Grocery prices in Northern Canada are consistently two to three times higher than in the rest of the country, leading to alarming rates of food insecurity. To address this, the federal government introduced a subsidy program in 2011 aimed at reducing food prices. However, recent research has found that these subsidies are not being fully passed on to consumers.

Today in The Conversation Canada, Nicholas Li from Toronto Metropolitan University and Tracey Galloway from the University of Toronto share the results of their study that examined whether subsidy increases had been effective in lowering food prices up north.

They found that, for every dollar in subsidy large retail companies received, prices for consumers only dropped by 67 cents, and in some cases, only 26 cents. Despite existing accountability measures, a significant portion of the subsidy is going to retailers.

Li and Galloway offer a number of ways to address this issue, including increasing community involvement in food systems, subsidies for traditional hunting and increasing competition among retailers. They also advocate for greater price transparency to improve accountability among retailers.

Also today:

Eleni Vlahiotis

Assistant Editor, Business + Economy

A person walks along a path in Iqaluit on March 6, 2019. THE CANADIAN PRESS/Sean Kilpatrick

Grocery retailers are benefiting from food subsidies in Northern Canada

Nicholas Li, Toronto Metropolitan University; Tracey Galloway, University of Toronto

New research about the Nutrition North Canada program shows that the subsidy is not being fully passed on to consumers.

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