Contributions to Support Access to Healthy Foods in Isolated Northern Communities

On this page

• 1.0 Introduction
• 2.0 Legal and Policy Authority
• 3.0 Purpose, Program Objectives and Expected Results
• 4.0 Eligibility
• 5.0 Type and Nature of Eligible Expenditures
• 6.0 Total Canadian Government Funding and Stacking Limits
• 7.0 Method for Determining the Amount of Funding
• 8.0 Maximum Amount Payable
• 9.0 Basis on which payments will be made
• 10.0 Application Requirements and Assessment Criteria
• 11.0 Due Diligence and Reporting for Large Retailers
• 12.0 Due Diligence and Reporting for Small Local Retailers and Local Growers
• 13.0 Due Diligence and Reporting for Food Banks and other Food Distribution Charities
• 14.0 Nutrition North Canada Program Oversight
• 15.0 Official Languages
• 16.0 Intellectual Property
• 17.0 Repayable Contributions
• 18.0 Redistribution of Contributions
• 19.0 Other Terms and Conditions
• 20.0 Effective Date of Terms and Conditions

1.0 Introduction

Many communities across Canada's 3 territories, as well as the northern parts of some provinces, are accessible only by air for part of, or all of, the year. Residents of these isolated communities are predominately Inuit and First Nations, with a smaller Metis and non-Indigenous population. The cost of living and doing business in these isolated communities is higher than in more southern regions. Necessities such as perishable food must be flown into these communities. Electricity, maintenance and food storage costs are higher for stores and affect the prices of food on store shelves. Coupled with low household incomes and socio-economic disparities when compared to southern counterparts, the amount northern families have to spend on food is considerably higher, contributing to high rates of food insecurity. These higher prices make it more difficult for Northerners to afford a nutritious diet from store bought foods. Therefore, in order to alleviate the costs of nutritious, perishable foods purchased in isolated communities and to encourage nutritious eating, the Government of Canada implemented the Nutrition North Canada Program on April 1, 2011.

The objective of Nutrition North Canada is to support northern residents and their families who live in northern isolated communities make healthy food choices. Improving access to healthy foods through nutrition education and subsidies helps alleviate the cost of food in isolated communities, thus contributing to strengthening isolated northern communities' nutritional choices and communities' health and well-being.

Registered retailers in the North, country food processors/distributors located in eligible communities, and food suppliers supplying small retailers, small retailers purchasing from non-registered suppliers, eligible institutions and individuals in these isolated communities, all are entities that can apply for a subsidy based on the weight of eligible foods shipped to eligible northern communities. These subsidies are to be fully passed on to northern consumers by appropriate reductions in the selling prices of eligible foods.

Local Food Growers/Producers, such as greenhouses and similar agricultural producers located in eligible communities can apply for subsidies based on the weight of eligible products produced and sold or distributed within their local communities. These subsidies are to be passed on to northern consumers in eligible communities through appropriate reductions in selling prices of eligible products where they are offered for sale.

Subsidy claims shall be supported by approved documentation supplied by the recipients. Regular reporting and monitoring of food prices ensure that the subsidy is being fully passed on to consumers.

2.0 Legal and Policy Authority

The program is provided under the following authorities:

• Crown-Indigenous Relations and Northern Affairs Act, S.C. 2019, c. 29, s. 337
• In its 2018 Fall Economic Statement, the Government of Canada announced "To ensure that Northern families have access to affordable, healthy food, including local food, the Government proposes to invest $62.6 million over five years starting in 2019–20, with $10.4 million ongoing, in the Nutrition North Canada Program. This investment would help to support several Program changes, informed by consultations with Northerners, and to introduce a Harvesters Support Grant to support Indigenous harvesters to engage in traditional hunting and harvesting activities and to support communities in distributing the harvest through food sharing mechanisms."
• Budget 2021 proposed to provide $163.4 million over three years, starting in 2021-22, to expand the Nutrition North Canada program and enable the Minister of Northern Affairs to work directly with Indigenous partners, including in Inuit Nunangat, to address food insecurity

