How Nutrition North Canada works

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What is Nutrition North Canada?

Nutrition North Canada (NNC) is a Government of Canada subsidy program launched on April 1, 2011 to bring healthy food to isolated Northern communities. NNC works with stores across the North and food suppliers in southern Canada to help make perishable, nutritious food more affordable and more accessible.

NNC subsidizes:

Customers in eligible communities can purchase subsidized food from registered Northern retailers or directly from registered Southern suppliers.

NNC is based on a market-driven model which promotes efficiency, cost-effectiveness and transparency. It provides a subsidy for the high cost of stocking and/or shipping perishable nutritious food in the North. The subsidy is provided to retailers and suppliers that apply, and are selected, to register with the program. In turn, these businesses are responsible for passing on the full subsidy to consumers. Indigenous and Northern Affairs Canada (INAC) closely monitors compliance and publishes regular compliance reviews to ensure transparency.

Northerners benefit from the subsidy when they buy subsidized items from retailers in their community. Individuals, commercial establishments such as local restaurants, and social institutions such as daycares, can also benefit from the subsidy when they order eligible items directly from registered Southern suppliers.

Budget

Starting in 2011, the Government of Canada has invested about $60 million in the program each year, including $2.9 million for community-based nutrition education through Health Canada. On November 21, 2014, the Government of Canada announced an increase of $11.3 million to the NNC subsidy budget for 2014-2015; and a new 5 percent annual compound escalator for the food subsidy budget to help it keep pace with the growing demand for perishable nutritious food in the north.

In October 2016, NNC expanded to include 37 more isolated northern communities. This is part of the Budget 2016 commitment to provide an additional $64.5 million over five years, with $13.8 million per year allocated to expanding the program to support all Northern isolated communities. This also includes $4.7 million per year for community-based nutrition education initiatives.

The results are clear – NNC has succeeded in reducing food prices on eligible items. Between April 2011 and March 2015, the cost of a food basket for a family of four has dropped approximately 5 percent or $94 per month. Also, the weight of eligible items shipped to northern isolated communities increased by approximately 25 percent between 2011 and 2016. Results also indicate that nutrition education initiatives funded by Health Canada and the Public Health Agency of Canada have been effective in increasing knowledge of healthy eating and improving skills to choose and prepare nutritious foods.

How the subsidy works

To help reduce the cost of perishable nutritious food in eligible isolated, northern communities, NNC provides subsidies directly to registered Northern retailers, Southern suppliers, and Country food processors/distributors, who must apply, meet the program's requirements and enter into agreements with Indigenous and Northern Affairs Canada (INAC), and are accountable for passing on the full subsidy to consumers by reducing the price of subsidized food.

The retail subsidies are applied against the total cost of an eligible product (including product purchasing cost, transportation, insurance and overhead) shipped by air to an eligible community.

The subsidy rate in each community is determined through four criteria that are most important in affecting the price of food:

The amount of the subsidy on food items is calculated using this formula:

subsidy level ($/kg) × weight of eligible item (kg) = $ subsidy payment

Sample point-of-sale in-store receipt

In order to further increase transparency, the implementation of a point-of-sale system became mandatory for NNC retailers across the North on April 1, 2016. This new system provides greater transparency and accountability by ensuring that customers can clearly see, on their grocery receipt, how and when the NNC subsidy is applied when shopping in registered NNC retailers.

La Fédération des coopératives du Nouveau-Quebec (FCNQ), which operates 14 cooperatives in Nunavik, Quebec, as well as Stanton Group LTD, has voluntarily implemented a point-of-sale in-store system.

Watch a video about Nutrition North Canada’s point-of-sale system

Nutrition North Canada Receipt
Description of image : Receipt from Salluit Cooperative Association

The image is of a receipt from Salluit Cooperative Association, Salluit, QC, which includes the money saved through the NNC subsidy for each item purchased by the consumer. Items were purchased on March 27, 2015.

  • Consumer purchased Selection orient (frozen vegetables) at $5.89, saving $3.98 through NNC subsidy;
  • consumer purchased Selection apples at $6.19, saving $11.47 through NNC subsidy;
  • consumer purchased Post Cereal at $6.89, saving $2.55 through NNC subsidy;
  • consumer purchased jalapeno peppers at $3.99, saving $0.91 through NNC subsidy;
  • consumer purchased raspberries at $4.79 saving $1.18 through NNC subsidy;
  • consumer purchased Maple Leaf regular meat at $11.59, saving$1.27 through NNC subsidy;
  • consumer purchased Selection oranges at $2.79, saving $3.65 through NNC subsidy;
  • consumer purchased Natrel Ultra Tab (Cream) at $6.09, saving $1.61 through NNC subsidy;
  • The Subtotal came to $48.22 but with tax at $0.48, the total came to $48.70. The customer shopped at Store #1, was served at Station #21 and was helped by Cashier #3. The cashier was FCNQ.

The Nutrition North Canada Program saved the customer $26.63 on his/her purchases. Nutrition North Canada Subsidy has 2 levels: Level 1 being $5.20/Kg and level 2 being $3.40/Kg. The original receipt is required within 30 days for a refund.

