Indigenous and Northern Affairs Committee on March 9th, 2021

[The Chair, Liberal, Bob Bratina]

Hello, and good afternoon to all.

We have quorum, and I'll call this meeting to order.

I will start with the acknowledgement that while in Ottawa, we meet on the traditional unceded territory of the Algonquin people, but throughout the grid you will see people spread across first nations territories virtually all across the country. Here in Hamilton East—Stoney Creek, Haudenosaunee, Anishinabe and Chonnonton first nations are the traditional holders of these lands.

Pursuant to Standing Order 108(2) and the motion adopted on October 27, 2020, the committee is continuing its study of food security in northern communities.

To ensure an orderly meeting, remember to speak and listen in the official language of your choice, which is found on the interpretation icon at the bottom centre of your screen. If you select interpretation, you will pick French or English. You may switch from speaking one official language to another without changing anything. When you're not speaking, your microphone should be on mute.

With us today by video conference are the following witnesses: Tara Tootoo Fotheringham, the CEO of Arctic Buying Company Inc. Kivalliq; Frank Suraci, the president and CEO of FJJ Growtec; and Tod Nadon, the owner and manager of Fresh Market Foods.

Thank you, all, for joining our committee.

We have six minutes for each of our witnesses, beginning with Tara Tootoo.

[Tara Tootoo Fotheringham, Chief Executive Officer, Arctic Buying Company Inc. Kivalliq]

Thank you very much for inviting me today.

There is still much work to do when it comes to food security in northern Manitoba, northern Ontario and definitely in Nunavut. Our passion is to try to work with the government agencies as a middle person who can hear what our customers need, are frustrated about, as well as articulate that to the INAC representatives who can make some of those changes and/or can take up the changes.

It's very important to note that food security is not just about how much food can get to a community, but how the food can be packaged to get there. There are still lots of challenges when it comes to weather and what items are being subsidized. Certainly some items are needed because they have been part of the established cultural needs for years and are not being considered within the program.

I know dieticians in Ottawa make all these decisions about what's healthy and what's not, but given the fact that Canada and many other countries have suffered a great deal of mental health issues in the last year, I feel that including some items that are very culturally needed should be within the nutrition north program.

Thank you.

[The Chair, Liberal, Bob Bratina]

Thank you very much.

That brings us to Mr. Suraci for up to six minutes.

[Frank Suraci, President and Chief Executive Officer, FJJ Growtec]

Good afternoon. My name is Frank Suraci. I'm president and CEO of FJJ Growtec.

It is my pleasure, on behalf of our partners EnerDynamic Hybrid Technologies and Canadore College to present our solution to improving access and affordability of fresh produce to our indigenous communities in the Far North.

The issue of food security continues to prohibit our communities from securing fresh produce. Dietary deficiencies increase the levels of obesity, diabetes and other illnesses that impact the well-being of our indigenous populations.

To resolve these issues, our federal government commits generous financial resources to offset shipping costs to increase access and food affordability. Unfortunately, with the rising cost of transportation, lack of food handling and weak infrastructure in the north, the problems of securing a supply of affordable fresh produce continue.

Our solution is based on a three-way alliance of the federal government, the private sector and the indigenous communities. With a joint effort, we can implement our Growtec units to develop an indoor cultivation sector to grow fresh produce within these communities. As a result, we stimulate job creation and economic opportunities within these regions.

Utilizing our innovative technology, we aim to achieve two primary objectives. The first is to minimize federal subsidies. The second is to enable communities to grow fresh produce locally at commercial volumes to meet community demands. Our solution model is based on sustainable principles generated from science, best business practices, community preparedness and a high regard for minimizing any impact to the environment.

The Growtec strategy provides a turnkey program for a commercial-sized indoor grow unit that withstands the harsh climate and extends the short growing season to a full 365-day operation. These units consist of an indoor growing facility powered by renewable energy engineered to reduce dependency on the community's electrical grid system. This strategy also includes an educational component hosted by Canadore College to develop the skill capacity to manage these units and take advantage of potential business opportunities.

