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A Nunavut MLA says that since Ottawa changed the Northern Food Subsidy Program, prices have all changed. (Ron Elliott for The Globe and Mail/Ron Elliott for The Globe and Mail)
A Nunavut MLA says that since Ottawa changed the Northern Food Subsidy Program, prices have all changed. (Ron Elliott for The Globe and Mail/Ron Elliott for The Globe and Mail)

In face of outcry, Ottawa relents on new food-subsidy program for the far north Add to ...

Faced with a public outcry over recent spikes in the price of food in remote northern communities, the federal government is blaming retailers and backing off on planned changes to its northern food subsidy program.

The 11th-hour move will cost Ottawa between $15-million and $20-million, and will relist certain foods and household items for which subsidies expired in the fall.

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An unpopular new program was supposed to kick in next month, when some retailers planned to simply stop participating due to excessive cost and administration work. Dubbed Nutrition North, it will now be put off until October, 2012.

Nunavut MP and Health Minister Leona Aglukkaq made the announcement in Iqaluit Wednesday, after weeks of outcry and debate over the skyrocketing prices in stores across the North. She insisted her government "listened to northerners" in deciding to delay the new program and "is committed to bringing fresh, healthy food to northern homes."

Ms. Aglukkaq, who narrowly won her seat and could face a tough three-way race if a spring election is called, repeatedly declined comment on the political implications of the move.

The new date will allow for two more summer seasons of cheap sea shipping, giving retailers time to adjust and even build extra warehouses, she said.

"If retailers planned accordingly and shipped on sea lift, we would not be seeing those outrageous prices in our stores [now]" Ms. Aglukkaq said.

She was joined by Indian Affairs and Northern Development Minister John Duncan, who acknowledged the federal government had fumbled the transition from the old Food Mail program, which provided a small subsidy to many foods and products, to the new Nutrition North program, which targets subsidies towards healthy foods.

"The implementation period was overly aggressive," Mr. Duncan said, adding: "We've discovered as government that when we make significant change, it can be a challenge. In this case, we have said we will listen. We will make sure northerners have access to nutritious, affordable food."

The cheapest way to get food to the remote North is by ship, and deliveries can only take place in the summer. Subsidized food that was shipped cheaply last summer began to run out, and unsubsidized food started arriving on shelves earlier this year.

Brought in by plane, the food carried staggering prices - $27.79 for margarine, $8.29 for four tomatoes, $38.99 for Cranberry cocktail juice and $19.49 for Cracker Barrel cheese.

Ronald Elliott, a Nunavut MLA who raised many of the complaints to Ms. Aglukkaq, praised the changes.

"They've made significant changes," he said. "Mind you, I don't think we're out of the woods yet. This is an example of how empowerment can happen when people work together to push forward an issue."

The list of items that had been removed, but will now be subsidized for another 18 months, is long, and includes food many wouldn't consider particularly unhealthy. Dry pasta, coffee cream, canned meats, margarine, canned soup and coffee will all be subsidized again.

Mr. Duncan hopes retailers will use the extra time to plan larger summer barge shipments of that food, to be prepared when the new program kicks in, once and for all, in late 2012.

The move will also relist personal care items, such as diapers, feminine hygiene products, toothpaste and toilet paper, for which the subsidy had been cancelled.

A committee designing Nutrition North remains in place and will consider changing the new funding model and adding foods.

The new program, which has roughly the same budget as the old one, subsidizes the air freight for priority items, such as fresh meat, eggs and fruit, by about 90 per cent, down to 80 cents per kilogram. The subsidized cost is still double the unsubsidized rate of barge shipping.

"Our government is continuing to explore additional options to assist retailers to adjust their supply chain to fit the new program," Mr. Duncan said.

Follow on Twitter: @josh_wingrove

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