Appearance before the Standing Committee on Indigenous and Northern Affairs (INAN) - Nutrition North Canada (May 8, 2024)

Logistics

Date: May 8, 2024

Time: 5:30 p.m. - 6:30 p.m. (EDT)

Location: Wellington Building, Room 415

Subject: An internal review of Nutrition North has been started and companies are earning extremely high profits off Northerners' food insecurity while accepting federal subsidies.

Appearing

Committee Membership

• MP John Aldag (LIB – BC) (Chair)
• MP Jaime Battiste (LIB – NS)
• MP Ben Carr (LIB – MB)
• MP Anna Gainey (LIB – QC)
• MP Michael V. McLeod (LIB – NWT)
• MP Marcus Powlowski (LIB – ON)

• MP Jamie Schmale (CPC – ON) (Vice-Chair)
• MP Eric Melillo (CPC – ON)
• MP Martin Shields (CPC – AB)
• MP Bob Zimmer (CPC – BC)

• MP Sébastien Lemire (BQ – QC) (Vice-Chair)

• MP Lori Idlout (NDP – Nunavut)

Parliamentary Analysis

• MP Michael V. McLeod (LIB) will likely ask questions that pertain to communities in his riding in the Northwest Territories. He will likely argue that funding for the Nutrition North Canada Program should be used to build roads to northern communities instead.
• MP Marcus Powlowski (LIB) may ask for recommendations on addressing food insecurity in the north outside of improving the Nutrition North Canada Program.
• MP Jaime Battiste (LIB), Parliamentary Secretary to the Minister of Crown-Indigenous Relations, has been a strong advocate for First Nations, Métis, and Inuit issues throughout his career. He may ask about the impact of climate change on delivering food to the north.
• MP Ben Carr (LIB), may ask questions about ensuring balancing food costs, food security, and Indigenous-informed nutrition.
• MP Anna Gainey (LIB), may ask questions about the connection between food insecurity and climate change.
• MP Jaime Schmale (CPC) (Vice-Chair), Vice-Chair of the Committee and CPC Critic for Crown-Indigenous Relations and Critic for Indigenous Services, will likely ask about the Nutrition North Canada Program's targets and timelines. He will likely tie the high cost of food and inflationary prices to the carbon tax. He may also gear his questions towards discussions on economic reconciliation.
• MP Eric Melillo (CPC), may criticize the Nutrition North Canada Program, and will not likely tie food insecurity to the carbon tax. He may also ask about the reliance on winter roads and aircrafts to deliver food to the north.
• MP Bob Zimmer (CPC) is the CPC Critic for Northern Affairs and Arctic Sovereignty, as well as the Critic for the Canadian Northern Economic Development Agency. He may ask questions about the funding for the Nutrition North Canada Program needing to benefit people rather than corporations.
• MP Martin Shields (CPC) may ask questions about food insecurity.
• MP Sébastien Lemire (BQ) (Vice-Chair), critic of Crown-Indigenous Relations and Northern Affairs, may ask questions about funding distribution to resolve food insecurity.
• MP Lori Idlout (NDP), the critic of Crown-Indigenous Relations and Northern Affairs, will likely ask questions that pertain to her riding in Nunavut. She has continually been critical of the funding for the Nutrition North Canada Program benefiting corporations rather than people in the north. She may ask questions about the continuation of high grocery prices in the north, in spite of the Nutrition North Canada Program.

