesses that these hearings provide a unique opportunity for them to be transparent with respect to how the prices of basic nutritious foods are set in Nunavut and to explain exactly how the subsidies that are being provided to them under the Nutrition North Canada Program are being used to reduce food prices.
I would also hope that the witnesses will respect the authority of this Legislative Assembly to request such information. I would also note that information on the federal government’s Nutrition North Canada Program website indicates that the external advisory board will, and I quote, “study the subsidy rates in May 2011 and may subsequently recommend that further adjustments be made.”
At a future meeting, I look forward to the chairperson of the Nutrition North Canada External Advisory Board updating us on her board’s work on this review given the concerns that have been expressed about the different subsidy rates for our communities. I am also hopeful that we will receive an update at a future meeting on how the advisory board is working with the Government of Nunavut’s Interdepartmental Nutrition North Canada Subsidy Program Monitoring Committee that our Premier established last year.
Mr. Chairman, that concludes my general comments. I again thank all of my colleagues for their support and I look forward to a productive set of hearings.
I will now invite the seconder of the motion of the invitation to begin his 10 minutes of general comments.
Mr. Curley, the floor is yours.
Hon. Tagak Curley (interpretation): Thank you, Mr. Chairman. Firstly, I want to start by thanking my colleagues.
This Food Mail Program has been at the forefront of our discussions over the winter, especially with the proposed changes. As we started to hear the details and see the actual costs of the foodstuffs throughout Nunavut, it seemed to be occurring all at once.
The federal government wanted to create a new program based on the Food Mail Program and it was at this time that the Members of this Legislative Assembly discussed the details of the program.
As Members of the Legislative Assembly, we have the authority to invite anyone to appear before the Committee of the Whole.
I reminded and informed the members that we can invite the stakeholders first of all by inviting federal government representatives to speak to their views and perspectives on this new program.
With respect to this entire process, I would like to thank all members who voiced serious concerns about the benefits accruing to their constituents. They also wanted to know what kind of benefits the Nutrition North Canada Program would provide for the people of Nunavut. The federal government is charging ahead with the new program, although all of the details haven’t been fleshed out or finalized, and this is occurring right up to today.
I will be alternating languages during my opening remarks.
(interpretation ends) Mr. Chairman, let me also thank the witnesses for appearing before the Committee of the Whole today to deal with a very important subject. We can lessen the impact by saying that this is related to the new federal Nutrition North idea of contributing to the northerners.
Let me explain how disappointed I am and regretful that the federal representatives who were first invited to appear before this Committee of the Whole by the motion of the Legislative Assembly and also a specific invitation issued by the Speaker of the House, of the legislature, has not been accepted.
It is shameful and regrettable that they have not agreed to appear before the Committee of the Whole. It shows how respectful our federal government representatives are, specifically the directorate representatives who were asked to appear along with you.
So I thank you for taking the courage and respecting the wishes of the Assembly for appearing here today.
Mr. Chairman, I think it is important to acknowledge the people of Nunavut for they have accepted the historic notion of free enterprise in Nunavut. We never had, like our Scandinavian countries, including Greenland, any connection with the Crown-operated retail stores. They have, I believe, for a number of years in isolated places.
So in this part of the north in Canada, we are very much free enterprise oriented.
Having said that, Mr. Speaker, I think we should also note that Nunavutmiut are very concerned.
The cost of living is the number one issue amongst the citizens and the constituents that we represent.
It’s getting staggeringly important to note that the skyrocketing prices, not just the food prices but products that are important to survive, are becoming unaffordable. If I may give an example of the group of people, for instance, the hunters and people who depend on that livelihood to survive are really at the mercy of some subsidies from the government nowadays, whether to buy a major capital expenditure or some sort.
So the cost of living is staggeringly frightening.
We see the subsidy programs, whether it be… . If I may speak about the Food Mail Program, we have a group of citizens in Nunavut who were able to use that program and directly open up their Internet, email, and purchase products and time it on the basis of when the number of products they ordered would arrive to their destination.
So in some ways, it was a consumer direct benefit. At this moment, we’re not sure exactly.
We can accept the retailers’ offer.
We can accept your word that the price benefit from the feds or the transportation benefit will be passed on to the consumer. I see that you will be obligated to represent that through the receipts at the counter.
But let me say again, Mr. Chairman, the cost of living is somewhat still in the minds of the people. Our constituents are not 100 percent sure exactly how everyday purchasing choices will actually benefit them.
There were considerable examples made by the both of you, I believe, that the prices you incur will not be impacted so much because it mainly will go towards the transportation issue.
But therefore, in my view, the prices will pretty much remain the same in Nunavut.
The transportation cost has increased.
Prices for shipping will increase, no doubt, but whether or not the basic price at the wholesale price, however the margins are arrived at, that is something we will likely never understand or be given an opportunity to understand fully because I believe it’s at your discretion.
The fact that we do have free enterprise retailers in Nunavut there must be something behind it.
It is profitable, I believe, to have retail outlets in Nunavut. Otherwise, the private sector will raise their hands up and get out of it.
It is a profitable business and therefore, I think we need to work together to try and provide some actual benefits to the consumers for the basic necessities of life in Nunavut.