3.0 Purpose, Program Objectives and Expected Results

The purpose of the program is to support northern residents and their families who live in northern isolated communities make healthy food choices by subsidizing the cost of healthy, perishable foods, and on exception basis, non-perishable foods and essential non-food items, that are shipped to isolated northern communities without year-round marine or land access. Food security is a key element of Canada's Northern Strategy to help the North realize its true potential as a healthy, prosperous and secure region within a strong and sovereign Canada. The program will contribute to the department's strategic outcome: The North, The people of the North are self-reliant, healthy, skilled and live in prosperous communities and to the Government of Canada outcome: Healthy Canadians.

Nutrition through healthy food is a key health factor. The objective of the Nutrition North Canada retail subsidy program is to help make perishable, nutritious food more accessible and more affordable^{Footnote 1} than it otherwise would be to residents of eligible isolated northern communities without year-round surface (road, rail or marine) access. Northern communities that have surface access (such as winter roads) but experience prolonged periods of isolation (more than 4 weeks at a time) during freeze up and break up seasons are eligible to the Nutrition North Canada retail subsidy on a seasonal basis, whereby items flown into the community during isolation periods receive a subsidy.

Eligible northern communities benefit from improved access^{Footnote 2} to healthy food. By making nutritious foods and other essential items more accessible and affordable, the program seeks to increase healthy consumption and support the needs of northern families, in order to contribute to better overall health of the population, both Indigenous and non-Indigenous.

While there has been a major transition from the consumption of traditional northern foods (country foods) to southern market foods, the program also seeks to support the access to country foods (such as Arctic char, caribou, muskox) harvested in eligible northern communities.

Since price is not the only factor that influences buying habits, the program is supported by the First Nations and Inuit Health Branch-ISC and Public Health Agency of Canada through the delivery of initiatives that encourage the purchase, preparation and consumption of healthy foods and overall knowledge of healthy eating.

It is expected that the retail subsidy will help lower the prices of nutritious foods in the North. In combination with complementary health education activities, it is expected that the purchase of these foods will increase in the short and mid-term, and that in the longer term, more individuals living in eligible communities are expected to adopt healthier eating patterns which can contributes to decreases in the rates of chronic and infectious diseases. The key performance indicators for the retail subsidy program are: trend in Revised Northern Food Basket (RNFB) prices, weight of eligible food shipped, level of awareness of the program and its subsidy, and changes in levels of awareness of healthy behaviours, affordability (the public indicator).

4.0 Eligibility

The Nutrition North Canada retail-based subsidy is available to the following 6 categories of recipients:

Large Northern Retailers

Retailers who operate more than 3 stores located in eligible communities where eligible items are available for purchase and who possess a business number with the Canada Revenue Agency, and who agree to the terms and conditions of the contribution agreements.

Small Local Retailers

Retailers, located in eligible communities, owned and operated by the local government or a resident of the community with the approval of the local government as a sole proprietor or incorporated body (and which may not possess a business number with the Canada Revenue Agency), as recommended by that local government in a letter to the department, and who agree to the terms and conditions of the contribution agreements. Where the retailer operates in the same community as a Large Northern Retailer, where the retail store is locally owned and operated, it may be subject to different due diligence requirements as detailed below.

Registered Suppliers

Retailers, wholesalers and distributors who operate a business located within Canada excluding the eligible communities where eligible items are available for purchase, who possess a business number with the Canada Revenue Agency, who meet the Program's selection criteria as set by the Department, who supply small northern retailers, and eligible social institutions (such schools and daycares) and individuals (through direct/personal orders), and who agree to the terms and conditions of the contribution agreements.

Charitable Organizations

Southern food bank networks which ship eligible items to communities for the purpose of distribution to the vulnerable population without sale or profit, which are registered as charities by the Canada Revenue Agency, and which agree to the terms and conditions of contribution agreements, may be eligible for subsidy.