Recent INAN studies, reports and government responses

• Subject Matter of Supplementary Estimates (C), 2023-24
• Subject Matter of Supplementary Estimates (B), 2023-24
• Opinion by the Supreme Court of Canada regarding Bill C-92 (last meeting on March 18, 2024)
• Restitution of Land to First Nations, Inuit, and Metis Communities (last meeting on February 26, 2024)
• Improving Graduation Rates and Successful Outcomes for Indigenous Students (last meeting on April 10, 2024)
• Report 12 - Bill C-53, An Act respecting the recognition of certain Métis governments in Alberta, Ontario and Saskatchewan, to give effect to treaties with those governments and to make consequential amendments to other Acts (presented on February 8, 2024)
• Government Response to Report 11 – Food Security in Northern and Isolated Communities: Ensuring Equitable Access to Adequate and Healthy Food for All (presented on January 29, 2024)
• Government Response to Report 10 – Arctic Security and Sovereignty, and the Emergency Preparedness of Indigenous Communities (presented on October 19, 2023)
• Government Response to Report 9 – Reclaiming, Revitalizing, Maintaining and Strengthening Indigenous Languages in Canada (presented on October 16, 2023)
• C-51 – An Act to give effect to the self-government treaty recognizing the Whitecap Dakota Nation / Wapaha Ska Dakota Oyate and to make consequential amendments to other Acts (last meeting on June 19, 2023)
• Report 8 on Main Estimates 2023-24 (presented on May 30, 2023)
• Report 7 – Bill C-45, An Act to amend the First Nations Fiscal Management Act, to make consequential amendments to other Acts, and to make a clarification relating to another Act (presented on May 12, 2023)
• Government Response to Report 6 – Moving Towards Improving the Health of Indigenous Peoples in Canada: Accessibility and Administration of the Non-Insured Health Benefits Program (presented on April 17, 2023)

In the Media

• On February 23, 2024 - CBC's Fifth Estate aired an episode titled "Who's minding the store?", which examined the high price of food across Canada. There was a segment specifically around high food prices in the North. The communities of Norway House (Manitoba) and Iqaluit (Nunavut) were discussed and evidence of high and increasing food prices were shown. The origin, goals, and funding to the Nutrition North program were outlined. Part of the segment focused on the lack of competition in grocery store chains in the north and research was discussed showing that across 83 northern communities, 35 only had 1 grocery store, and in 30 of those communities it was the same company – Northwest. The research done by a University of Toronto professor found that for every $1 in Nutrition North funding provided to retailers, only about $0.67 was being passed to the consumer. This differed from previous research comparing north and south prices that found over $0.90 was being passed down. Specific examples of price increases included olive oil and bottled water. Community leaders and the researcher allege that the program doesn't have the oversight and accountability mechanisms required to ensure funding is used to the benefit of communities and the funding is instead contributing to record revenue and profits for retailers.
• CBC also published a snippet of an APTN interview with Director General Wayne Walsh about the program.
• CEOs of northern retailers, minister, heading to committee to talk about northern food subsidy program
• Canada Post closes loophole for Nunavummiut to access free Amazon shipping
• North West Company says officials intends to participate in committee hearings on subsidy program - APTN
• Committee to call grocery store CEOs to talk about Nutrition North program – APTN
• External review of Nutrition North food subsidy program possible, minister says - CBC News
• More information needed to assess Nutrition North: Minister – APTN
• Renewed calls for Nutrition North program revamp - Nunavut News
• Jagmeet Singh calls for Nutrition North 'overhaul' during Iqaluit visit - Nunatsiaq News
• What's behind rising food costs in Canada's North? Questions emerge over how retailer sets prices - CBC News

Budget 2024

Budget 2024 proposed to provide:

• $23.2 million in 2024-25, to Crown-Indigenous Relations and Northern Affairs Canada for Nutrition North Canada's subsidy program to lower the cost of nutritious food and other essential household items; and,
• $101.1 million over three years starting in 2024-25, to support the Harvesters Support Grant and Community Food Program Fund and promote Indigenous communities in implementing culturally appropriate, local solutions to address food insecurity.

Meeting Proceedings

The Chair will call the meeting to order and provide instructions for the proceedings. They will then introduce the witnesses and invite the witnesses to deliver opening remarks (limit of 5 minutes). This will be followed by a Q&A period (details below).

It is recommended that all speakers speak slowly and at an appropriate volume to ensure they are heard by the interpreters. All witnesses are asked to mute their microphones unless they are speaking.

Following the opening remarks, there will be rounds of questions from Committee members (as listed below). The rounds of questioning will repeat when the second panel commences in the second hour.

