Indigenous and Northern Affairs Committee on March 10th, 2011

[The Chair, Conservative, Bruce Stanton]

We don't have very much time.

[Michael Wernick]

I'll go very quickly.

One of the issues with the former program was that it was a transport subsidy, so it was actually vulnerable to the price of aviation fuel. When we had a spike in oil prices, there was a spike in the price of aviation fuel, and the program costs went up. It didn't help deliver more food; it simply went to increase the subsidy to the transporters.

By delivering it to the retail end of the system, you can be more assured that the subsidy will go to foods. The subsidy schedule is torqued heavily toward the perishable commodities. Outside of a sheltered market, people will choose the most efficient option, which will be either sealift or bulk deliveries twice a year.

Because it was a sheltered, non-competitive system, people were going to a very expensive just-in-time fly-in model, and the most expensive option was the one people picked, because they had no incentive not to. Under the new system, if retailers can squeeze more profit out of using the sealift more smartly or by using bulk orders or whatever, they'll do that, and they will pocket the efficiencies.

I want to be clear: we and the regional agencies will work with communities on issues of logistics and supply chains and on potentially paying for warehouses. But everywhere else, the private sector decides what they need and what's appropriate to their market. And we'll work with them on that.

[The Chair, Conservative, Bruce Stanton]

Very good. Thank you, Mr. Bagnell.

We'll go to Mr. Rickford.

[Greg Rickford, Conservative, Kenora, ON]

Thank you, Mr. Chair.

Thank you, Michael, for clearing up some of the issues that were raised by my colleague just a moment ago with respect to some of the key things that were flawed with the mail program--the lack of efficiency and poor visibility among communities across the north. There may have been some that benefited, but there was certainly a disparity, and of course a lack of transparency, which often left consumers with not as much of a subsidy as they would have liked, if one at all really, and not knowing who to blame.

Some folks have suggested here at committee today, and indeed when we've been working through the report, that we should just throw up warehouses everywhere and build buildings. Now I'm hearing about additional space in homes for a program that otherwise has significant benefits. But particularly with the operators, Michael, there are a number of key features with respect to some of the problems we've seen already with the messaging of this.

You talked about the just-in-time concept, which those of us who are familiar with business recognize as a key driver for the modern ways of doing business. Obviously the sealifts issue was something that had something to do with inventory management and gave rise to some stories in the media about costs of certain products.

Can you just take this last minute or two to highlight some of the initiatives under this program for small-shop operators? This is key. Not all of the operators will be the North West Company. For example, there are smaller operators in isolated communities, particularly in the great riding of Kenora, who may benefit from some of this. I was wondering if you could just speak to some of the training initiatives for their benefit.

[Michael Wernick]

We'll work with regional development agencies to support specific projects by specific businesses. These are basically SME support programs, and we know who is really good at logistics, because we spent three years studying and renovating this program. Canada is actually really good at logistics and supply chain over big geography. There are lots of Canadians who are really good at this stuff, and we will do our best to make them available to people who were formerly in a very sheltered, non-competitive environment. They are open now to competition and choice.

The small retailers will probably do reasonably well working with personal orders as well, because people will be able to place orders wherever they want. So I think they will be competitive. We'll see. Everybody is going to adjust to a new open marketplace. You'll have the opportunity as a committee to call us and retailers and other people in the supply chain back here after we have a quarter or two of experience.

[The Chair, Conservative, Bruce Stanton]

Okay.

Mr. Lévesque, we have time for only a very short question. We're talking 30 seconds, because we still have to get to our votes.

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

Thank you, Mr. Chairman.

I simply regret that our colleague Greg was not here during the testimony on Nutrition North. Obviously, his opinion may have been distorted as a result.

Mr. Wernick, I'd like to know whether the list that Marc requested of works to be carried out in the communities could be sent to all committee members.

[Michael Wernick]

Pardon me?

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

Could the list be sent to all committee members?

[Michael Wernick]

Yes, we'll answer all your requests through the committee clerk.

[The Chair, Conservative, Bruce Stanton]

Excellent.

Members, before us there are four votes on supplementary estimates (C). Do we have unanimous consent to vote on all four as a block, or do we want individual consideration of each?

Is there consent? There's consent.

INDIAN AFFAIRS AND NORTHERN DEVELOPMENT Department Vote 1c--Operating expenditures..........$1 Vote 5c--Capital expenditures..........$1 Vote 10c--The grants listed in the Estimates and contributions..........$1 Vote 15c--Payments to Canada Post Corporation..........$1

(Votes 1c, 5c, 10c, and 15c agreed to on division)

[The Chair, Conservative, Bruce Stanton]

Shall I report the supplementary estimates to the House?

[Some hon. members]

Agreed.

On division.

[The Chair, Conservative, Bruce Stanton]

Okay, members, that is it.

We will see you back here on Tuesday morning after the break. We have the report on the Cree-Naskapi Commission as well as the National Association of Friendship Centres on March 22.

I thank our witnesses for their presentations and responses today.

Thank you very much for your attention.

The meeting is adjourned.