For example, a 6,000 square foot indoor grow unit placed in a community can produce up to 30,000 heads of romaine lettuce annually. The average cost to produce romaine lettuce in these units is approximately $1.50 per head. In comparison, this is much lower than the imported lettuce that sells for upwards of $7. The flexibility of the unit allows cultivation of broader varieties of fresh produce to meet community preferences.

Our technology uses hydroponics within a controlled growing environment with wall systems that provide R-55 insulation and an interior membrane that is resistant to mould and mildew. The exterior consists of fused solar panels that are part of the actual building's infrastructure.

Our Growtec units are scalable and available in much larger sizes. Renewable energy is generated using solar panels. During the winter months when sun exposure is at its minimum, a 10 kilowatt wind turbine is used to augment the power requirements. Additional energy security includes battery storage to ensure three to five days of full autonomy.

We have introduced our technology to members of Indigenous and Northern Affairs Canada. Upon review, the ministry has suggested that we solicit the interest of indigenous communities to participate in a proof-of-concept initiative.

To date we have secured interest of five communities. They are Big Trout Lake First Nation and Lac Seul First Nation in Ontario, Whitefish Lake First Nation in Alberta, a community in B.C. and one in the Northwest Territories.

We continue to discuss our next steps with representatives from the departments of Indigenous Services and Agriculture and Agri-Food Canada to implement our strategy as a means to stimulate economic growth in the indigenous communities while addressing the issues of food security.

The cost for this proof-of-concept project includes the installation of a 6,000 square foot Growtec unit in each of the communities. In addition, educational allowances have been included for 25 students, five from each community, to attend Canadore's 12-month training curriculum. The estimated cost of the project is $1.7 million for each of the five projects.

Regarding the environmental benefits of our technology, the units will offset approximately 11,500 tonnes of greenhouse gases over the 25-year cycle of the five units. The carbon credit value monetized over this term generates revenue of over $1.8 million.

To assist the communities in managing these cultivation projects, we have assembled a number of companies prepared to mentor and, wherever possible, enter into a partnership to expand the commercialized enterprise. In addition, we have secured private financiers to underwrite these projects and assist the communities to commercialize production.

It is our hope that we have sparked your interest to apply our transformational technology to resolving the problems of food security in the north and minimize the federal government's obligation of continued subsidies on this issue.

I thank you for your attention.

[The Chair, Liberal, Bob Bratina]

Thank you very much. It was well within our six minutes.

To conclude from the witnesses, we have Todd Nadon, the owner and manager of Fresh Market Foods.

Todd, please go ahead. You have six minutes.

[Todd Nadon, Owner and Manager, Fresh Market Foods]

Hello, Mr. Chair. Hello, everyone. I extend my appreciation for you allowing Fresh Market Foods to participate in this study.

My name is Todd Nadon. My partner, Tracey Bullock, and I are owners of Fresh Market Foods. We are a medium-sized, full-service grocery store located in Sioux Lookout, Ontario.

Before I get much into it, I will start by conveying my gratitude and admiration. We have worked with an amazing number of people in first nation communities who have put in selfless efforts to organize and provide for the needs of their people. To that end, I respect all essential workers helping Canadians today.

Fresh Market Foods is part of a vast network of services provided to 29 remote communities up north. Though we have always provided grocery services, we have only had the privilege of being approved as a southern supplier for nutrition north for the past two and a half years. We knew right away when we started that we would have to listen, be flexible and understand how we could best help our customers buy high-quality, nutritious food; continue to develop better and more efficient services; be a partner and aid in communities developing their own means of supporting food security; be responsible and sustainable to our environment; and build partnerships to help us move product, educate and give feedback. One thing about the program is that it's continuing to change our business, and for the better, and the great part is that it's driven by our customers.

Our first step in the journey was to hire a team to manage the program. It was important to us that our customers had someone they could contact should they have questions and to help them better understand how our programs work. We also wanted someone to oversee that quality met our standards and to ensure that orders were processed accurately. Next, we worked with a technology company that integrated invoices into our point-of-sale system that were transparent, accurate and simple to understand. We built partnerships with different airlines so that we could use our buying power to get preferred freight rates and extend those discounts to our customers.