Committee members will pose their questions in the following order:

• First round (6 minutes for each Party)
  • Conservative Party of Canada
  • Liberal Party of Canada
  • Bloc Québécois
  • New Democratic Party of Canada
• Second round
  • Conservative Party of Canada (5 minutes)
  • Liberal Party of Canada (5 minutes)
  • Bloc Québécois (2.5 minutes)
  • New Democratic Party of Canada (2.5 minutes)
  • Conservative Party of Canada (5 minutes)
  • Liberal Party of Canada (5 minutes)

The meeting can be watched via ParlVU, however there may be an up to 70-second delay with the webcast.

Other Information

Witnesses should arrive early to allow time for security screening. Screening could take 30 minutes or more for those without a Hill pass.

Key Messages

• Nutrition North Canada (NNC) supports food security in northern isolated communities by improving access and affordability to market, country and local food.
• While it was initially established as a retail subsidy program, recent improvements have transformed NNC into a broad and inclusive program designed to respect and respond to the unique food security priorities of Indigenous and Northern residents.
• The Government of Canada continues to work closely with Indigenous and Northern partners and other government departments to identify shared, northern-based solutions for improving food security.

Background

• The Minister announced NNC's expanded suite of food security program in August 2022. The program is now supporting Northerners in the following ways:
  1. NNC Subsidy: By subsidizing a list of perishable foods and essential items flown in by air and non-perishable foods and essential items brought in by seasonal sealift, barge, or winter road.
  2. Harvesters Support Grant: By increasing Northerners' access to traditional foods by supporting hunting, harvesting, and food sharing.
  3. The Community Food Programs Fund: By directly supporting culturally appropriate community-led food security activities and assessing locally led options for improving the NNC program even further (for example, elder meal programs, school meal programs, etc).
  4. The Nutrition North Food Security Research Grant: By supporting Indigenous-led research on food access and the cost of living in the North.
  5. Nutrition Education Initiatives: By delivering community-based nutrition education activities and building on existing activities to increase access to healthy food (Delivered by Indigenous Services Canada and the Public Health Agency of Canada).
• Nutrition North Canada's programming activities are guided by regular dialogue with Indigenous and Northern program partners, including its Advisory Board to the Minister, the Indigenous Working Group; the Inuit-Crown Food Security Working Group; Harvesters Support Grant and Community Food Security Fund recipients; and food bank networks.
• At a time of global food price inflation, it is more important than ever that this support be there. To further advance food security and affordability in the North, Budget 2024 proposes to provide:
  • $23.2 million in 2024-25 for Nutrition North Canada's subsidy program to lower the cost of nutritious food and other essential household items and
  • $101.1 million over three years starting in 2024-25 to support the Harvesters Support Grant and Community Food Programs Fund, which enables Indigenous communities in implementing culturally appropriate and local solutions.

Current Status

• Nutrition North Canada continues to work with partners and communities to improve the subsidy program as part of a larger suite of programs aimed at addressing food insecurity in the North and Arctic.
• Co-developed additions, such as the Harvesters Support Grant, are important enhancements in efforts to improve food security by creating less reliance on store-bought food and supporting culturally relevant harvesting and food-sharing practices. They mark a fundamental shift by empowering communities to take action on their own food security priorities. Recent expansions to the subsidy program have opened the door to bringing a greater number of small local retailers and local food producers into the program. It has also allowed food banks and registered charities to join the program and subsidize donated food and essential items at a flat rate of $3 per kilogram.
• Since December 2022, three food banks have been registered with the program. Nutrition North Canada continues to work with Indigenous organizations and not-for-profit partners to expand this network.
• While the subsidy has managed to lower certain prices and increase the volume of eligible food and essential items being shipped to communities, more work is needed to optimize the subsidy for Northerners to ensure 100 percent of the subsidy is passed on directly to consumers.
• The newly established Food Security Research Grant is supporting Indigenous-led research on food access and the high costs of living in the North.
• Grant recipients at the University of Toronto are currently working in collaboration with the community of Taloyoak, Nunavut, for example, to understand and share their own experiences with food sufficiency, security and affordability.
• The results of these research projects, combined with ongoing dialogue with communities and program partners, will be key to informing improvements to the subsidy, including overall pass-through and accountability measures.

