Indigenous and Northern Affairs Committee on Dec. 13th, 2010

[Jamie Tibbetts]

Between 25 and 40—

[Jean-Claude D'Amours, Liberal, Madawaska—Restigouche, NB]

That means you're entering into contribution agreements with approximately 200 people.

[Patrick Borbey]

That's because most of the retailers in the north come from three major chains. So those three chains cover more than 75% of volume. After that, we add the small retailers in the north. Then a number of retailers in the south will qualify for personal orders.

[Jean-Claude D'Amours, Liberal, Madawaska—Restigouche, NB]

When you say "major retailers", let's get this straight: they're the ones that have solid operations. Do we agree on that?

[Patrick Borbey]

Well, they're the ones—

[Jean-Claude D'Amours, Liberal, Madawaska—Restigouche, NB]

As a general rule. Perhaps you don't want to agree. As a general rule, they're the ones that have solid operations. The remaining 25%, the smallest ones, are on a less solid footing. If the current trend is to balance the operation of the government's contribution agreements, and it takes two to six months for a payment to be made... I'm not talking about the first one, I'm talking about the others, subsequently. The small retailers, the remaining 25% aren't on a sufficiently solid footing to operate that way. In spite of that, the department has decided that that's the normal process for dealing with 200 businesses that will be making regular claims. That means that, as you said, one person will be designated to handle that. That person will have to check all the requests one by one.

That person will have two, three, four...? These are perishable foodstuffs. If they're not paid for the following week, there will be a problem because retailers will have no more money. If they have no more money, they can't buy any more food. If it takes two months for them to be able to pay their small retailers, and the small retailers can't pay their suppliers, what happens to the population of the north?

I understand: you're saying that will be the problem, the retailer's fault. People will complain to it. Yes, but how will you guarantee that payment isn't made just as it's being made right now, that is to say in two to six months?

[Patrick Borbey]

It's our challenge as officials to ensure that our system works, that payments are made in advance.

[Jean-Claude D'Amours, Liberal, Madawaska—Restigouche, NB]

Mr. Borbey, that's the challenge of all officials and all departments right now. It's hard to understand why, but it's not producing results. In a few months, you're going to establish a new program, and it's as though, with a wave of a magic wand, the system is going to work well.

[Patrick Borbey]

We're professionals. At our department, we distribute a lot of subsidies and contributions. We know how it's done. We're able to establish a program that will make it possible to make payments in advance so that retailers don't have any problems financing their products. Then we'll make sure that payments are made on time, in a predictable manner. We anticipate no problems in that regard. There will have to be a transition, and that's why we have the payments policy so that we can make payments in advance.

[Jean-Claude D'Amours, Liberal, Madawaska—Restigouche, NB]

I have one final question, Mr. Chairman.

You talk about monthly payment, but goods have to be paid for on a weekly basis. That means that retailers will have to wait at least four weeks before they receive a new payment. You should reflect on that.

[The Chair, Conservative, Bruce Stanton]

Thank you.

Mr. Russell, for two minutes, please. Then we're going to Monsieur Lévesque.

[Todd Russell, Liberal, Labrador, NL]

This program will only be applicable for those who go through an application process, is that right?

[A voice]

Retailers.

[Todd Russell, Liberal, Labrador, NL]

Retailers and wholesalers?

[Patrick Borbey]

All of the retailers of the north are automatically eligible. With respect to southern retailers, we will have a process to qualify them as personal order retailers.

[Todd Russell, Liberal, Labrador, NL]

So if I'm a resident of the north making a personal food order, I'd only be eligible for that subsidy if there were a southern supplier who had signed up?

[Patrick Borbey]

We'll make sure a variety of suppliers are available to that person, including taking into consideration things such as—

[Todd Russell, Liberal, Labrador, NL]

That's the way it will be. It will be an application, so the southern wholesaler or retailer will have to apply—

[Patrick Borbey]

Yes.

[Todd Russell, Liberal, Labrador, NL]

—in order for this to be successful?

[Jamie Tibbetts]

Many of these communities have a full-service grocery store of some sort, so those stores will be signed up. In the independent case you just heard about, they will be ordering from a signed-up southern wholesaler.

That wholesaler will pass the subsidy on to the independent retailer. The independent retailer will not have to supply any paperwork to me; they will not have an agreement with me, but will be getting their supplies through their regular chain and their southern supplier.

[Todd Russell, Liberal, Labrador, NL]

I'm neither convinced this is the panacea it's supposed to be or that the food mail program was the devil that it's made out to be. We'll have to see what time will bring on this new program.

[The Chair, Conservative, Bruce Stanton]

Before we go to Mr. Lévesque, I just have one question.

Is there anything stopping a small independent retailer in a remote community from sourcing, for example, a North West store in Iqaluit as their supplier and using them as a wholesaler, if you will?

[Jamie Tibbetts]

It's entirely possible. Most of them get their products from somewhere in the food chain now. Where they are in direct competition, likely not, so....

[The Chair, Conservative, Bruce Stanton]

Not everybody has to source everything from southern suppliers--I guess that's what you're getting at.