To help ensure we were able to fill orders quickly, we changed our production systems in the store. We installed machinery in our bakery so we could bake all our own breads and rolls on site, and we trained a 24-hour production crew. We have also applied for and received a licence through the Ontario Ministry of Agriculture, Food and Rural Affairs, and have done an extensive renovation on the store so that now we can process all our meats right on site.

We have a proactive tracking system and good communication with our shippers so that if orders are not able to ship because of delays such as poor weather, we can pull fresh product out of the order, sell it through our retail network and replenish the order when it's ready to go.

We endeavour to continue to evolve our business to provide fresh product and increase availability. We are in talks with three companies that are building a business plan around growing facilities for more local produce. Ribbit, out of southern Ontario, has initiated a partnership in which we will be testing the potential of autonomous airplanes in the distribution of foods to the north. We are working with a tech company in the development of an e-commerce site that is customized to not only give full access to our products available, but will provide information on nutrition value and attach the subsidy levels to each of these products. By the fall of 2022, we are hoping to finish an application to be able to cut and process traditional meats right here in our facility.

We have set up partnerships with different area management boards to create training opportunities and facilitate on-the-job experience in relation to the courses they are trying to teach. We have worked with the culinary program in regard to basic meat-cutting and baking skills. They have also spent time in our produce and deli departments to learn proper meal preparation.

We have had the privilege of working with our community partners on infrastructure projects in which communities are initiating the ideas around producing their own meats and their own baked goods. One community has drawings of a whole new facility that would see them butchering their own meats and baking their own breads. A lot of the work behind this project would also see them build capacity.

Fresh Market Foods understands there are concern about climate change and the impact it is having. We are working on being a more sustainable business. Our facility is now heated and cooled with geothermal energy, and we are making serious financial investments in machinery and lighting that is more energy efficient. We are working with our wholesaler to recycle all cardboard and plastics that are brought into our facility.

By processing our own products on site and increasing capacity, we're reducing our reliance on trucking. For instance, we have the ability to bake our own bread, so we can bring in a load of dry ingredients once a month, whereas before we relied on a truck to bring in baked products three days a week.

We have a coordinator on site to work with airlines to maximize payload on the airplanes. Instead of sending everything through cargo, we have a chart that lets us know the allowable limits on the airplanes and what types of airplanes are available in the fleet. If it is warranted, or if there is enough freight going to a single community, we'll charter a whole plane just for that load of groceries.

The program is infectious. It has created some great initiatives within communities themselves. We have witnessed coordination between different departments in finding ways to utilize the programs, like health departments working with education departments to create nutritious meal choices and create educational videos to learn how to cook.

We are also working with the northern Ontario fruits and vegetables program in a coordinated effort to provide healthy fruit and vegetables to 12 schools on a weekly basis in an education-nutrition effort to expose them to peak seasonal produce whenever possible.

We feel there is an opportunity to create more awareness around the program. We have worked extensively through our channels, by doing such things as talking with key people and using platforms like social media, but every day we are meeting people who are being exposed to the program for the first time.

Fresh Market Foods recognizes that there are huge areas for improvement within our own operation that would see us deliver products faster and at a better cost. However, we are years away from being able to overcome the financial barriers.

To close, I want to convey what a wonderful experience it has been dealing with our partner communities in the north.

To this committee, I hope my thoughts reflect the spirit of nutrition north, because my team and I are truly inspired by the efforts that have been made, and we're very proud to be a part of this.

Thank you so much.

[The Chair, Liberal, Bob Bratina]

Thank you very much to all of our witnesses for their presentations.

We will have time for each of the parties to have a six-minute question period.

We have Mr. Melillo, Mr. Powlowski, Madam Bérubé, and Ms. Blaney.

We will start with Eric for six minutes.

[Eric Melillo, Conservative, Kenora, ON]

Thank you very much, Mr. Chair.

I just want to extend my appreciation to all of the witnesses who are taking the time to join us today. We could probably talk with each one of you for an entire week on a lot of these issues, so I'll try to ask as many questions as I can. I would like to start with Todd in Sioux Lookout.