Key Messages

• Through its expanded program, Nutrition North Canada (NNC) works directly with Indigenous and northern partners to understand and address their food security priorities. One of the ways Nutrition North Canada supports residents in eligible northern isolated communities is by subsidizing a list of foods and essential items flown in by air, and brought in by seasonal sealift, barge or winter road.
• The subsidy is applied against the total cost of an eligible product (including product purchasing cost, transportation, insurance and overhead) shipped by air, ice road, sealift, or barge to an eligible community. This means that the price paid for these items is lower than it would be otherwise.
• The subsidy program has been under scrutiny by northerners and academics who do not believe that the subsidy is being fully passed onto consumers, as food remains unaffordable.

Background

• Nutrition North Canada (NNC), and its predecessor Food Mail and Air Stage Programs, is the longest running and the sole consistent food security effort in the North.
• Traditionally, NNC's primary focus was not food security, but health and nutrition as a function of northern development.
• Responding to the needs of northerners, and to recommendations identified in the INAN Food Security in Northern Communities Report (2021) the program expanded its mandate through Budget 2021 to address food security more broadly.
• When the program started in 2011, the annual investment totalled $54 million. By 2023-2024, the annual investments had reached $188 million, including $145 million for the subsidy. The program is now experiencing unprecedented use by northerners.
• NNC's retail subsidy has helped to lower the prices of eligible food and essential items in isolated northern communities, while increasing the amount of perishable nutritious food available. The number of eligible communities has increased from 79 to 124.
• Between 2011 and March 2023, the average volume of eligible items shipped to northern isolated communities increased by approximately 106 percent. About 324.9 million kilograms of eligible items were subsidized, with an average increase of about 4.2 million kilograms annually.
• On August 15, 2022, the Government of Canada announced a significant step forward in addressing food security in the North. An investment of $163.4 million over three years from Budget 2021 expanded NNC's ability to help isolated communities address food security through a range of innovative solutions.
• This funding helped to improve and expand the retail subsidy program. This included expanding the program to food banks and registered charities allowing them to subsidize donated food and essential items at a flat rate of $3 per kg. This supports the flow of donated foods to isolated communities.
• Budget 2021 also extended eligibility for the subsidy to local food producers and increased supports for small, locally owned retailers to register for the program.
• NNC provides a subsidy on a list of nutritious eligible foods, as well as certain non-food items like diapers and non-prescription drugs, sold by registered retailers and suppliers. This list relies on direct input from Indigenous and community partners. It is dynamic, and periodically adjusted to best meet the needs of community members within the program budget. Eligible items include:
  • Fruits and vegetables
  • Grain products
  • Milk and alternatives
  • Meat and alternatives
  • Cooking oils/fats, baby formula, and essentials for baked goods
  • Essential non-food items
• Over the years, Based on consultations with Indigenous partners, the eligibility list was expanded to reflect what was being consumed by northerners. In 2020, the list was expanded again to include cleaning products and personal hygiene products.
• Subsidy rates have increased significantly since 2016. Key increases took place on the following dates:
  • October 1, 2016 – small increase to low and medium rates
  • January 1, 2019 – high rate added, small increase on medium rate ($0.15/kg - $0.60/kg)
  • April 1, 2020 – non-perishables non-food items made available for surface transport subsidy (~1$/kg)
  • May 1, 2020 – COVID-19 fixed rate increase (high $0.50/kg, medium $1.00/kg about 18% to 56%)
  • February 1, 2023 – Increase to medium subsidy (~3 – 5%) and low subsidy (~40%)

Current status

• In 2023-2024, expansions resulted in NNC onboarding 3 food banks onto its subsidy program, with 6 more underway. Nutrition North Canada continues to work with Indigenous partners and non-profit partners to expand the food banking network in the North, and develop a bulk buying model to provide further supports and options for northern residents.
• The inclusion of food banks in the subsidy program is already having an impact in several communities. As a result of this expansion, in the past year, more than 100,000 kilograms of free food has been shipped to eligible communities.
• The program is currently in conversation with various local producers across the north to register them for the subsidy.
• Since 2020, Nutrition North has actively collaborated with academics and provided support for studies investigating the rate of subsidy passthrough to consumers. NNC's ongoing engagement with academics reflect the program's commitment to improving accountability and delving deeper into the process behind how the subsidy is calculated for different communities.

