Actions taken in response to the OAG’s recommendations

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.

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.

• 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.

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.

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.