Reflections on the What we heard report by the Nutrition North Canada Advisory Board

Table of contents

Introduction

The advisory board is part of the governance structure of Nutrition North Canada. Our role is to provide Northerners a direct voice in the program. We are mandated to give advice on how to make the program work better, within its budget, and within its mandate. We are a volunteer board, which meets in person up to three times a year. We try to meet twice a year in a northern isolated community so that we can meet directly with the community, and meet once a year in Ottawa, to talk directly with the Minister of Indigenous and Northern Affairs. We also meet regularly by telephone to discuss matters and concerns raised with us in person, by email, or other means by Northerners. We are Northerners ourselves, and most of us live in northern isolated communities, or spend the majority of our time in these communities.

We believe that seeking the views from those who benefit from the program is very important to ensure that it is working for them. This is in part our role as the advisory board to the Minister. We are very aware that as soon as people are engaged on their views and ideas, expectations are raised on what may or may not happen. Many ideas have been put forward during this engagement process through a variety of means, and ideas need to be carefully considered to make sure the program works for Northerners and their families.

Over 20 meetings in communities were held across the country, in addition to interviews, surveys, and written submissions as part of the engagement process to seek views on how to improve the program while respecting its budget. The What we heard report states that 3,500 comments were collected from participants along the themes of:

The report notes that there were a range of divergent views, sometimes within the same community on the same matter, and that some comments heard may reflect a lack of awareness of the program and other programs. Many thoughtful ideas were presented over the course of the past year through this exercise; however, some fell outside of our mandate, such as increasing the program budget in order to increase the scope of the program.

The What we heard report aligns with what we have heard directly from Northerners, in that:

As part of the continuing dialogue on this program, we thought it would be important to reflect as a board on what was heard in this engagement process, focusing on the underlying program principles.

The purpose of the public engagement process

Key points:

The program will be updated to:

  • respond to what Northerners want subsidized
  • be sustainable/work within its budget

Any adjustments will be communicated well in advance to avoid unintended price shocks.

Nutrition North Canada was audited in June 2013, evaluated in September 2013, and examined by the auditor general in 2014. INAC responded to each recommendation to improve the program. The auditor general raised a concern that INAC had spent $6.2 million more than its fixed budget at the time of the review and recommended INAC consider all options in implementing its cost containment strategy. INAC committed to apply cost containment in a manner that supports the program objectives with a view to avoiding unintended price shocks or product shortages.

INAC announced that the Government of Canada and the Nutrition North Canada Advisory Board would be engaging Northerners, retailers and suppliers on ideas to keep the program on a sustainable path. The intent was to engage key stakeholders to:

Any program adjustments, including annual changes to the subsidy rates, will be communicated well in advance, to take into account the sealift and winter road planning cycle with a view to avoiding unintended price shocks (such as poultry, processed cheese products) or product shortages.

The environment: Food security and Nutrition North Canada

Key point:

  • Being the focal point for northern food security has led to many expectations beyond what the program can achieve, or what it was designed to achieve.

The high cost of living in the North is a fact, and will continue to be a fact until there is better infrastructure, improved educational outcomes, strengthened local economies, and increased incomes. All of these factors support food security. Food security is a very complex issue shaped by diverse factors, such as:

One program cannot address all of these factors.

Nutrition North Canada is a newer program, evolving and expanding within its mandate since it started in 2011 based on feedback from the advisory board, Northerners, evaluators and auditors. It has been the subject of public scrutiny and discussion since it was announced. It has become the lightning rod for food security in the North, despite its purpose to lower the selling price of perishable, nutritious food and provide nutrition education initiatives. Being the focal point for northern food security has led to many expectations beyond what the program can achieve, and many misunderstandings about the program itself.

The What we heard report captures suggestions on a broad range of ideas to address northern food security. Given the breadth of these ideas, it will take more than one policy or program to address the underlying issues that affect the high cost of living and food security. All jurisdictions, the federal, provincial and territorial governments have a role to play, just as other regional organizations and the private sector do as well. All have implemented a variety of policies, programs and initiatives to address different aspects of food security. As discussions on northern food security continue at the local, provincial/territorial and federal levels, it will be important to examine:

Important as this is, and we are glad the ideas were captured in the What We Heard report, addressing northern food security is outside of the mandate to update Nutrition North Canada, and outside of the mandate of the Advisory Board to the Minister.

Program purpose

Key points:

  • Purpose: to help alleviate (lower) the high cost of perishable, nutritious food in isolated northern communities.
  • Northerners want even lower food prices.