Program-Level Data (if applicable)

Program / Investment: NNC Subsidy

Funding / Performance Indicator Data: $23.2M over 1 year, starting in 2024-2025

Key Messages

• The rise in food prices across Canada has posed a significant concern for Canadians who are worried about their ability to feed their families, heightened calls for transparency and accountability for major grocery retailers, and highlighted the need for greater oversight in the grocery sector.
• Since its launch in 2011, Nutrition North Canada (NNC) has committed to ensuring that its full retail subsidy is passed on to consumers.
• NNC works closely with northern partners to monitor results and seek input for ongoing improvements. It is committed to ensuring that its operations are fully transparent.

Background

• Under the NNC program, registered retailers and suppliers are responsible for managing their own supply chain and are accountable for passing the savings associated with the subsidy along to residents. The Nutrition North Canada retail subsidy is applied against the total cost of an eligible product (including product purchasing cost, transportation, insurance and overhead) shipped by air, ice road, sealift or barge to an eligible community.
• While retailers are obligated to apply the same subsidy rate, the base cost of items will vary, depending on the retailer's purchasing cost, transportation, insurance and overhead. The subsidy ensures that the price paid for an item is lower than it otherwise would be. In certain northern isolated communities, there is limited competition for retailers, which can have an effect on the pricing in these communities.
• Retailers and suppliers submit monthly claims outlining how many kilograms of eligible items they shipped to eligible communities. Claims are reviewed independently by an accredited third-party to ensure that the subsidy was applied correctly. Once a claim is reviewed, Nutrition North Canada reimburses the retailer or supplier for the amount recommended by the third party.
• Program recipients are audited regularly to ensure compliance with the terms and conditions stipulated in their funding agreements with the program.
• These compliance reviews are always conducted by independent auditors through a third-party corporation, which reports their findings to the program.
• Since 2011, third party auditors have conducted over 60 compliance reviews. A summary of these reviews are publicly available on the program's website.

Current Status

• The Department's Evaluation Branch is undertaking the evaluation in partnership with Indigenous partners, communities and other departments and it will include engagement at the community level. The purpose of the evaluation is to assess the design, delivery, relevance, and performance of the expanded elements of the program as well as to review the subsidy.
• Transparency and accountability mechanisms are a common thread in these audits and evaluations, and this exercise will assess the design, delivery, relevance and performance of the subsidy, including its pass through.
• To further improve transparency and accountability measures, NNC has five ongoing Indigenous-led research projects, as part of the Food Security Research Grant, that are examining the retail subsidy and will deliver options to further improve subsidy operations, strengthen transparency, and improve accountability mechanisms.
• While results from the Food Security Research Grant and evaluation are pending to inform ongoing improvements to Nutrition North Canada, an engagement period is occurring to broker open dialogue on the program and demonstrate a commitment to continuous improvement.
• NNC also consults regularly with Indigenous partners, including Inuit Tapiriit Kanatami and Inuit Food Security Working Group members to solicit their views and recommendations for improving compliance, auditing and transparency. With support from ITK, a contracted study of NNC Subsidy Passthrough & the Design of Strengthened Accountability Measures is being undertaken, to be completed in Fall 2024.

Key Messages

• Nutrition North Canada is committed to meeting its food security mandate and continuous improvement. This is why in 2021, the department launched the Food Security Research Grant with an investment of $1.5 million from Budget 2021.
• There are five ongoing Indigenous-led research projects funded under the Grant, that are undertaking an examination of the subsidy and will provide recommendations on how to make it work better for the people it intends to serve.
• Two additional projects on subsidy pass-through and retailer accountability measures are being undertaken by Wilfred Laurier University and York University. The program is eagerly waiting for the initial findings from these projects and the five grant projects to leverage improvements to the subsidy program. Looking ahead, Nutrition North is continuing to work with its partners and hear from northerners to continuously improve the program and make it work better for northerners.

