Good afternoon, Mr. Chairman, and members of the standing committee. Thank you for the opportunity to speak to you today.
My name is Andy Morrison, and I am the chief executive officer of Arctic Co-operatives Limited. Arctic Co-ops is a service federation that's owned and controlled by 31 community-based cooperatives located across the Northwest Territories and Nunavut. These 31 multi-purpose cooperatives are owned and controlled by more than 20,000 individual owner-members in the north.
The co-ops in the Arctic have participated in the food mail program for many years. We consider the program to be an essential tool for the delivery of perishable nutritious foods to the remote communities of the north.
The existing food mail program, while essential to the communities of the Arctic, is mired in regulations and rules that greatly reduce the effectiveness of the program and result in increased transportation time, reduced product quality, and higher costs for the people of the north.
Some of the major challenges of the current program include the following.
The first is deposit days. Under the current program, product shipped to the north is inspected by Canada Post officials at entry points. Inspections take place at a specific time on a specific day. Retailers must design their product supply and logistics around these deposit days, which are not based on the needs of the communities we serve and not based on the most efficient methods of procurement and delivery.
Second is entry points. Product entering the north via the existing food mail program must be shipped through entry points specified by the program. These entry points were established many years ago and, in the case of some routes, have no relationship to existing transportation routes.
Third is claims processes. Under the existing food mail program, Canada Post does not permit retailers to file claims against their contracted air carriers for poor service. As a result, consumers pay higher prices for perishable nutritious products to cover the costs of frozen, spoiled, or damaged products. Lack of a claims process does not allow retailers to hold all members of the supply chain accountable for good service.
For more than two years, Arctic Co-ops has participated with other stakeholders in the extensive INAC consultations and review of the existing food mail program. Throughout this review, we have provided an honest assessment of the existing program and have consistently offered constructive suggestions to improve the program.
We'd like to compliment INAC and the Department of Health for the work they've done in the development of the new Nutrition North Canada program. Based on the information that's been provided to date, very important improvements will be introduced in the new program. The elimination of specific deposit days and designated entry points, and the ability to file claims for service, will result in a much better consumer-based freight subsidy program.
The new Nutrition North program does not provide any financial benefits to the retailers of the north. The freight subsidies in the new program are consumer subsidies, not subsidies to retailers. If anything, the new program will increase administrative costs for retailers, as we report to government and educate consumers on this important new program.
The Nutrition North program will eliminate the inefficiencies that exist in the current food mail program. More efficient processes and operations will enable retailers to provide better quality products, better service, and better value to our stakeholders.
Mr. Chairman, much has been accomplished in the last two years. I urge this committee and INAC to do everything possible to ensure that the new and improved program is fully implemented on April 1 as scheduled. We are committed to partnering with INAC to deliver an effective program that will provide good value and quality products to consumers and contribute to healthy eating across the north.
Thank you.