Nutrition North Canada is designed primarily as an adjustment (a set amount subsidy rate) for each community to help lower selling prices of perishable, nutritious food as there is an inherent disadvantage faced by isolated northern communities which have no other option but to fly in perishable foods.

A common theme raised in almost all northern communities is that while there is a general appreciation for Nutrition North Canada, the prices are still too high. Northerners would like to see even lower prices on food items. This desired impact of the subsidy is consistent with the program purpose.

Program objective

Key point:

  • Objective: To help make perishable, nutritious food more affordable and more accessible than it otherwise would be to residents of eligible isolated northern communities without year-round surface (road, rail or marine) access.

Lower costs as a result of the subsidy make eligible food items more affordable than they would be without the program. Lower costs, along with nutrition education initiatives intended to increase knowledge of healthy eating and develop skills in selecting and preparing healthy store-bought and traditional or country food, help make eligible food more accessible than they would be without the program.

Underlying program principles

All policies and programs have underlying principles to support the program purpose. The community engagement confirmed some of the program's underlying principles; and raised divergent views on some of the others such as: "perishability", "food / non-food", as well as on the principle that the items must be "shipped by air". Further, some new principles were raised for consideration within the program, such as "food quality".

Principles:

Intended program beneficiaries

Key points:

  • Northern residents and families are the intended program beneficiaries.
  • Ensuring fairness in access is important – little to no support for approaches to create divisions within communities.

Most community members support the program benefits going to all community members, There are strong views that communities do not want access to lower prices to be a social assistance program, with "haves and have nots".

This feedback supports fairness in accessing program benefits is a sound program principle. It is consistent with comments received when the application of the program was originally developed.

Intended program beneficiaries and commercial organizations

Key points:

  • Businesses that cater to non-community members should not be eligible.
  • Further discussions on how to ensure eligible restaurants include healthier meal choices, and pass on the subsidy.

Most commercial organizations (such as mining camps, lumber companies) are not eligible to receive the subsidy; however, restaurants, hotels and outfitters are. Community feedback supported restaurants receiving the subsidy, with some caveats (such as locally owned, serve healthy foods, and ensure subsidy is passed on to consumers), as they are community meeting places, and contribute to the local economy. In cases where the hotel has a restaurant open to the public, there is support for the hotel restaurant to be eligible. The majority felt that businesses that cater to non-community members, such as hotels and outfitters should be excluded because the program benefits are not going to the intended program beneficiaries. As discussions continue, it will be interesting to explore how eligible restaurants can update their menus to include healthier choices, and how to ensure the subsidy is passed onto the consumer.

Intended program beneficiaries and personal/direct orders

Key points:

  • Personal orders support improved access to perishable, nutritious food.
  • More southern suppliers should be registered with the program.

Personal/direct orders support community members choice in accessing the benefits of the subsidy and improving access to healthy food. It is clear that there is a strong desire for this part of the program to continue, and to increase the number of registered suppliers.

Many suggestions have been raised on how to update this part, so that it would work better for Northerners in the areas of delivery standards and packaging (see section on new principles raised). A few individuals want a process developed so they could access the subsidy directly either for the food they buy when they go out of town or from unregistered suppliers. There has been some innovation around the concept of allowing community members to order online without a credit card by some of the registered suppliers in partnership with income support offices. Retailers and some communities with locally owned stores have raised concerns in two areas:

  • an increase in personal orders would reduce the availability of food items in stores since retailers only stock what is selling
  • money would not stay in the community supporting local businesses and job opportunities

As conversations continue, it will be important that there be discussion the airlines and registered suppliers with respect to delivery standards and packaging.

Small retailers and local businesses

Key point:

  • Lower administrative burden for small retailers and local business to encourage more to join the program.

Community members have raised that there are barriers to smaller retailers, band run stores, and locally owned businesses accessing the program. This is in part due to the program requirements to collect data and report on results based on the underlying principles that the subsidy is fully passed on to consumers; and the program is transparent. As a result, all retailers are required to meet a certain standard in record keeping and filing claims for reimbursement of the subsidy, and to submit monthly reports so food price trends can be tracked, and shipping information posted. Despite these requirements, many Northerners have an underlying distrust of larger retailers and whether they are passing on the subsidy to consumers. Yet, they also suggest the lessening of these requirements for smaller retailers, band run stores, and locally owned businesses to attract them into the program. A few suggest the program provide loans or subsidize building materials as well. We feel it important to note that there are existing economic development programs that provide loans for small businesses, and do not believe the subsidy for food should be used to duplicate existing programs.

