Indigenous and Northern Affairs Committee on Nov. 22nd, 2010

[Chief Napoleon Mercredi]

There's a difference between Fort Smith and Fond du Lac and Uranium City. Fort Smith has an all-weather road. It comes in from Edmonton. Where we live, it's a fly-in community and that's it. In the winter, you might drive for three months out of a year on the ice road, but the way the global warming is coming to places, the season isn't long enough. The ice wasn't thick enough last year and that was a big impact on the community.

This year we have a problem with the barging system, because our water level on Lake Athabasca dropped five feet.

There's a big difference there.

[The Chair, Conservative, Bruce Stanton]

Thank you, Mr. Bevington and witnesses.

Now we'll go to Mr. Payne.

[LaVar Payne, Conservative, Medicine Hat, AB]

Thank you, Mr. Chairman.

First of all, I'd like to thank all the witnesses for coming today. It's an important issue that we are talking about, this Nutrition North Canada, and I thank you for your presentations today.

I'm sure you're all aware that the purpose of the Nutrition North program, as the Minister of Health has said, is to provide nutritious food to the first nations. It also ensures that they get to see the subsidy that the Nutrition North program is going to provide for them and that subsidies are no longer provided on non-nutritional items. Somebody mentioned that there will be an audit by INAC. On December 1, the subsidized items will be posted on the website for Nutrition North.

I'd also advise you that there have been names submitted for the review committee. I suspect that these will be announced shortly. I don't have the details yet. However, the people appointed to this board will be able to review what's going on with the program and provide input to make changes. It's an open process and we'll have opportunities to see how that's going to work.

Mr. Ballingall, you talked about the competition in the air industry. I think that is an important factor for providing lower-cost foods. You talked about potentially getting those products there more quickly. With Cargojet, are you looking at other opportunities besides what you mentioned in your opening statement?

[James Ballingall]

We're in discussions with some of the northern carriers about our business model. Most of the food purchased in this country is purchased in southern Ontario, around Hamilton. Our base happens to be Hamilton. We have aircraft based there during daylight hours. There are warehouse facilities and cross-dock facilities there.

Now, I know Jasmin,and I've known him for a while, but I think we all know the reason why Val-d'Or was there. Does the business model up there still work? If it does, then airlines will find a way to get there.

But what we're talking about right now is talking to the northern carriers to get the product from southern Ontario, where most of it is purchased, into Iqaluit as quick and as fresh as we can. We can move it from Winnipeg, Edmonton, Vancouver, or Montreal to Rankin or Iqaluit, but in this example that I'm giving you right now, it would come from southern Ontario, from Hamilton, where the food originates and it's in its freshest state. We can get it up there the same day, into Iqaluit, which is where about 70% of it is going. The rest is going to the 12 communities on Baffin Island. That's the most cost-efficient way to do it.

I happen to have a lot of experience up there. I've been in every community in the north. I've seen 17 people in a one-bedroom house with one bathroom. I know what's needed there. The money the government can save here, you can reinvest in other desperately needed health and nutrition facilities in the north. That's really what we're talking about.

[LaVar Payne, Conservative, Medicine Hat, AB]

Thank you.

Have you had the opportunity to have some input with INAC in consultations on this process?

[James Ballingall]

We've had a number of sessions with them.

[LaVar Payne, Conservative, Medicine Hat, AB]

Okay. From what I've seen and heard from other carriers, the competition aspect is going to help to actually reduce the cost of food.

I'm not sure who wants to answer from Valpiro Inc., but in terms of the opportunities for competition in air to provide service for nutritional goods to the north, do you see an opportunity to reduce costs as well as ensure that the nutritional food gets to the northern communities as needed and in a fresh state?

[Richard Brouillard]

Do you want to answer, Mr. Frappier?

[Jasmin Frappier]

I'll give you an example of what happens to perishable goods bought in Quebec in one day. For instance, a food wholesaler buys food in Montreal in the early morning. Then, the wholesaler from the Abitibi region drives his truck to his warehouse. Overnight, the food is prepared for each community, each distributor and each retailer and is delivered the next morning around 5 a.m. to Valpiro.

All the food must be ready for delivery by 11:30 a.m. We have 22 people working on getting everything ready. Then, we take our food, which is very fresh because it arrived from the distributor the previous day, and we load it directly on to the plane. I can assure you that the food is very fresh when it arrives in Iqaluit or Kuujjuaq.

You talked about savings. A specific change could be made to help save money. I'm talking about having a an airplane in Val-d'Or on a permanent basis. There would be nothing to pay for sending an empty aircraft from the south—from Ottawa or from Montreal—to Val-d'Or. Many other cities have adopted this approach, and we're wondering why the same is not done in Val-d'Or. I hope this answers your question.

[Richard Brouillard]

May I? I'd like to try to answer directly to your question about the competition.

[LaVar Payne, Conservative, Medicine Hat, AB]

Yes.

[Richard Brouillard]

The entry point and the competition of our industry, I think are two somewhat different items. The basic principle in transportation is that obviously you need to have the least mileage possible with the airplane, with air, and better still with the sea, when that's possible. That's item number one.

So having an entry point and mixing it up with the problem of the competition in air, I think are two different things. Because the competition can continue. As for who gets the transportation from Val-d'Or to the north, for example, it should be left to competition. It should be very open, in fact, and making sure that everybody can go there.

The point is that you have to start at one point. We think the best point to start is where you have the least costs. Air travel costs more than land.

[The Chair, Conservative, Bruce Stanton]

Merci.

Thank you very much, Mr. Payne.

Now we'll go to the second round.

Members, I think we're going to try to go through until about five o'clock. We do have some committee business to do. I'll see how we make out in terms of time.

Mr. Bélanger, you may start the second round of questions.

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

Thank you, Mr. Chair.

I am not a regular member of this committee, so I hope you'll forgive me if my questions are somewhat naive. I want to try to understand the basics involved in this issue. The program's objective is to ensure that nutritious food gets to the northern communities at a lower cost, right? I want to understand why four litres of milk cost $17 or $19 in the north, while, a few hours by plane to the south, the same amount of milk costs $3.50. Can someone explain the logic behind this to me?

[Jasmin Frappier]

I have been faced with this reality for 17 years, and I still don't understand it. I will tell you one thing. INAC is doing very good work, but the subsidy provided for the four litres of milk does not seem to actually go into lowering the price of milk. It appears to apply to all products, to everything from Coke to other products. Unfortunately, there is no monitoring of what the subsidies are applied to.

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

If my understanding is correct, some are suggesting that the subsidy should be applied to the transporter.

[Jasmin Frappier]

No, to the retailers.

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

So, the subsidy is currently applied to the retailers?

[Jasmin Frappier]

No, currently, it is applied to the transporter.

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

And it would go to the retailers under the new program?

[Jasmin Frappier]

That's right.

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

If it went to the retailers, would it be specified for which foods the subsidy was intended?

[Jasmin Frappier]

Unfortunately, I discussed this very matter with INAC officials, and I was told that they cannot monitor the retailers.

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

No, but we know that the nutritional value of a bottle of Coke is very different from that of a litre of milk.

[Jasmin Frappier]

I agree with you.