Todd, we've had a number of conversations about food security, about nutrition north, and frankly about some of the really good work you're doing to go above and beyond what is required in terms of showing transparency and building a very strong relationship with consumers. I don't think it's a secret that there are many people out there who distrust the nutrition north program, and I applaud the work you're doing to rectify some of that.

I'm wondering if you could speak a bit more about some of the ways you've been able to show that transparency. I think it's something that can be replicated more broadly, right across the board.

[Todd Nadon]

I think our biggest investment in creating transparency was definitely in the technology part of the business. It's something that we continue to try to evolve.

There is an enormous challenge in identifying each product that we have in the store and of associating a weight with each one of those products. That is not something conventional for a grocery store or any type of operation that I've run in the past. We also need to attach a subsidy level to each type of product in the store. Then we need to attach that to a community. Then it needs to be attached to an airline. You can see the overwhelming process that goes on in trying to come up with a subsidy and a total to send up north.

Something that's been great is that we've found companies that are willing to work with us on the development side as opposed to our just buying something out of a box. The great part about that is that, because we've created that partnership, we have the ability to continue to evolve this program. With whatever recommendations come from committees like this and whatever feedback we get from our customers, they have been really great in working with us to change the program so that it makes sense. We've made so many changes to it in the short two and a half years, and I don't know what the future is going to look like for it.

Hopefully that answers your question.

[Eric Melillo, Conservative, Kenora, ON]

It does absolutely, and I appreciate those comments.

You mentioned the overwhelming process, and that makes me think of a lot of the administrative strains that the program puts on some of the bureaucracy, if I could use that term.

We spoke before about some of the challenges that a number of different retailers have in actually being able to access the program. I'm wondering if you could speak a little bit about those as well. What are some of those challenges, from an administrative point of view, that we might be able to remedy through some of the recommendations we put forward?

[Todd Nadon]

When I look at the aspects of the program, are there inefficiencies, and are there things within the program that are redundant? It's important when we're dealing with this. In my opening remarks, I used the word “privilege”. We're extremely privileged to offer this to the north. When it comes to transparency and accountability, those aspects are a part of that program. To take them away would take away that transparency and accountability. It's important for us to find solutions within the business environment that would help us administer that. When we work with these technology companies, we are finding solutions. We are finding better ways.

When it comes down to what is the best solution going forward, we do this kind of work within our grocery stores. We have working groups, or we have the ability to reach out to people like Tara—maybe she has some of the same issues that we have—and discuss some of those ideas and best practices.

At the end of the day, the goal is to provide for the north fresh and healthy food at the best cost. If we can all work together to achieving that goal, competition or not, it's probably something that reaches our end goal.

[Eric Melillo, Conservative, Kenora, ON]

Ms. Tootoo Fotheringham, would you have any comments on that?

[Tara Tootoo Fotheringham]

We definitely have many challenges. It is a privilege to be a part of the program, but it's also an expense, with all the requirements on the reporting, and the thousands of items that you can possibly pull from. Part of the system is set up to fail, because we do not have the UPCs, universal product codes, that are accepted. We don't have the weights. We certainly don't have the information to plug away and start running. There's a lot of manual labour. There are many mistakes and trials. Changes need to happen.

[Eric Melillo, Conservative, Kenora, ON]

Mr. Suraci, hopefully we'll have a bit to time for the discussion here. We've had great conversations regarding the work you're doing in my riding. One of the things you mentioned, if I recall correctly, was potentially reimagining some of these subsidies to support projects like you are doing.

Could you speak to that and what kind of support we might be able to—

We're over time, I guess.

[The Chair, Liberal, Bob Bratina]

Hold that thought.

We'll go to Mr. Powlowski, for six minutes. Perhaps we'll be able to conclude.

[Marcus Powlowski, Liberal, Thunder Bay—Rainy River, ON]

No problem, Eric, because I'm going to keep going where you were going with Mr. Suraci.