Principles:

  • The program criteria are fair and accessible.
  • The subsidy is fully passed onto consumers.
  • Market forces create efficiencies in the supply chain.

Retail subsidy

Key points:

  • A retail subsidy reduces the selling price by the same amount.
  • Diverging views on the underlying principle of what is fair to support subsidy rate adjustments within the program budget – some community rates will increase, others will decrease.
  • Diverging views on purpose of subsidy rate adjustments – community-specific rates based on isolation vs regional comparability of selling prices vs southern centre comparability of selling prices.
  • More discussion is required on what principles should underpin subsidy rate adjustments.

The retail subsidy reduces the selling price of an eligible item by the same amount as the subsidy so that the full subsidy amount is passed onto the consumer. There is a lack of awareness on the difference between a retail subsidy and a "freight" subsidy, causing concern when there is a better air cargo rate than the amount of the subsidy. There are many cost factors that go into a selling price, such as the:

  • wholesale cost of the item itself
  • shipping costs to the wholesaler
  • packaging and handling costs
  • shipping costs to the isolated community
  • transportation costs from the airport to the store
  • storage costs
  • costs to run a store (utilities, staff, rent, repairs, theft, spoilage, taxes)

Retailers may apply the full amount of the subsidy to these costs which helps lower the selling price. If the subsidy is only applied to the air freight costs, prices would increase in some communities. To help show how the subsidy works on items Northerners buy, major retailers now are required to show how the subsidy is applied (which items, and by how much) on the customers' sale receipts.

The subsidyis not dependent on transportation or other costs, such as fuel or freight, or inflation. In general, the farther north and the more isolated a community is, the higher the cost of living, so the subsidy rate is generally higher as one goes farther north. Each northern isolated community has its own subsidy rate. To ensure fairness in access to program subsidies, there are objective criteria to set the rates within the program budget. Four criteria thought to be the most important in affecting price are used to set the rates within the existing program budget:

  • the geographical distance from the supply centre to the isolated community
  • the distance flown
  • the population (according to the census)
  • the minimum wage

There is a need to adjust subsidy rates to stay within budget, to target communities where the prices are highest, and to ensure the market does not adjust to the subsidy. There are many views on what is meant by fairness, ranging from tailored rates based on isolation, same rates for each community, balanced food prices across regions or similar prices to southern centres. In all cases, the desired effect of the subsidy is to lower prices within each community. To achieve southern market comparability, the program would require a much more substantial budget or would need to significantly narrow the eligible food list. To achieve regional comparability, it would require subsidy adjustments with the program budget, with some community rates increasing (lower prices), and some decreasing (higher prices).

Consideration on how to adjust rates in areas where there are complementary programs which further reduce food prices would be required, but in a way as to avoid impacting the intended outcomes of willing partners. It will be important to clarify the underlying principles to determine the best method, or combination of methods, to support subsidy rate adjustments along with potential impacts to northern isolated communities.

Principles:

  • The program supports improved access to healthy food.
  • Subsidized foods are perishable, nutritious and relevant to Northerners.
  • The subsidy is applied to eligible food shipped by air.

Nutritious items – food eligibility list

Key points:

  • Food subsidized should be nutritious and not high in salt or sugar.
  • More discussion required on the subsidy levels, their use and the eligibility list.

The food eligibility list had the most discussion, next to retailer accountability. Most community members are of the strong view that supporting access to healthy food should continue to be another principle of the program, and that subsidized food must be nutritious and not high in salt and sugar. Some want only organic or whole foods subsidized (no pre-packaged or boxed foods), with whole grain products receiving a higher subsidy. Every individual has a view on what should, or should not be eligible. Comments range from what should be added, what should be moved from one subsidy level to another, whether there should be a higher subsidy level for the most nutritious and perishable foods, whether there should be a Level 2 subsidy, and what should be removed from the list.

Perishable, nutritious food must be flown in

Key point:

  • There were diverging views on whether eligible items should be subsidized regardless of the method of shipping.

One of the underlying principles of the program is to provide a subsidy to help lower costs where there is no choice but to fly in perishable items. Food is considered perishable if it is fresh, frozen, or has a shelf life of less than one year. Where there is another, cheaper way to bring in the food items, such as by truck, train or sealift, these items are not subsidized. Views diverged on this underlying principle, and whether all eligible foods should be subsidized, regardless of the means of transportation.

