The federal government has no idea if the full value of the subsidy it gives to grocery stores in remote communities is being passed on to customers, Canada’s auditor general has found.
The program replaced the earlier Food Mail program in 2011. Old Crow is the only Yukon community that benefits from the subsidy.
Under the old program residents could ship up food through Canada Post at subsidized rates.
With Nutrition North, the subsidy is funnelled through retailers, who promise to pass on savings to customers.
But Aboriginal Affairs and Northern Development Canada isn’t collecting enough information to be sure that the grocery stores are following through on that promise, according to the report.
Although the department does collect price data, it has no information about profit margins, and how they may have changed over time.
The department also does not have enough data to know if prices on non-subsidized items have changed in response to the subsidy, the auditor general found.
This comes as no surprise to the community of Old Crow, said Vuntut Gwitchin MLA Darius Elias.
“It just verifies what we in Old Crow have been living with for a number of years. There’s basically nothing new in there,” he said in an interview Tuesday.
“My constituents recognized that right on April 1, 2011. We recognized that right away.
“My constituents did not feel that the full subsidy was being passed down to them when they purchased it in Old Crow.”
Aboriginal Affairs has agreed to all of the auditor general’s recommendations, including to collect profit margin data in the future.
Old Crow is fairly unique in the North. It is the only community that doesn’t have road or barge access at least once a year.
The federal government has recognized this and widened the list of products eligible for the subsidy in Old Crow, including items with a longer shelf life that residents of other remote communities stock up on when freight prices are low.
Old Crow also successfully lobbied for a continued subsidy on personal food shipments flown from Whitehorse.
But the prices for that are more than double what they were under Food Mail, Elias said.
A shipment of 50 kilograms of healthy, perishable food costs him $96 in shipping today, compared with $41 a few years ago, he said.
Still, that continued shipping subsidy has proven useful. Today, there is no grocery store in Old Crow.
The Northern store closed a couple of weeks ago, anticipating a new co-operative store that was planned to be built this summer but now is not scheduled to open until the spring.
The community planned the new co-op because of the issues with getting healthy, affordable food into the community, said Elias.
“My constituents, in their great leadership, have given the direction to myself and to the Vuntut Gwitchin chief and council to not harp on the problem. And so we sought to fix this issue.”
The building materials for the store came in on the winter road that was open to the community for a few weeks this past winter, paid for jointly by the First Nation and the Yukon government.
Now that there is no store, getting food in is difficult but not impossible, said Elias.
Residents are getting together to order in bulk and save on freight, he said.
The main issues are having access to a credit card to pay for food remotely, and getting the food to Air North at the airport for shipping, he said.
But people are helping each other out and making it work, said Elias.
It’s hard to say how much more food is costing community members now that the store is closed, he said.
The community is working on a plan to occupy the former Northern store space as a stop-gap measure until the new building is ready.
That could happen soon, said Elias.
“People are managing right now, but it is very difficult.”
Contact Jacqueline Ronson at