Thank you very much. Hello everyone. Bonjour.
As a key participant in the northern transportation infrastructure with a major impact on the northern economy, Canadian North values very much the invitation to be here today on the motion of Mr. Payne. We commend this government for showing the political courage to do the right thing for the health of all northerners by taking steps to amend the legacy of the food mail program and replacing it with Nutrition North Canada.
The advantages of Nutrition North are many, including a focused eligibility list, which concentrates on perishable, nutritious foods; logistical efficiency arising from the elimination of arbitrary entry points; transparency, to ensure the subsidy is passed along to northerners; and accountability for food quality throughout the delivery process. For these reasons, we strongly support this program. Nunavut is one of the largest users. Canadian North is 50% owned by the Inuit of Nunavut. The other 50% of our shareholders are the Inuvialuit of the western Arctic, many of whom are also users of the program. Our shareholders need this program to ensure they can feed themselves and their families in a healthy and affordable way. We believe Nutrition North will meet this need in a meaningful and sustainable manner.
Furthermore, we support the program, as it creates a market-neutral structure among the air carriers, removing the hand of government from the supply chain. What do I mean by market neutrality? Under the old food mail program, granting a sizeable government-funded contract, which allowed a single airline to provide discounted air freight rates for most of Canada's north for a five-year term and blocked the entry of competitive airlines, was market disruptive.
Imagine a scenario where two airlines may be flying between communities like Iqaluit and Pond Inlet. Both have an equal number of passengers on board similar aircraft types. But one carrier has the advantage of a large, dedicated, and exclusive revenue stream for the carriage of food funded by the government, thereby creating a competitive advantage unattainable by the other carrier. Such a situation cannot serve to benefit any stakeholder. Fortunately, the Nutrition North program corrects this situation by removing government from the equation and forcing each airline to earn their business based on the quality and cost of the service they offer. No longer will the government be in the business of tilting the balance of competitive power in favour of one carrier over another. My colleague at First Air had suggested the northern air transportation system is in a delicate state of balance. We agree with that. The northern economy is based on stable and efficient competition, and the new program will ensure this competition can continue.
Having said this, we believe the Nutrition North Canada program is not about airlines, nor about commercial interests. The program's focus should be on ensuring the subsidy reaches the northern consumer in a fair and accountable manner. That being said, we do believe the program must be respectful of commercial interests by not disrupting the marketplace through contracts of such significant size that they become economic weapons that can stifle healthy competition.
It is exactly upon this open market concept that our economy is founded and it is exactly this competitive process that has created the southern food prices most northerners envy. Change is always difficult for a longstanding program such as food mail. It is easy to become distracted by the unknowns and believe that the worst will happen. But I ask you to look back at the interim report prepared on behalf of INAC, which suggested that only 62% of the subsidy funding under the old program was reaching the intended recipients. Given this conclusion, what could be worse, I ask you, than knowing that for every dollar the government spends, only 62ยข ultimately goes to the consumer? We believe Nutrition North Canada will ensure that the people for whom the subsidy is destined get every dollar of benefit possible.
Thank you.