Northern Country Food Processors/Distributors

All country food processors/distributors located in eligible communities who meet the program's selection criteria as set by the department and who agree to the terms and conditions of the contribution agreements may be eligible for the contribution (subsidy).

Local Producers/Growers

Greenhouses, and other growing facilities located in isolated communities created with the intent of providing fresh fruit and/or vegetables to the local population (through sales or free distribution), with or without corporate status, where they are recommended by the local government in a letter to the Department and agree to the terms and conditions of the contribution agreements may be eligible for the contribution (subsidy). Where the grower/producer is locally owned and operated, it may be subject to different due diligence requirements as detailed below.

5.0 Type and Nature of Eligible Expenditures

The contribution payments shall be based on the weight of eligible items shipped to eligible communities. The weight of eligible items includes packaging.

Eligible items fall into 2 categories, perishable items and non-perishable/staple items. Certain non-perishable and staple items are subject to an expanded subsidy which includes subsidies for surface transport in addition to a shipped by air subsidy.

Lists of eligible items within each category, and eligible communities are maintained by CIRNAC and posted on the departmental website. These lists are evergreen and are subject to change periodically.

A schedule of subsidy rates per kilogram per community is maintained by CIRNAC and posted on the departmental website. Subsidy rates vary by community and by category of eligible items.

For Charitable Organizations (such as food banks), the subsidy allocation is based on the shipping costs of food items to eligible communities, which will be distributed at no cost to vulnerable populations. Similarly, for Local Growers/Producers that choose to distribute food for free in eligible communities, the subsidy allocation will be based on a special rate based on total kilograms distributed.

Recipients are entitled to claim an administration fee for their incremental costs to meet the requirements of the contribution agreement such as claims processing, marketing, reporting and audit. This fee can either be a fixed annual amount or a percentage of claimed subsidy amounts to be negotiated between the recipient and the department and identified in the contribution agreement.

6.0 Total Canadian Government Funding and Stacking Limits

Maximum funding by CIRNAC and total maximum government assistance is 100% of eligible items cost.

The amount of contribution payable to recipients for each kilogram of eligible items shipped in each category is based on a subsidy rate schedule determined by the department. These rates vary by community to account for differences in transportation and operational cost for each eligible community. The percentage of the cost of eligible foods subsidized by the federal government will therefore vary by community.

7.0 Method for Determining the Amount of Funding

The calculation of the contribution payment will be based on the weight of eligible goods shipped to eligible communities. Amounts will be determined by the number of kilograms of eligible items shipped multiplied by the subsidy rates applicable to the categories of items shipped for the destination community. Weights will be derived from information on supporting documentation to be provided by the recipients. The amount payable to each recipient will be based on actual demand for and shipments of eligible items in each of the categories.

For local food producers/growers, calculation of the contribution payment will be based on the weight of eligible food distributed at no cost or available for sale within eligible communities. Amounts will be determined by the number of kilograms of eligible items available for sale or distribution multiplied by the subsidy rates applicable to the categories of items made available to the local community. Weights will be derived from information on supporting documentation to be provided by the recipients. For foods shipped to other eligible communities, the methodology described above shall apply.

8.0 Maximum Amount Payable

The maximum annual amount payable to any recipient will not exceed $108,771,933 plus the program's annual 5% compound escalator.

The schedule of subsidy rates will be adjusted annually, if required, to provide relative equity of food prices between communities, while remaining within program funding limits. Adjustments to subsidy rates will be based on forecasted demand by community as per past program usage patterns and in keeping with the Program Sustainability Strategy. These patterns will become more and more predictable as the new program and the new list of eligible items become more familiar to northern retailers and consumers.

9.0 Basis on which payments will be made

Recipients shall submit subsidy claims on a monthly or quarterly basis as per the terms of the contribution agreement. The claims shall include detailed shipment information as set out in the contribution agreement and be supported by the required documentation such as invoices and waybills.

