Evidence of meeting #24 for Indigenous and Northern Affairs in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was subsidy.
A recording is available from Parliament.
3:50 p.m.
Assistant Deputy Minister, Northern Affairs, Department of Indian Affairs and Northern Development
There are approximately 40 suppliers right now, so it is not—
3:50 p.m.
Assistant Deputy Minister, Northern Affairs, Department of Indian Affairs and Northern Development
No, across the—
3:50 p.m.
Liberal
Larry Bagnell Liberal Yukon, YT
Okay, well there are a whole bunch of stores in Whitehorse. That's only one of all sorts of cities that people buy from. Right now they can buy from anyone. You're limiting them to a few out of probably hundreds of stores that these people buy from, from all across Canada.
3:50 p.m.
Assistant Deputy Minister, Northern Affairs, Department of Indian Affairs and Northern Development
I'm trying to answer your question. There are approximately 40 suppliers who right now are active under this program for personal orders across the country.
3:50 p.m.
Liberal
Larry Bagnell Liberal Yukon, YT
But that doesn't include where they go in and buy. You wouldn't know, though, where they go into the store to buy them—
3:50 p.m.
Assistant Deputy Minister, Northern Affairs, Department of Indian Affairs and Northern Development
No.
3:50 p.m.
Liberal
3:50 p.m.
Assistant Deputy Minister, Northern Affairs, Department of Indian Affairs and Northern Development
No, that's not the way it works.
3:50 p.m.
Assistant Deputy Minister, Northern Affairs, Department of Indian Affairs and Northern Development
They have to arrange with Canada Post to have it shipped through Canada Post.
3:50 p.m.
Liberal
Larry Bagnell Liberal Yukon, YT
Yes, they take it in to Canada Post, which is right at the airline, and they have it shipped. They have no idea what store they came from, because the person went to the store.
Anyway, I have more questions.
The similar level of subsidy you talk about... In the more remote communities there will be two levels of subsidies, or different levels of subsidies depending on how remote it is. I assume that for the more remote communities you're going to be raising the bar and giving them more; you're not going to be reducing it for the closer communities.
3:50 p.m.
Assistant Deputy Minister, Northern Affairs, Department of Indian Affairs and Northern Development
No, we're going to basically take the level of subsidy that currently applies—we're calculating it community by community under the current program—and we're going to replicate that under the new program so that there won't be any gain or any losses for communities that are less remote or more remote.
3:50 p.m.
Liberal
Larry Bagnell Liberal Yukon, YT
Oh, okay. I couldn't figure that out, from the way it's written here.
Also, in the two categories of most nutritious and less nutritious, once again the most nutritious is going to get a higher subsidy level, so I assume that it's going to go up, but the total subsidy will be the same. It's not as though the other one will just go down and...
3:50 p.m.
Assistant Deputy Minister, Northern Affairs, Department of Indian Affairs and Northern Development
Based on the $60 million that's available—because we have new elements to the program, such as the nutrition education program, such as more focus on accountability, the advisory board, the country foods—we'll have to be able to estimate how much more subsidy we can provide to the most nutritious. It will all have to balance out at the end of the day. We have $60 million available for the program.
3:50 p.m.
Liberal
Larry Bagnell Liberal Yukon, YT
How will the consumers know the subsidy has been passed on to them when they go to a store in...wherever?
3:50 p.m.
Assistant Deputy Minister, Northern Affairs, Department of Indian Affairs and Northern Development
Maybe I could ask Mr. Tibbetts to say a couple of words about the whole area of accountability.
Do you want to say something?
3:50 p.m.
Jamie Tibbetts Director General, Devolution and Territorial Relations Branch, Department of Indian Affairs and Northern Development
We're still working out the details with Treasury Board on the arrangements and detail. However, under any contribution arrangement that is put into place by the Government of Canada, there is still the right of audit. There will be the requirement for information flowing from the recipient of the funds under the program, including the data on waybills and invoices on actual products shipped to each community, which we don't get right now, actually. As you said earlier, we do not know exactly what products are going up on airplanes through Canada Post. The new program will have that information, so we will be able to understand what is going on. There will also be point-of-sale information on the subsidy given at the community level, and we'll be doing in-store price surveys to complement the data that's coming in with the waybills and the reports from the retailers and wholesalers.