Background

• There has long been a disconnect between the NNC retail subsidy program performance measures and feedback from community members, northern and Indigenous partners, and academics, who continue to raise concerns that nutritious food remains unaffordable for most and that the prevalence and severity of food insecurity in NNC communities are several times higher than the prevalence of food insecurity in the rest of Canada.
• As identified in the INAN Standing Committee government response, the goal of NNC's research activities is to generate information to substantively improve the program through the potential redesign of the subsidy model.
• This approach casts a Gender-Based Analysis Plus (GBA Plus) lens on the experiences of different groups (e.g., low-income households, women, etc.) in accessing subsidy benefits, telling the unique story of remote communities supported by academic rigor and analysis. This approach places Indigenous, isolated communities in a leadership role to create solutions to northern food insecurity.
• A project on subsidy pass-through is underway and being led by a professor at Wilfred Laurier University. This project seeks to answer what perfect pass-through of the subsidy would look like and how to design the program with this goal in mind. This project will also develop options for how to improve the subsidy in the short term and look at supply chain management for northern communities.
• Late in 2022-2023, five agreements were signed with successful Food Security Research Grant applicants, totalling $1.25M. The research projects are being carried out by:
  • Kikenomaga Kikenjigewen Employment and Training Services (KKETS)
  • Sambaa K'e First Nation
  • Nishnawbe Aski Nation (NAN)
  • Laval University, in collaboration with the Inuvialuit Regional Corporation
  • Governing Council of the University of Toronto in collaboration with Taloyoak, Nunavut, and Whati, Northwest Territories
• A professor at York University has also been contracted by the program to develop a methodology for determining the pass-through of the subsidy, as well as to work closely with the program's third-party auditors to address gaps and provide recommendations on how to improve the program's accountability and transparency measures.

Current Status

• Despite challenges due to the wildfires last summer, work is well underway for NNC's Food Security Research Grant recipients and results are expected throughout the 2024/2025 fiscal year. These results will inform ongoing improvements to the retail subsidy program, including subsidy pass-through, accountability measures and transparency of the program.
• Results from the additional two research projects are expected by Fall 2024.
• Policy recommendations and options for improving the retail subsidy program are expected as early as the fall of 2024.

Program-Level Data (if applicable)

Program / Investment: Research grant

Funding / Performance Indicator Data

• Budget 2021 NNC received $1.5 million over five years
• Budget 2024 NNC received an additional $2.3 million to carry out over three years

If pressed on CanNor support for the food sector

• Through its NICI Fund, CanNor facilitated the Northern Food Innovation Challenge to support innovative, locally-driven projects for Indigenous and community food production systems.
• In February, four Phase 2 proponents, who each received up to $1M to advance their initiatives, presented at the NFIC Innovation Showcase held at the Globe Forum, one of North America's premier events for leaders advancing a regenerative and equitable economy. This successful event concluded the Challenge program.
• CanNor can also support the territorial food sector through its flagship IDEANorth program; for example the agency recently invested $235,000 to support a food centre in Iqaluit, Nunavut for renovations and equipment purchases to transform an existing space in its facility to become a bulk food and dry goods store available to all Iqaluit residents.

If pressed on NFIC Phase 2 Recipients

• $1M was provided to the Ilisaqsivik Society in Clyde River, Nunavut to support the employment of hunter-instructors to provide traditional country food year-round to elders, children, families, and other community members.
• The Qajuqturvik Community Food Centre in Iqaluit, Nunavut received $400,000 to support their country food subscription box service; the additional funding supports increased capacity for food processing.
• $750,000 was provided to the Fort Simpson Métis Development Corporation in the Northwest Territories to support their initiative to develop a local bison processing facility.
• CanNor also provided nearly $850,000 to the Yukon First Nation Education Directorate to support design work for a centralized teaching and traditional local processing kitchen.

Recent News Releases

• In December, 2023, CanNor announced the successful Phase 2 participants of the Northern Food Innovation Challenge Phase. These four projects presented at the 2024 Globe Forum at the NFIC Innovation Showcase, which officially concluded the challenge.
• In December, CanNor also announced $600,000 to the Tłı̨chǫ Investment Corporation to help with construction of Wekweètì's new grocery store.