Relevant to Northerners: Eligibility list a tool to support community priorities?

Key points:

  • A tailored eligibility list will help support community priorities.
  • Diverging views on a broad list (choice) or a tailored list (to either support families, the most vulnerable, or traditional lifestyles), and the desired impact of the subsidy.

Fairness in access to the benefits by all community members is strongly supported by Northerners. While some community members are of the view that any narrowing or tailoring of the list is in effect dictating what they can eat, most community members seem to be of the view that the eligibility list could be a tool to support the community priorities, with a focus on:

  • families, babies and elders
  • traditional lifestyles

Country/traditional food is a very important food source for Northerners. Every community visited throughout the engagement process has noted its importance. The program supports country food that is sold in stores or from a registered processing plant with a country food subsidy rate and with nutrition education initiatives.

Community members note the program could better support families within its existing budget by:

  • focusing on food staples (such as flour, baking soda, butter, lard, pasta, rice) so families can cook from scratch
  • making its fixed income go farther than if buying pre-packaged items
  • have supplies to go out on the land
  • focusing on babies and elders (such as infant formula, diapers and nutrient replacement drinks)

Supporting healthy food or healthy living?

Key points:

  • Continue to support improved access to healthy food.
  • There were diverging views on whether the scope should be broader to support healthy living (subsidize both food and non-food items).

Nutrition North Canada supports improved access to healthy food, and most feedback supports this principle. Where views diverged is whether this principle should be broader in scope and support healthy living (food versus non-food items). In this vein, a number of communities suggested opening up the eligibility list to cover all food items, household items, and hunting support items. To remain within budget, adding items to the eligibility list without other adjustments will result in smaller subsidy rates for each community. Further discussion is required, keeping in mind the desired impact of the subsidy.

Principle:

  • The program is sustainable (operates within its budget).

More choice or lower prices?

Key points:

  • The program must operate within its budget (it grows by 5% a year to allow for increased demand for subsidized food and population growth).
  • Diverging views on more choice versus lower prices.
  • More discussion required on underlying principles of food eligibility list (facilitate choice, perishability, staples) and desired impact of subsidy.

One underlying program principle is sustainability. The program must operate within its budget like all programs. Most communities recognize the importance of remaining within budget which led to discussions around how to update the program to work for Northerners while remaining within budget. Suggestions included:

  • narrowing the eligibility list to focus on staples a family needs in order to allow for more meaningful subsidies for each community
  • having community or regional eligibility lists with community subsidy allocations
  • having a broader eligibility list to allow for more choice with narrower community subsidy rates

At odds is how to balance the desire to add more items to the eligibility list to support improved access and the desire for even lower prices while remaining within budget.

Further discussion of the underlying principles for the food eligibility list (such asperishability, food vs non-food, family staples, and so on) and desired subsidy impact (narrow subsidy with more choice, deeper subsidy with more limited items) is required. Each option will need to be costed so that the chosen direction keeps this important program on a sustainable path.

New principles raised:

  • Food quality.
  • Service standards.

Food quality and spoilage

Key points:

  • Retailers and suppliers sell quality food items / reduce waste and spoilage.
  • Southern suppliers have service delivery standards.

Food quality and food spoilage affects what people buy. Lower quality foods do not last as long on the store shelf, or in the home. Spoilage can happen anywhere along the supply chain. Many communities do not have adequate storage and refrigeration facilities. Feedback indicated that spoilage can be a result of:

  • not being properly packaged for the harsh northern climate
  • weather delays
  • not being shipped by airlines in a timely manner
  • not having the proper climate controlled storage facilities
  • not selling (either because it is too expensive, of poor quality, or because it is an unpopular item, such as tofu)
  • not being put on sale before it spoils

Suggestions consistent with these suggested principles include:

  • monitor spoilage and find methods to control and eliminate spoilage and waste
  • establish regulations or requirements for food suppliers to control waste and spoilage, such as to require food shipped to the North to include refined packaging techniques and shipment times to avoid freezing, damage, and spoilage
  • monitoring shipment times
  • have penalties for excessive waste and non-compliance with regulations

These suggestions should be considered in the context of the supply chain, roles and responsibilities, the impact of penalties on food prices as well as Northerners' desire for lower prices.

