The North West Company recently responded to Nunavut’s Qulliq Energy Corporation (QEC) application for a proposed power rate increase of 7.6% on average across Nunavut over the next two years. 

The proposed increase is very concerning and will only further exacerbate the impact of high operating costs on food retail prices.  In addition to shipping costs, a significant cost driver contributing to the higher cost of groceries in the North relates to maintaining a physical store presence in these communities.

Increasing Costs

With an annual electricity cost in Iqaluit of approximately $1 Million, the proposed incremental annual rate increase is in excess of $200,000, or the equivalent of eight (8) entry level positions in our Iqaluit NorthMart store.  With an average rate increase of 7.6% across Nunavut, the expected annual incremental increase is $420,000 for all North West’s Nunavut locations. 

We work in an increasingly competitive environment, including online and southern retailers.  These retailers have no local stores in the north, have made no local investments, and have no local employees. These significant rate hikes will only lead to higher grocery prices in our markets, further impairing our ability to offer a broad range of products to local customers.

Food Insecurity

Access to healthy and affordable food has been referred to as an urgent public health issue in Nunavut.  Nearly 70% of Inuit homes in Nunavut are food insecure, an average eight times higher than the Canadian average (Statistics per Nunavut Food Security Coalition).  According to the Caledon Institute Report on Poverty and Prosperity in Nunavut, “Prices for some goods and services, such as food, housing and transportation, are double or triple the rest of the country – effectively rendering Nunavummiut considerably poorer in their purchasing power than other Canadians”.  The higher utility rates will further erode the purchasing power of Nunavummiut families, particularly those on social assistance, the majority of which are already experiencing food insecurity.

Increased Government Support

In addition to reducing the proposed rate adjustment, we believe that the Government of Nunavut, should request increased funding from the Federal Government in order to protect low income Nunavummiut from further food price increases. North West has advocated for increased funding for government food subsidy programs to offset the higher operating costs including Nutrition North Canada, a Federal Government program which subsidizes healthy food choices including many perishable products. We have recommended that subsidy levels need to be annually indexed to inflation to preserve the value and integrity of the NNC subsidy, which is currently being eroded over time.  There have been no increases to subsidy levels since the program launched in 2011.