Indigenous and Northern Affairs Committee on Nov. 3rd, 2010

[Yvon Lévesque, Bloc, Abitibi—Baie-James—Nunavik—Eeyou, QC]

I think I've heard Mr. Morrison say that he has no choice, that he cannot order from any supplier he chooses. I understand that it does not fall under your purview as your contract is for carrying food from point A to point B. Is that correct? Can you receive an order from Mr. Morrison, in Ottawa for instance, and carry it to Iqaluit?

[Scott Bateman]

The current food mail program has specific staging points, entry points. Food mail we can only receive. It has to be inspected by the Canada Post inspection agent at the staging point.

For other products, other than food mail, cargo and otherwise, we'll accept our customers' cargo anywhere in the country, but food mail has to be through those specific staging points under the current program.

[Yvon Lévesque, Bloc, Abitibi—Baie-James—Nunavik—Eeyou, QC]

If I understand correctly, there is a lot of transparency in your services to Northerners under your contracts. The transparency, in regards to services to people is taken very seriously.

[Scott Bateman]

Just to make it clear, our customer, with regard to the food mail program, is the current administrator. It's Canada Post. They carry out the inspection at inception and basically we tender it at destination to a Canada Post representative or a representative of the ultimate customer. We tend, contractually, not to have an interaction with the actual shipper. However, in reality, because of the areas in which we operate, those food mail customers are obviously our cargo customers and our passenger customers as well, but typically the food mail customer is a Canada Post customer and I'm a supplier to Canada Post in the transportation chain.

[The Chair, Conservative, Bruce Stanton]

Thank you, Mr. Lévesque.

Ms. Crowder, it is your turn to have the floor for seven minutes.

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

Thanks, Mr. Chair.

I want to thank the witnesses for coming today.

I'm sure you were all paying attention to people's testimony on Monday. Some of the concerns you've raised today are ones that were also raised by those witnesses in terms of implementation and consultation. There were other issues around...with respect, not always being clear that the subsidy prices would actually be fully passed on to consumers, and there were some questions around what kind of controls would be put in place in order that consumers would get the full benefit of the subsidies.

I want to start with a question for Mr. Harper and Mr. Pearson.

I was looking at the discussions with stakeholders on the Dargo report, and I'm not sure your two organizations were formally interviewed. I don't see your organizations on this list. For your two organizations, because you're an important factor in many communities, how was your input sought in these changes that are proposed?

Mr. Pearson.

[Eric Pearson]

There was a group of consultants who came from out west. I remember talking to Graeme Dargo, but there was a group of consultants who came from out west. They came to Kuujjuaq and they sat down with me for two or three hours for input about the system and what I thought the changes should do, but that's really all the input I've had directly, other than discussions we've had with INAC representatives for the last several years.

I'm like Kenn; I've proposed for years and years that the food entry points should be changed to Montreal and Ottawa. We've made a whole bunch of other recommendations. We made a recommendation that the program of perishable products should be reduced substantially, not just 80¢ a kilo. It should be something ridiculous for a very tight bunch of products.

We do have dialogue with the people in Ottawa, but specifically Dargo, no.

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

It just seems that there is a significant, wholesale change to the program.

I just want to give Mr. Harper an opportunity here.

[Kenn Harper]

Arctic Ventures wasn't consulted in the preparation of the Dargo report. We became aware of the Dargo report when the Dargo report was issued, and then we set about to oppose the unrealistic suggestions that were in it, like the point-of-sale accounting for the subsidy as a way of the community members knowing it, things like that.

We did endorse wholeheartedly the shrinking of the eligible items. I support fully what Mr. Pearson says, that if the list were shrunk even further and made much cheaper it would be to the benefit of the communities. Lots of things come off those items. I heard yesterday that the media has been reporting that people in the north are upset because there is no subsidy any more on bacon and cream. I can understand why there's no subsidy on bacon and cream. I think there should be a bigger subsidy on bananas and orange juice, and milk and apples, for example.

We had our input after the fact in trying to lobby the INAC officials as to what would make a sensible program. One of the big things, if I may just take a second, is INAC wants visibility of the subsidy. Everybody wants somebody to say thank you.

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

That's not a good reason to change a program, sorry.