I’m not sure whether or not we would ever really create that because I believe that my interpretation of the federal contribution is really to try and improve profit margins for the existing transportation companies as well as the main suppliers.
Canadians down south, which I think was alluded to by Mr. Morrison, do have a choice to bargain prices. They can grow their products during the summer months and have that basic nutritious food that they can grow. They have that option.
So thereby, they are subsidized. They can also have group buying opportunity with their neighbours around them and purchase certain products from various other retailers that are supplying food for their cities or communities.
We don’t have that choice in Nunavut. We’re pretty much dependent on you guys.
I would like to see, Mr. Chairman, for instance, that we have more discount opportunities provided to our consumers.
I think that would be a real support to the business community.
I’ll leave it at that and I will have specific questions when my time comes.
Do any other members have general comments?
I would like to thank both Mr. Morrison and Mr. McMullen. As a public representative in this territory called Nunavut, my mandate is to do what I can for the consumer. Mr. Chairman, in Nunavut, we don’t have too many choices of transportation to begin with.
We don’t have any highways; no railroads. Twelve months out of the year, between our communities, we depend highly on the major air carriers that we have. I will speak very briefly and subsequently I will have questions for both of you.
Mr. Chairman, I believe that both of you agree that the old Food Mail Program model didn’t do the purpose that it was intended for. I believe that both of you also agree that this new Nutrition North Canada Program may be able to help your company to help the consumers in Nunavut.
My question in that regard is: how would you account to pass on the savings to the consumer under this new Nutrition North Canada Program?
With your indulgence, Mr. Chairman, I would like to ask Mr. McMullen first and then subsequently Mr. Morrison.
We’re not into questions yet. That will be coming later. This is just general comments.
Mr. Ningark: You are confusing me, Mr. Chairman.
Chairman: We are not into general questions yet, just general comments. If you want to make a statement about something and then general questions will come later.
Mr. Ningark: Somebody is playing with my light.
Yes, I will reserve my questions for the question period. Thank you.
Chairman: Thank you. Mr. Tapardjuk.
Mr. Tapardjuk (interpretation): Thank you, Mr. Chairman. (interpretation ends) I would also like to thank Mr. McMullen and Mr. Morrison.
If there was no competition in the smaller communities like the Co-ops and Northern, I’m sure the prices would be a heck of a lot higher than it is at the moment. I’m pretty sure that competition is one way of ensuring that our consumers are getting the prices that they need.
I think there are only… . I don’t know how many communities. For one, I know that in Pelly Bay, they’ve got the Co-op and I don’t know of other communities.
There is only one retail outlet in the smaller communities and I’m just curious about the retail prices compared to the larger centres, where there is more competition and so forth.
So I might want to explore that when the question period comes.
Another area that I also might want to get some information is the direct charge Co-op in Yellowknife, for instance. My understanding is that the direct charge Co-op passes on their savings immediately to their members, without any due respect to any potential patronage dividends to its members.
I stand to be corrected, but with the direct charge Co-op in Yellowknife, the consumers or the members are getting a lot better prices from their retail stores. I may want to ask Mr. Morrison when I get an opportunity to ask a question about the differences in direct charge Co-ops as the retail Co-ops and so forth, whether it would make any difference when it comes to consumer prices, particularly in the groceries or other areas.
I just wanted to welcome the two individuals.
I think it’s going to be very important for us to get the information so that we can pass it on to our constituents in our communities because they are somewhat concerned about the prices, particularly for those who don’t have a regular income to depend on for their food. So those are the individuals that we are concerned about.
So with that, Mr. Chairman, I just wanted to make my opening comments. I might be seeking more information about the retail sector and so forth when the opportunity arises.
Chairman: Thank you. Do any other members have any general comments?
I would like to thank Mr. Morrison and Mr. McMullen for appearing before us today. It’s a very important issue for all of us here in the north and in Nunavut in particular.
I would just like to make a few comments concerning my own riding of Cambridge Bay, which is way over in the western arctic.
About 12 years ago, my community and hamlet council identified food as a very serious issue in our community.
People were going hungry. We established a food bank and at the time, it was almost unheard of to have food banks in communities because people looked after each other and by doing that, we were able to help many individuals and families in the community.
I am very happy and proud to say that the food bank is alive and well in Cambridge Bay and operating very strongly with the support of the entire community, but without that food bank, we would have probably 50 families or more struggling to put healthy food on their tables.
There are many reasons why people can’t afford food. It’s not entirely their fault that the food is expensive and people don’t have jobs or people have other personal situations that put them into those conditions.
Our government, with the support of all of the members, has made poverty reduction a priority for Nunavut. I am very happy that my colleague from Kugluktuk, Minister Taptuna, and the Department of Economic Development and Transportation have taken a lead on it and we’re holding a series of regional Poverty Reduction Strategy workshops across Nunavut, leading up to a poverty reduction summit meeting here in Iqaluit in November.
I was in Cambridge Bay a couple of weeks ago and I chaired our Kitikmeot regional Poverty Reduction Strategy and we had 30 to 35 people every day and into the evening come out to talk about poverty reduction.
Food again was a high priority. People were very concerned that there are too many people in Nunavut going hungry and that we have to do something about it.