3:50 p.m.
Liberal
Larry Bagnell Liberal Yukon, YT
The people from remote villages come in to Yellowknife or Whitehorse or Ottawa for their medical and dental and all that kind of stuff, then they do their shopping. They go into the grocery stores and shop, then send it home. Before, they got a reduced rate off Canada Post. How will they get the reduced rate now?
3:55 p.m.
Director General, Devolution and Territorial Relations Branch, Department of Indian Affairs and Northern Development
The current food mail program is a transportation subsidy. The new program is a retail subsidy. Their practices may start shifting towards buying products in their communities and getting the subsidies at the store locally, as opposed to having to go remotely to get it.
3:55 p.m.
Liberal
3:55 p.m.
Conservative
The Chair Conservative Bruce Stanton
Sorry, Mr. Bagnell, that's all the time we have.
We now move to Mr. Lévesque, who has seven minutes.
Mr. Lévesque, go ahead.
3:55 p.m.
Bloc
Yvon Lévesque Bloc Abitibi—Baie-James—Nunavik—Eeyou, QC
Thank you.
Ms. Copland, Mr. Borbey and Mr. Tibbetts, welcome.
I would like to talk first about the current program, the Food Mail Program which is managed by Canada Post. We must admit that over the many years that Canada Post has managed this program, the corporation has acquired a certain experience and dexterity in obtaining the best prices and providing the best service possible.
Canada Post played the role of shipping inspector and had a presence in almost all Canadian communities. The corporation controlled the quality, handling, packaging and even the entry and arrival facilities. It conducted follow-ups and set maximum time limits for the loading and unloading of food, in order to ensure food freshness. Canada Post also had the advantage, when assigning contracts with shippers, of getting the best price possible.
As a crown corporation, and one which already operated within Canada, Canada Post ensured a framework and uniformity. The Nutrition North Canada model is based on retail trade, by excluding Canada Post from the process. Who will have those responsibilities under the new Nutrition North Canada program?
We know that there will be a financial control to ensure accountability. What will this accountability apply to? Will it concern the cost of food once it has reached its destination, minus the subsidy? Have you calculated the ability of each retailer to negotiate, compared to a wholesaler such as Canada Post, which asks for bids and has an ability to negotiate with shippers?
Has there also been an assessment of Canada Post's ability to transport food as close as possible by road, which made it a lot less expensive when loading onto a plane, in order to ship it to remote regions?
Is there a mechanism to guarantee all northern communities will have healthy foods, with a reasonable shelf life and at a more accessible price than at present?
3:55 p.m.
Assistant Deputy Minister, Northern Affairs, Department of Indian Affairs and Northern Development
Mr. Chair, there are many questions and I do not have much time in which to answer. I will do my best.
Mr. Lévesque, I can tell you that we did review the program from top to bottom. We spoke to all the stakeholders, we held engagement sessions across the country, we conducted studies and we have already published a provisional report. We are currently finalizing the report, which should be published in the coming weeks.
Clearly, people across the board found that the current program was a problem. People complained about the quality of the food, Canada Post was unable to ensure satisfactory quality control upon arrival. Obviously, there was often bad weather. So, sometimes there were factors that were beyond anyone's control, but, essentially, people were not satisfied with the program.
We were told 40 years ago, when this program came into existence, that there was not a network of retailers as sophisticated as at present. There are three major retail chains in northern Canada, plus hundreds of independent retailers who have sophisticated distribution systems. We have been convinced that these retailers can do this job and that, instead of filling orders separately from Canada Post, they will fill all their orders at the same time at southern wholesalers, to ensure economies of scale.
Rather than receiving fruit on Tuesdays or Wednesdays only, and the rest of the products every day during the week, there will be a consolidation that could lead to savings. We have studied and listened to such recommendations. They have convinced us that a solution based more on decisions made by market stakeholders could improve the quality and efficiency of the program, and make it more profitable than it is now.
4 p.m.
Bloc