I agree with you. The greenhouses are a big part of the solution to the problem of providing affordable nutrition to northern communities. In your presentation, you mentioned that the cost of each of the greenhouses was $1.7 million. Have you already secured private financing? Are these private companies willing to finance this? Given it's a turnkey operation, what's in it for them financially?

In answering, you could mention some of the companies, because I'm trying to figure out how this would work. It sounds like a great idea, but I'm wondering how the financing would work.

[Frank Suraci]

First of all, they're not greenhouses. It's almost the opposite of a greenhouse. They're not made out of glass. They're large-scale walls that are insulated and encrusted with solar panels. It's totally dark. There's no sunlight coming in.

We're looking at this project as a possible P3. Brevet, Canaccord and some of these other companies that are coming forward would look at this and say they would finance these projects, but they would also secure the operational requirements for the long term as part of their P3 requirements, to ensure these projects are profitable and that these projects meet all the requirements, as we had initially stated, on the onset of launching these units.

What's in it for them? There's an opportunity to provide financing for the initial capital. There are ongoing working capital requirements. There's commercialization. We do have other large-scale companies willing to come in and create—what's the best word for it—an economy up there. Having fresh tomatoes is great, but they last longer if they're frozen or canned. Much like we all go to the grocery store and we buy tomatoes for spaghetti sauce or pizzas or whatever, we're looking at that kind of an application where they can grow the foods right in their area and start developing a commerce between communities, buying or selling or whatever they want to do, and exchanging the foods so they have access to various fresh produce in whatever form they come in.

The key objective here is to start cutting out some of the costs that lead to the high unaffordability of produce to the first nations up there. Transportation is expensive. We're not going to do away with all of the transportation, because we can't cover all the food groups and all the requirements of the communities, but surely we can look at reducing 30% to 40% of the transportation subsidies for these communities.

[Marcus Powlowski, Liberal, Thunder Bay—Rainy River, ON]

It's planned as a turnkey operation, though, and eventually it's turned over to the first nation communities. How are they going to finance that, or are you thinking of government?

[Frank Suraci]

There would be some government involvement or participation to secure ties in case of default, but overall, as a P3, we're looking at operating these things and helping them develop the capacity to manage them and make them a success. There's no value in having them fail. That's why we're looking at the interest of five communities to do the proof of concept. We think we've addressed all of the issues, but certainly there's always something we forget or something we have to do. Training, developing and helping other companies apply their know-how on commercializing and developing an economy is important for them.

[Marcus Powlowski, Liberal, Thunder Bay—Rainy River, ON]

Are there other places that have built units or are these new units that your companies have invented?

[Frank Suraci]

We invented the large-scale ones. You might have seen some of the shipping containers that have evolved up there. They're relatively small. They don't have the capacity to develop volumes to feed a community of 1,000, 2,000 or 3,000 people like Big Trout Lake or Lac Seul. You need some large-scale units to develop those volumes of produce, and that's what we are. There's nobody else that really does it like us.

[Marcus Powlowski, Liberal, Thunder Bay—Rainy River, ON]

Have other countries done something similar—I'm thinking of the Nordic countries or Russia—where they've done the same kind of hydroponics with artificial light?

[Frank Suraci]

I have not seen anything comparable to ours right now. I'm not aware of any. As a matter of fact, we have inquiries from overseas to bring our units over there.

[Marcus Powlowski, Liberal, Thunder Bay—Rainy River, ON]

Is everything going smoothly in terms of interacting with the government? We had the ministers here, and I was asking something about greenhouses, and they were saying, “Well, that's not really what we do. That's the Ministry of Agriculture.” I think I asked the Ministry of Agriculture and they said, “No, that's Indigenous Affairs.” Have you done better?

[Frank Suraci]

No. That's where we are today. Everybody is trying to figure out where the money is coming from and who takes responsibility.

I can only go so far with the financing. We've had initiatives offered to us that would pay a portion, a small portion. We have to come together and understand what the first nations are capable of. Somewhere down the road, two or three years down the road, they should be profitable and should be able to carry the load of the financial burden of the units if they're doing it properly. It's important we get involved to make sure they meet those requirements. We need some help.