[Kenn Harper]

We opposed the Dargo recommendation of point of sale because if the subsidy is printed on the point of sale, it ends up on the floor in my store or in the garbage pail on the way out. Quite sensibly, INAC has opted for a signage program that they will work with all retailers in implementing, which will say...well, I don't know what it will say, but maybe it'll say, “Without a subsidy, this two-litre carton of milk would have cost you x. With the subsidy, it will cost you y. Thank you INAC.”

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

Am I still good?

[The Chair, Conservative, Bruce Stanton]

Two and a half minutes.

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

Okay.

I just want to touch on the issue around planning, and I want Mr. Bateman, Mr. Pearson, and Mr. Harper to respond very quickly.

Anybody who has any familiarity with the north understands that planning has a different context in the north than it has in the south. We reference sealift and the ice roads, and there are any number of factors, including storage. I'm just wondering how you are able to plan for changes that are going to come April 1 when you have virtually no details of what the program is going to look like.

Mr. Bateman, do you want to start? It's going to impact your business as well.

[Scott Bateman]

The simple answer is you can't plan. You work out three or four different scenarios and you wait anxiously for the correct answer to come out. A huge volume under this program is being shipped through the staging points right now. A lot of infrastructure has been put in place. You've got multi-zone coolers and warehouses and ground-handling equipment and a lot of things like this.

As you change staging points and move that volume, whether it's Montreal, Ottawa, Winnipeg, or Edmonton, in order to respond to our customers' needs we have to add on to our infrastructure. In the south it's a lot easier to add on. Construction timelines are not as lengthy as they are in the north. The infrastructure requirements in the north are such that you almost have to plan a year ahead.

So can we plan effectively? No. But like any good business that's managed to perpetuate itself, we'll scramble and bust our gut and get a proposition to the customer that's attractive.

But no, it's very difficult to plan. I mean, this is a huge change that's going to disrupt the network across the country. From our perspective it requires sufficient lead time.

[The Chair, Conservative, Bruce Stanton]

There's only maybe 20 seconds left. You can make a very short comment, Mr. Harper or Mr. Pearson.

[Eric Pearson]

Very quickly I'll say April 1 doesn't bother me, because most of the product is perishable that's coming in anyway. What really bothered me was October 3, because as you mentioned, we had three or four months, and you can't move in the north in three of four months.

Sorry, Kenn, go on.

[The Chair, Conservative, Bruce Stanton]

Okay.

[Kenn Harper]

April 1 doesn't bother me either, but my issues are quite different from Scott's. He's got to deliver it, I've got to receive it. I can receive it and sell it. I don't yet know what the subsidy is. There are lots of things I don't know about it, but I'll be able to do it.

[Scott Bateman]

I just spent $20 million on two airplanes to add capacity and reduce costs. Will I need those aircraft next week?

[The Chair, Conservative, Bruce Stanton]

Sorry, Mr. Bateman, we're out of time. Thank you very much.

Thank you, Ms. Crowder.

We're going to go to Mr. Payne for seven minutes.

[LaVar Payne, Conservative, Medicine Hat, AB]

Thank you, Mr. Chairman.

First of all, if I have any excess time I'd like to share it with Ms. Glover.

The other day I had some questions concerning competition on airlines. In that vein, I'm wondering if it's possible to move a motion that we add another airline or airlines, one of those being Canadian North, as a witness to this very important issue on Nutrition North Canada. I think that's very appropriate.

At the same time, if I might, Mr. Chairman, I'd also like to suggest that we invite as a witness the Minister of Health, Minister Aglukkaq, who is from the north, and who certainly has experience living in the north, and who certainly has a big impact from a health point of view.

As I understand it, Mr. Chairman, department officials will be here on November 15, and that might be an appropriate time to have the minister here as well.

If that's in order, Mr. Chairman, I'd like to suggest that.

[The Chair, Conservative, Bruce Stanton]

Is there agreement to consider the motion? It certainly doesn't need notice. It's germane to our topic.

(Motion agreed to)

We're good? Okay.

[LaVar Payne, Conservative, Medicine Hat, AB]

Thank you, Mr. Chairman.

[The Chair, Conservative, Bruce Stanton]

Thank you, Mr. Payne. Go ahead.