The department may provide monthly advance payments to recipients based on monthly shipment weight forecasts as per past shipment information. Advanced payments shall only be negotiated where the recipient's information is up to date for the fiscal year immediately preceding the request.

Small Local Retailers claiming less than $15,000 in subsidy amounts per fiscal year, shall submit invoices and/or waybills for suppliers not previously registered with the program clearly marked to indicate items for which they claim the subsidy, along with yearly confirmation by a representative of the local government that the subsidy is passed on.

Local Food Producers/Growers shall submit records of weights and photographic evidence of food distributed or available for sale and for which the subsidy is claimed. Nutrition North Canada retains the right to contact a member of the local government for independent verification.

Charitable Organizations, such as food banks, shall submit waybills for items eligible for subsidy, as well as a list of items, by weight, for which they are claiming the subsidy along with the total shipping cost.

The claims shall be submitted to the department or its claims processing services provider who will verify their validity (such as eligible goods) and accuracy (such as proper subsidy rates applied). Reconciled claims accounts will form the basis for the payment to the recipient.

10.0 Application Requirements and Assessment Criteria

To be entitled to claim the subsidy under this program, recipients shall enter into a contribution agreement, having such form and content as the Minister considers necessary or appropriate, and comply with all requirements of the said agreement. These requirements include but are not limited to:

• using the most effective and cost-efficient supply chain arrangements and routes to reduce the price of foods as much as possible for consumers (except in the case of a Local Food Producer/Grower)
• passing on the subsidy to consumers and providing the assurance that the subsidy is passed on this includes maintaining an understandable pricing policy
• abiding by Program eligibility rules
• providing itemized shipment information in a pre-determined format
• providing itemized food prices as per a pre-determined schedule if requested by the program (charitable organizations exempted and suppliers are exempted)
• making the retail subsidy program visible and the subsidy transparent to consumers through on-receipt messages (Small Local Retailers are exempt from this requirement as they may not have a Point of Sale system in place), in-store signage and displays (Local Food Producers/Growers and Charitable Organizations exempted)
• providing access to their facilities and records for recipient audit purposes as required by the department

At the time of application:

• the potential northern retailer recipient shall provide the department with a list of stores they operate in eligible communities and a forecast of estimated monthly shipment weights by eligible community for the upcoming fiscal year
• Small Local Retailers that do not possess a Business Number with the Canada Revenue Agency shall provide the department with a letter of support from the local government or Band Administrator, indicating that they are operating with the support of the local government as well as an estimate of monthly volumes of eligible products to be sold
  
• local food producers/growers and greenhouses shall provide the department with a letter of support from a local government representative or Band Administrator, as well as an estimate of the seasonal volume of the operation intended for local sale or distribution
• local food producers shall submit a record of all sources of government funding (federal, provincial or territorial) received in the previous 5 fiscal years
• suppliers or northern country food processor/distributor recipient shall provide the department with a forecast of estimated monthly shipment weights by eligible community for the upcoming fiscal year and a list of their existing and/or anticipated clients in eligible communities
• food banks and other charities shall provide the department with a list of eligible communities to be serviced and an estimate of the monthly volumes and shipping costs associated with shipments to eligible communities over the upcoming year

11.0 Due Diligence and Reporting for Large Retailers

The funding arrangements with recipients shall be governed by individual contribution agreements specifying the recipient's responsibility to pass the subsidy on to consumers (transparency), to provide proof of the nature of shipments (accountability), to provide some visibility for the Program (through messages on customer receipts, in-store signage) to provide data on products shipped and their pricing and to provide self-inspection of eligibility and quality.

All retailers and suppliers must provide pre-subsidy pricing of all eligible items on a community-by-community basis.

All claims shall be submitted to the department or a claims processor contracted by the department who would verify their validity and accuracy and provide reconciled accounts to the department for processing the payment.