Levels of subsidies

There are two levels of subsidies for perishable nutritious food and one level for country food.

For perishable food, the level 1 (high) subsidy rate applies to the most nutritious perishable food. The level 2 (low) subsidy rate applies to other staple food items.

For country food, there is only one subsidy rate but it varies according to the location of the country food processor/distributor and the eligible community.

The program has a subsidy budget of $80.6 million for 2016-2017. Subsidy rates are set to allocate this amount fairly and equitably among eligible communities. As a result, subsidy rates differ from one community to another.

To set the subsidy rates, the program considers retailers' shipping costs, the weight of eligible goods they anticipate shipping by plane throughout the year as well as the number of eligible communities. Subsidy rates are reviewed periodically and may be adjusted during the year.

Find subsidy rates for perishable food for eligible communities.

Find subsidy rates for country food for eligible communities.

Direct (sometimes called personal) orders

If a customer (in an eligible community) wishes to purchase perishable nutritious food directly from a Southern supplier instead of a Northern retailer, they can place a direct order. These are a useful option for individuals, schools, restaurants and even small retailers. This option helps preserve competition among Northern retailers and provides consumers with flexibility related to special dietary needs.

To place a direct order:

Suppliers must pass on the subsidy to their customers. Your savings will be printed on your invoice.

Compliance reviews

NNC is committed to ensuring that its operations are transparent. Each year, a sample of Northern retailers and Southern suppliers are chosen to undergo a compliance review. This process can help determine whether they are complying with the terms and conditions of the funding agreement they signed with Indigenous and Northern Affairs Canada (INAC) and are transferring the subsidy to customers. The compliance reviews are conducted by an independent third-party, not federal government employees. The reviews are posted online and available in the reports section.

The retailer or supplier is made aware during the review if any business practices or processes do not comply with their funding agreement. They may develop a solution on their own, or the reviewer may recommend specific changes to correct the situation. INAC provides recommendations to the retailers or suppliers by letter and they are required to respond with proof that they have implemented a solution. Beginning with the 2013-2014 reviews, these letters are also available online in the status section of each compliance review. If the retailer or supplier continues to be non-compliant, the funding agreement can be terminated. This is a last resort option, and INAC will work with the retailer or supplier to fix issues where possible to allow Northerners as much choice as possible.

Shoppers who are concerned about the cost of food items are encouraged to contact their local retailer or direct order provider. If you are not satisfied with the response, you can contact their head office. If it is a cooperative, another option is to become a member of the board.

Registered Country food processors/distributors

Glossary of terms

Definitions for the terms used in the Nutrition North Canada program and on these web pages.

Commercially prepared food
Food that is prepared and distributed by food manufacturers, and that individuals typically buy in a store. This food can be fresh, frozen, raw or cooked and is usually pre-packaged.
Country food
Food obtained through local hunting, fishing or harvesting. Examples include caribou, ptarmigan, seal, Arctic char, shellfish and berries.
Country food processors/distributors
Government-regulated establishments that produce country food approved for export and are located in a community eligible for a subsidy under the program.
Direct orders
Individuals and certain institutions (for example, schools and daycares) in eligible communities are able to buy eligible subsidized items directly from a supplier in the South that is registered with the program and offers this service. Direct orders are often referred to as personal orders.
Eligible communities
Communities eligible for food subsidies. These communities lack year-round surface transportation.
Eligible food
Lists of the types of food which are eligible for a subsidy.
Non-food items
Items that are also eligible for a subsidy. For example, in all eligible communities, non-prescription drugs are subsidized. In Old Crow, Yukon, which rarely has access to surface transportation at any time of the year, other non-food items such as diapers, toilet paper and toothpaste are also subsidized.
Non-perishable food
Food which does not spoil quickly when stored at room temperature and has a shelf-life of more than one year. Examples include dry pasta, dehydrated vegetables and canned fruit.
Northern retailers
Retailers who operate stores located in eligible communities and who sell eligible food. These retailers are registered as a business with the Canada Revenue Agency and have a contribution agreement with INAC to govern the funds (the subsidy) they receive under the program.
Perishable food
Food that spoils quickly especially if it is not stored at the proper temperature. Perishable food can be fresh or frozen or have a shelf-life of less than one year. Examples include meat, milk, bread, fresh vegetables and frozen fruit.
Personal orders
See Direct orders.
Retail subsidy
An amount of money that the federal government transfers to registered northern retailers and southern suppliers in the program to help reduce the cost of perishable nutritious food in eligible isolated, northern communities. See How the subsidy works for more information.
Revised Northern Food Basket
A list of 67 food items and quantities required to nutritiously feed a family of four for one week. See Revised Northern Food Basket section for more information.
Southern suppliers
Retailers and wholesalers who operate a business located in Canada but not in a community eligible for the program and who sell food that is eligible under the program. They are registered as a business with the Canada Revenue Agency and have a contribution agreement with INAC to govern the funds (the subsidy) they receive under the program. Southern suppliers provide eligible products to small northern retailers, eligible institutions, establishments and individuals living in an eligible community.
Surface transportation
Access to permanent road, rail or marine service.
Traditional food
See country food.
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