Nunavut MLA Fred Schell wants the federal auditor general to launch a formal investigation into the Nutrition North program, but some retailers claim Schell is spreading misinformation.

Schell, who represents the communities of Cape Dorset and Kimmirut, raised his concerns about the subsidy Monday in the legislative assembly.

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Nunavut MLA Fred Schell wants the auditor general of Canada to launch a formal investigation into the Nutrition North program. (CBC)

He said in some cases, retailers are essentially shipping perishable foods for free or even making money from the subsidy.

Schell says the full consumer freight rate on non-discounted items from Ottawa to Kimmirut is $5.29/kg, though he said the North West Company and Arctic Co-operatives Ltd. don't pay general cargo rates because they've negotiated a lower rate with the airlines.

The Nutrition North subsidy for perishable food to Kimmirut is $5.40/kg. Schell says that means retailers pocket at least 11 cents per kilogram shipping perishable food to the community. 

"Will the premier and this government support a motion to ask the auditor general of Canada to investigate the program and include interviewing the retailers, airlines and indeed our constituents who are being ripped off by this program?" he asked.

Premier Eva Aariak said the Government of Nunavut will have a better idea about the actual cost of food after it reviews prices in 10 communities, a project which starts later this month.

Retailers claim Schell has wrong information

But one of the North’s biggest retailers says Schell is spreading misinformation.

"I think it's a real shame that people are misled in this way," said Duane Wilson, who is with Arctic Co-operatives Ltd.

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Stephen Van Dine, who runs Nutrition North Canada, said they monitor stores to make sure the subsidies are passed on to consumers. (CBC)

Wilson said Schell isn't calculating all the costs, as extra fees actually add another 27 per cent to the freight cost. His stores are not making a profit shipping food to any Nunavut community, he added.

Stephen Van Dine, who runs Nutrition North, says stores are monitored to make sure the subsidy is passed on to consumers.

"We have a number of different accountability mechanisms built into the NNC program," he said.

Van Dine said retailers have to submit monthly reports and are subject to periodic audits, which sometimes involve community visits.

But until that information is made public, many in Nunavut still have questions about who's benefiting from subsidies that go directly to retailers.