Contributions to Support Access to Healthy Foods in Isolated Northern Communities: Terms and Conditions

Table of contents

1. Introduction

The objective of the Department of Indian Affairs and Northern Development's food subsidy program is to make healthy foods more accessible and affordable to residents of isolated northern communities.

Registered retailers in the North, country food processors/distributors located in eligible communities, and food suppliers in the South who supply small retailers, institutions and individuals in these isolated communities, can apply for a subsidy based on the weight of eligible foods shipped by air to eligible northern communities. These subsidies are to be passed on to northern consumers by appropriate reductions in the selling prices of eligible foods.

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 transferred to consumers.

Effective April 1, 2011, the new food subsidy program will replace the Food Mail Program which is a transportation subsidy program delivered for the Department by the Canada Post Corporation (CPC).

2. Legal and Policy Authority

The Program is provided under the following authorities:

3. Purpose, Program Objectives and Expected Results

The purpose of the contribution program is to subsidize the cost of healthy, perishable foods, and on exception basis, non-perishable foods and essential non-food items, that are shipped by air 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 proposed 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. By making nutritious food more accessible and affordable, the Program seeks to increase its consumption and contribute to better overall health of the population, both Aboriginal and non-Aboriginal.

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 consumption of country foods (e.g. Arctic char, caribou, muskox) harvested in eligible northern communities.

Since price is not the only factor that influences consumption, the Program will be supported by targeted Health Canada initiatives that encourage the purchase, preparation and consumption of healthy foods.

It is expected that the subsidy will help lower the prices of nutritious foods in the North. In combination with complementary health promotion activities, it is expected that consumption 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 will contribute to decreases in the rates of chronic and infectious diseases. The key performance indicators for the program are: trend in food basket prices, weight of eligible food shipped, level of awareness of the program and its subsidy, and changes in levels of awareness of healthy behaviours. The following table presents a summary of the program's Performance Measurement Matrix.

Outcome Statement Performance Indicators
Intermediate Outcome
Consumption of nutritious food in eligible communities Estimated weight of eligible food purchased per capita
Immediate Outcomes
Access to subsidized nutritious food in eligible communities Food basket prices and weight of eligible food shipped per community
Residents in eligible communities are informed about the program and subsidy levels Level of awareness about the program and subsidy levels by participant in the surveys
Residents in eligible communities have knowledge of healthy eating and skills to choose and prepare nutritious foods Level of awareness of healthy behaviours
Payments to recipients (food suppliers) Value of subsidy
Subsidized food available in eligible communities Weight of eligible food shipped
Retail and community-based workshops, in-store demonstrations, educational materials, media, etc. # and type of community-based activities (e.g., workshops, in-store demonstrations, educational materials, media)
Trained and supported community workers # of trained community-based workers

4. Eligibility

Subsidies are available to three categories of recipients – northern food retailers, southern food suppliers and northern country food processors/distributors.

Northern Retailers
Retailers who operate 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 may be eligible for the contribution (subsidy).
Southern Suppliers
Retailers, wholesalers and distributors who operate a business located in ineligible communities within Canada 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, eligible institutions and individuals, and who agree to the terms and conditions of the contribution agreements may be eligible for the contribution (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).

The shipment by air of eligible items to eligible communities is eligible for contributions under the Program.

5. Type and Nature of Eligible Expenditures

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

Lists of eligible items and communities are maintained by DIAND and posted on the departmental website.

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

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. Total Canadian Government Funding and Stacking Limits

Maximum funding by DIAND 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 will be based on a subsidy rate schedule determined by the Department. These rates will 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. Method for Determining the Amount of Funding

The calculation of the contribution payment will be based on the weight of eligible goods shipped by air 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.

8. Maximum Amount Payable

The maximum annual amount payable for each recipient is $40,000,000. The amount payable to any recipient will be based on actual demand for and shipments by air of eligible items.

The schedule of subsidy rates will be adjusted annually 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 consumption patterns. 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. Basis on Which Payments will be Made

The Department may provide monthly advance payments to recipients based on monthly shipment weight forecasts as per past shipment information.

Recipients shall submit claims for subsidy 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 claims shall be submitted to the Department or its claims processing services provider who will verify their validity (e.g. eligible goods) and accuracy (e.g. proper subsidy rates applied). Reconciled claims accounts will form the basis for the next advance payment to the recipient.

10. 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:

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.

At the time of application, the potential southern supplier 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.

11. Due Diligence and Reporting

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, etc.) to provide data on products shipped and their pricing and to provide self-inspection of eligibility and quality.

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 next payment.

Overall oversight for Program direction and operations will be provided by an Oversight Committee composed of senior executives from DIAND, Health Canada and Transport Canada. In addition, a formal external advisory board of key northern stakeholders will assist with the monitoring of operations and the results of the subsidy.

To assist with monitoring and reporting, the Department will collect from recipients detailed information on shipments (e.g. 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) will assist the Department in measuring the Program's performance on an on-going basis. The PM Strategy shall include a logic model and measurable performance indicators related to food prices, levels of consumption of healthy foods, and northern consumer awareness of the Program and subsidy levels.

12. 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 IV 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 VII of the Official Languages Act.

13. 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.

14. 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.

15. 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.

16. 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.

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