Actions taken in response to the OAG’s recommendations

Updated as of March 2017

OAG Recommendations Actions Already Completed or Underway

Identifying Community Eligibility

Indigenous and Northern Affairs Canada (INAC) should review its community eligibility criteria for the Nutrition North Canada program to base the criteria on need, and it should assess the eligibility of communities accordingly.

AANDC's internal audit and internal evaluation in 2013 recommended that community eligibility requirements be examined.

As of October 1, 2016, to be eligible for Nutrition North Canada (NNC), a community must: lack year-round surface transportation (no permanent road, rail or marine access), excluding isolation caused by freeze-up and break-up that normally lasts less than four weeks at a time; meet the territorial or provincial definition of a northern community; have an airport, post office, or grocery store; and have a year-round population according to the national census.

Eligibility is based solely on isolation factors. All eligible communities receive a full subsidy. Partial subsidy status was eliminated. All communities eligible for food subsidies are also eligible for subsidized country or traditional food.

 

Contribution Agreements

INAC should review the obligations and requirements in contribution agreements under the Nutrition North Canada program to clarify that retailers must provide all the information on eligible items, including current profit margins and profit margins over time – to determine whether the retailers are passing on the full subsidy to consumers.

As of April 1, 2015, for greater clarity, a new clause will be added to funding agreements with retailers (recipients). Currently, these retailers are required to provide all financial information and supporting documents for a seven year period to justify their claim, as well as to submit to audits.

Current clause:

  • The Recipient must keep financial records, including accounts, and non-financial records for each initiative in a way that substantiates the financial report required under this Agreement.
  • The Recipient must store these financial and non-financial records, including all original supporting documentation, for 7 years.
  • These records must also allow for audit.

The new clause will specify that recipients must provide all the information on eligible items, including current profit margins and profit margins over time.

 

Compliance Reviews

INAC should:

  1. Clarify the requirements for conducting compliance reviews by specifying that the work to determine whether the full subsidy is being fully passed on to consumers must include an examination of current profit margins and profit margins over time;
  2. Assess the compliance reviews to determine that appropriate review work was completed and that the conclusions in the reports are clear and well supported and
  3. In cases where compliance reviews make recommendations to retailers, formally monitor the implementation of the recommendations.
  • A. Following the 2013 internal audit recommendations, INAC reviewed and updated the statement of work used to engage accredited audit firms to assess compliance.
  • B. For retailer compliance reviews undertaken in 2014-2015 and beyond, there is a clear requirement for audit firms contracted by the department to ensure that they review all relevant information including profit margins and confirm whether or not the subsidy is being passed on to consumers.
  • C. The department remains committed to ensuring that it receives clear and well supported compliance reviews and will act on any non-compliance identified in these reviews in a timely manner, and in keeping with the terms set out in the funding agreements and the Default Management and Prevention Policy. Once finalized, compliance reports are posted to the NNC website as a measure of transparency and accountability. Compliance review reports from 2011/12 to 2014/15 have been posted on the NNC website. Compliance review reports include, where applicable, action plans and letters to retailers.
 

Managing the Program

INAC should review and update its performance measurement strategy. The strategy should ensure that performance indicators allow the department to manage the Nutrition North Canada program to meet its objectives, collect data to report against the indicators and clearly specify responsibilities for data analysis and reporting.

A Performance Measurement Strategy for NNC was developed and approved as part of obtaining the NNC program authorities in 2010.

Following the 2013 internal evaluation of NNC, the department reviewed and updated the NNC Performance Measurement Strategy and related indicators. This updated Performance Measurement Strategy has been in place since September 2014 and has been posted to the website. It was again updated in January 2016 and August 2016 to reflect the addition of the Public Health Agency of Canada (PHAC) as a new partner.

 

Cost Containment Strategy

INAC should consider all options in implementing its cost containment strategy.

The Minister of Indigenous and Northern Affairs has considered all options related to cost containment.

The department will continue to apply cost containment in a manner that supports the program objective. In the evaluation of cost containment, the department will examine all options, including annual changes to the subsidy rates, with a view to avoiding unintended price shocks or product shortages. Freight rates are a factor in the retail costs and this information will be considered in any adjustment to subsidy rates.

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