12.0 Due Diligence and Reporting for Small Local Retailers and Local Growers

The funding arrangements with recipients shall be governed by individual contribution agreements specifying the recipient's responsibility to pass the subsidy on to consumers (transparency) and to provide proof of the nature of shipments and/or production (accountability).

Small Local Retailers and Local Growers will be required to provide visibility for the program through in-facility signage, to provide data on products distributed or sold and to provide evidence of assurance by the local government that benefits are accruing to the community.

All claims shall be submitted to the department or a claims processor contracted by the department who will verify their validity and accuracy and provide reconciled accounts to the department for processing the payment.

During instances whereby Local Growers/Producers distribute food at no cost in eligible communities, their contribution agreements shall require that the recipient demonstrate evidence of foods distributed per weight and food category, and this evidence may be supported by the local government.

13.0 Due Diligence and Reporting for Food Banks and other Food Distribution Charities

Charitable organizations (such as food banks) shall be governed by individual contribution agreements outlining the recipient's responsibility to demonstrate delivery of eligible foods to eligible communities and its distribution without sale, the volumes of food in eligible categories, and an indication of any financial donations to be sent to communities for the purpose of local purchasing.

14.0 Nutrition North Canada Program Oversight

A Senior Executive Program Sustainability Oversight Committee will review financial information regarding program sustainability. The role of this committee will include monitoring the achievement of results, reviewing financial information regarding Program spending, reviewing the effectiveness of the sustainability strategy and providing strategic direction on policy and operational matters. Membership would include senior executives from CIRNAC, the Privy Council Office, Finance, Treasury Board Secretariat, Health Canada and Transport Canada. In addition, a formal external advisory board of key northern stakeholders (the Nutrition North Canada Advisory Board) will provide information and advice to the Minister to help guide the direction and activities of the program, and to ensure that northern residents receive its full benefits.

To assist with monitoring and reporting, the department will collect from recipients detailed information on shipments (such as weight of itemized content by pre-determined categories, destination community and, for southern suppliers, customer type) and retail pricing. In addition to providing the information presented above, recipients will be required to provide the department with a forecast of estimated monthly shipment weights by eligible community for the upcoming fiscal year.

As required by the Evaluation Policy and the Policy on Transfer Payments, a Performance Measurement Strategy (PM Strategy) assists the department in measuring the program's performance on an on-going basis. The PM Strategy includes a logic model and measurable outcomes and performance indicators to measure the progress in meeting the program's objective as set out in the program matrix in section 3.

15.0 Official Languages

Where a program supports activities that may be delivered to members of either official language community, access to services from the recipient will be provided in both official languages where there is significant demand and Part roman numeral 4IV of the Official Languages Act is applicable. In addition, the department will ensure that the design and the delivery of programs respect the obligations of the Government of Canada as set out in Part roman numeral 7VII of the Official Languages Act.

16.0 Intellectual Property

Where a contribution is provided for the development of material in which copyright subsists, conditions for shared rights will be set out in the funding agreement.

17.0 Repayable Contributions

Provisions for repayable contributions do not apply. Any contributions made to private firms under these programs are not intended to generate profits or to increase the value of a business.

18.0 Redistribution of Contributions

Where a recipient delegates authority or further distributes contribution funding to an agency or a third party (such as an authority, board, committee, or other entity authorized to act on behalf of the recipient), the recipient shall remain liable to the department for the performance of its obligations under the funding agreement. Neither the objectives of the programs and services nor the expectations of transparent, fair and equitable services shall be compromised by any delegation or redistribution of contribution funding.

Recipients have full independence in the selection of such third parties and will not be acting as an agent of the government in making distributions.

19.0 Other Terms and Conditions

Since the objective of the program is to pass the subsidy to the consumer, in the form of a price discount at the retail level, recipients of the contribution payments are required under the terms of the agreements to distribute it to their customers at the time of purchase.

20.0 Effective Date of Terms and Conditions

These Terms and Conditions will come into effect on July 1, 2022.