Public Accounts Committee on March 23rd, 2015

[Colleen Swords]

No, the rationale was that those that were using it obviously needed it, and if they weren't using it, it was taken as a proxy for not needing it. But if you look to the future what we're doing now is we're gathering information—

[Dennis Bevington, NDP, Northwest Territories, NT]

In the report from the Auditor General—

[The Chair, NDP, David Christopherson]

To be fair, give her a little bit more time to answer that. She didn't even get to it.

But please be brief, the member doesn't have much time.

[Colleen Swords]

Basically the program.... It's a new program and we brought it into place. We're identifying issues that we need to address and community eligibility is one of the issues. We've put in our response to the Auditor General and in our action plan how we're planning on doing that methodologically.

[Dennis Bevington, NDP, Northwest Territories, NT]

Fair enough. When the Auditor General came and talked to you, your department knew that there were 50 communities that weren't being served by this program, so you obviously had done your homework there. You knew that it was going to cost $7 million to service them. You knew very well what was going on with these communities, that they weren't being serviced, that there was a cost attached to it, that the cost would have had to come out of the existing budget, and that you would have had trouble with the communities that already were getting the subsidy if you spread it out a little thinner.

Did you not feel that you had some responsibility to the other communities? Did you not feel that as a government agency you had a responsibility to treat Canadians fairly?

[Colleen Swords]

That's why we're doing the survey that we're doing and gathering the information methodologically and consistently so that we have information on all possible communities. We'll be publishing the information that we get, we hope, some time this summer so that we can verify it and allow communities an opportunity to indicate whether they think it accurately represents their situation or not. Based on that we'll be making recommendations.

[The Chair, NDP, David Christopherson]

Sorry, your time has expired.

We now move to Mr. Albas. You have the floor, sir.

[Dan Albas, Conservative, Okanagan—Coquihalla, BC]

Thank you, Mr. Chair.

I just want to thank all of our witnesses today for providing their insights into this program.

Obviously for any program, Mr. Chair, you want to know two things: is the policy and programming effective and is it also efficient?

From reading some of the testimony we've had here I see there's been a 25% increase of shipments of healthy food, and as the official said, someone's eating that. That's a good sign because the program was designed for that. Second to that, Mr. Chair, the lowering of the cost of the food basket for a family of four is a good sign.

I think what we're talking about is the efficiency. How do we make sure there is full transparency? Most of us are very supportive of that, but I think it behooves us to just take a step back. I would like to ask a few questions to the officials because, again, as a new member of Parliament this program came in relatively around the same time as I did, so I would like to ask some questions about the old program.

I understand the previous food mail program wasn't only subsidizing food. In fact, there were other non-food items such as equipment, personal hygiene items, and machinery. To the officials, can you confirm if that was the case?

[Colleen Swords]

Yes, that is the case and it was one of the complaints and criticisms of the old program. It had some categories of things like equipment that are necessary for food. Over time snowmobiles got included in that, so there were parts for snowmobiles going up under food mail because, legitimately, hunters were going out and getting food.

It became so broad that it wasn't focusing and highlighting the perishable nutritious food that really is the highest cost in the north. We were trying to separate out food that could come up by boat in the summertime and therefore wasn't perishable. We tried to target and tailor a bit more to really get at the perishable nutritious part of food.

[Dan Albas, Conservative, Okanagan—Coquihalla, BC]

Do you have any documentation of the percentage of the food mail program that was actually funding nutritious, perishable food? Do you have any percentages you can share?

[Colleen Swords]

I can give you a percentage but it is not perfectly accurate. I think if the Auditor General looked at it he might find that there are some variations, but around 80% was perishable food but there was about 20% that seemed to be going to these categories related to food.

[Dan Albas, Conservative, Okanagan—Coquihalla, BC]

What was the average budget for food mail previously?

[Colleen Swords]

It was about $57 million I believe.

Am I correct?

[Stephen Van Dine, Assistant Deputy Minister, Northern Affairs, Department of Indian Affairs and Northern Development]

It was appropriated at about $28 million and we were spending about $57 million to $58 million in the last year of the operation of the program.

[Dan Albas, Conservative, Okanagan—Coquihalla, BC]

Do we know how much of the budget was spent on subsidizing the cost of food as opposed to non-food items?

[Stephen Van Dine]

We have the figures that the deputy pointed to in terms of the rough approximation of volume of activity, so 80% of the volume went to nutritious and perishable. About 20%.... We would have to do some additional analysis to break down the dollar figure.

[Dan Albas, Conservative, Okanagan—Coquihalla, BC]

In my thinking—and please feel free to add to this—the Government of Canada had a program through your agency. The decision was made that the particular program was not effective in making sure that perishable, healthy foods were being made available to northerners in a way that increased the quality of life. The old program wasn't delivering on that, and to be more effective, it moved to nutrition north Canada. Is that correct?

[Colleen Swords]

Certainly one of the main objectives was to try to make sure the money was well spent on perishable, nutritious food and not on things that could get to their destination in ways other than through expensive airlift.

[Dan Albas, Conservative, Okanagan—Coquihalla, BC]

Now I just have another question, Mr. Chair.

Member Bevington raised this. It seems from his line of questioning that he was almost articulating that somehow there is an inherent lack of fairness in how the program was structured. To me, I think he raised questions about why specific communities received a larger subsidy compared to ones that didn't, and to me, I think you answered that. A lot of it has to do with transportation costs, the accessibility, or whatnot.

There is a formula, and these things are taken very seriously, I'm sure, by the department. Is that correct?

[Colleen Swords]

Yes indeed. I can ask my colleague to explain the formula a bit, if you'd like him to do that.

[Dan Albas, Conservative, Okanagan—Coquihalla, BC]

I certainly would appreciate that.

[Stephen Van Dine]

The formula by which we apply the subsidies took into account in the base year the lowest shipping rate for each community of the three biggest providers. From that we took into account a small variation, to take into account, over and above transportation, the higher cost of operating and providing retail establishments in the community. That determined the general approach to setting the initial rates. We then increased those rates the year following, and those rates haven't been adjusted since.

[Dan Albas, Conservative, Okanagan—Coquihalla, BC]

What you are saying is that there was a criterion—

[The Chair, NDP, David Christopherson]

Your time has expired.

[Dan Albas, Conservative, Okanagan—Coquihalla, BC]

Thank you, Mr. Chair.