New program models raised

Reimbursement based on what is sold

Key points:

  • Diverging views on the objective of improved access (increased choice through subsidizing items shipped) and suggested new principle of improved quality (subsidizing what Northerners are buying).
  • Roles and responsibilities on how to: improve food quality and lessen spoilage and waste needs to be discussed will all parties (all jurisdictions, land claim organizations, retailers and suppliers, shipping companies, airlines).

Suggestions also included Nutrition North Canada be redesigned to reimburse based on eligible items sold, instead of eligible items shipped to better reflect what Northern families are buying. Further, such a program redesign could support local food production (such as greenhouses, community gardens) in turn, helping to lower the selling prices of food through reduced transportation costs and improve fresh food quality with added benefits of increases in the local economy, pride and cohesiveness. There are already initiatives underway such as those supported by Makivik Corporation and the Nunatsiavut government. The implications of expanding the program in this area would need to be carefully studied (e.g., impact on food choice in communities and in stores, and on the program budget).

Locally and traditionally harvested food

Key points:

  • Accommodating non-food supports for country food within Nutrition North will result in higher food prices.
  • Increased monitoring and conservation is needed to support increased use of traditionally harvested food.
  • All jurisdictions, land claim organizations and the private sector should work together to find ways to increase the supports for Northerners to access traditionally harvested foods.

The majority of community members do not want to expand the program to the point the subsidy would need to be lowered to accommodate the addition of non-food supports to access traditional food (such as ammunition, gas) as it would result in higher food prices. The vast majority of participants, however, indicate a need for increased support, including the need to allow for interjurisdictional trade of country/traditional food (such as between Canada and Alaska) through a separately managed program.

They note the importance of the food sharing network within northern communities for locally harvested foods, and that using a retail-based subsidy model is counter to traditional practices. They generally do not buy these foods in the store. They note that with increased consumption of wild food, there would be the need to increase monitoring and oversight to manage the harvest, which would in turn require additional funding. Increased support could include:

  • a subsidy or tax exemption for hunting and fishing equipment, gas, ammunition, snowmobiles and parts, nets, traps, camping equipment
  • funds for community hunts and hunter support programs, community freezers, or hunters and trappers organizations to pay hunters; an air freight subsidy for community trade
  • license hunters to supply local stores and subsidize those foods purchased
  • changing quotas to allow for more hunting; and, provide support for domesticated herds

Providing supports for traditionally harvested foods a complex issue, with multiple jurisdictions, land claims and treaties, traditional practices, and varying levels of program supports within each jurisdiction. In our view, it will be important for all parties to work together to examine what exists, where the gaps and needs are, and to find ways to increase supports for Northerners to access country/traditional food while respecting the sustainability of the resources. While a very important matter, creation of a new program is outside of the mandate to update the program and of the Advisory Board to the Minister.

Other suggestions to lower food costs

Key point:

  • There were many different views on how the program could be updated to help lower the cost of food. These should be evaluated in the context of program purpose, objectives, underlying principles and budget as well as geography and roles and responsibilities.

Participants put forward many suggestions for consideration on how to help lower food costs, some within the mandate of the program, and some that go well beyond the mandate.

Suggestions included:

Others suggest regulated, state-run stores or community co-operatives be established, or that mandatory pricing for subsidized products be implemented. Finally, there are suggestions to cap retailer profits, cap food prices, and seasonal subsidies to help lower food costs. As discussions on the update of the program continue, it will be important for all parties that support northern isolated communities (land claim organizations, other levels of government, retailers, shipping companies and airlines) to work together to discuss all aspects of the supply chain, how it can be improved to help lower food costs and improve the quality of perishable, nutritious foods, roles and responsibilities, as well as to evaluate ideas in the context of the program purpose, budget, objectives and underlying principles.

Moving forward

Key point:

  • Moving forward, all feedback will need to be assessed to develop options to update the program to work better for northern residents and families while remaining on a sustainable path.

INAC, Health Canada, and the Public Health Agency of Canada will have to assess all of the feedback from the public engagement process to develop options to update the program so that it works better for Northerners. They will not be able to offer a program that will address every element of the feedback received, and nor should they when there are such diverging views being put forward. When weighing these matters, it is important to remember the purpose of the program is to address the inherent disadvantage faced by northern communities which are isolated. They have no other choice but to fly in their perishable food items which increases the costs substantially. Overwhelmingly, participants are seeking to have Nutrition North Canada result in even lower food prices on subsidized items; however, there are diverging views on how this could be achieved. Each underlying principle and its merits should be considered in the context of how to make the program work best for Northern residents and families, within the context of the program budget and purpose.

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