Northern Food Basket

Introduction

The Northern Food Basket (NFB) was developed in 1990 to monitor the cost of a nutritious diet in isolated northern communities. This 46-item basket was modelled after Agriculture Canada's Thrifty Nutritious Food Basket, which was used to monitor the cost of a nutritious diet for a lower-income reference family of four (a girl 7-9 years, a boy 13-15 years, and a man and woman 25-49 years of age). Typical families are larger in the North. However, this family size was selected for the NFB in order to compare the cost of a nutritious diet in the North with Agriculture Canada's baskets for southern Canada.

The NFB was designed to meet the 1990 Recommended Nutrient Intakes for Canadians.¹ It was first used in the Air Stage Subsidy Review led by Indian and Northern Affairs Canada (INAC) in 1990.² INAC continued to use this basket to assess the impact of changes to the Air Stage Subsidy - more commonly referred to as the Food Mail Program - on the cost of a nutritious diet during the Air Stage Subsidy Monitoring Program conducted over the period from 1991 to 1994. The price survey results were summarized in a discussion paper published in 1994.³ The NFB proved to be a useful monitoring tool for comparing the cost of a food basket for a family of four across isolated northern communities and some southern cities in Canada. By now, a data series including more than 75 communities over 14 years has been compiled.

INAC intends to continue using the NFB to monitor the cost of a food basket for a family of four for one or two more years while introducing a Revised Northern Food Basket (RNFB), containing more items (68 versus 46). The RNFB is considered to be more culturally appropriate for Aboriginal people, the vast majority of those who benefit from the Food Mail Program, and is better from a nutritional point of view.

The approximate amounts of each food contained in the NFB are shown in the accompanying table (PDF 51 Kb). During the development of the RNFB, it was discovered that a number of errors had been made in calculating the quantities of certain foods in the NFB. ⁴ These errors have been corrected in the calculation of the cost of the basket presented here.

Price selection procedure

The procedure used to calculate the cost of the NFB is intended to maximize comparability between the cost from one year to the next in the same community, and from one community to another. The costs calculated according to this procedure are intended to represent the lowest cost of an identical food basket in northern communities at the time of the survey. For most items, the cost of the basket is based on the lowest price for specified brands and purchase sizes available in the community. By minimizing the impact of price differences among brands and sizes, we can more accurately measure differences in the cost of the NFB which are attributable to differences in transportation costs, other retail operating costs, wholesale prices and retail competition. The results are not intended to represent the lowest cost for the basket regardless of brands, purchase sizes and quality which a consumer may choose. For the latter purpose, a different price selection procedure would be required.

To ensure that prices are available for identical items across northern Canada and in southern supply centres, with minimal substitution of different brands and purchase sizes, certain national brands and the most common purchase sizes for most items were selected, based on the price surveys conducted in 1990. A few minor changes have been made over the years to reflect changes in the food processing industry. The sizes and brands chosen are not necessarily the most economical or the "best buy." Until 1994, because of time and cost constraints, INAC's price survey forms did not require recording the prices of all brands and sizes of the items included in the survey. The survey forms used since 1994 have provided greater scope for testing and using different price selection procedures reflecting different shopping strategies. The shopping strategy implicit in the procedure described above would represent a shopper who is inflexible in terms of brands and purchase sizes for most items, but carefully compares prices in all stores in the community and then selects the lowest available price for a preferred purchase size for each item and, in most cases, a preferred brand. In most northern communities, this would mean shopping in at least two stores and comparing the price of each item in all local stores before making a purchase.

In most southern centres, prices have usually been surveyed in only one store. Where more than one store has been surveyed in southern centres, the price selection is based on only one store at a time. This difference in survey coverage and the procedure in northern and southern centres will tend to reduce the difference between the cost of the NFB in northern and southern centres. However, any bias will be consistent throughout the time series. Neither the items in the NFB nor the purchase sizes and brands are intended to represent a typical or reasonable southern shopping basket. The sole purpose in calculating the cost of the NFB in the south is to provide a basis for analysing northern costs by comparing them with the retail cost of identical items in southern centres.

Special or Sale Prices

"Special" prices were used in the south (including Whitehorse, Yellowknife, Churchill and Happy Valley-Goose Bay) for items which were on special at the time of the survey. Shoppers in the south would expect certain items in a weekly food basket to be on special at any given time, even though the items on special would change frequently. Since INAC's main interest is in the total cost of the basket, rather than in the cost of any specific item, a cost for the basket using special prices would be more representative than a cost based only on "regular" prices. Furthermore, the regular prices of items on special at the time are not always known, making it difficult to base the cost of the basket only on regular prices.

In the North, specials are relatively rare. Only regular prices were used in the North, since the intention is to produce results which are typical rather than unusual. However, when regular prices for items on special were not displayed or recorded, special prices had to be used in the North as well.

Timing of price surveys

Ideally, surveys done in a community from one year to the next would be done at the same time period to minimize seasonal variations of prices for certain products which are more affected by this, e.g., apples, potatoes, and generally speaking, fruits and vegetables. Unfortunately, over the years, surveys have not always been done at the same time period from one year to the next. However, the fact that there are 46 food items in the basket tends to minimize the impact of seasonal variations in prices of specific items.

Limitations of Nutritious Food Baskets and the Northern Food Basket

Most nutritious food baskets are based on average purchasing or consumption data for a particular population group as a starting point to determine the kinds and amounts of foods. Therefore, they may not be typical of the food preferences of any specific individual or family. Furthermore, they do not allow for the cost of eating out. The exclusion of prepared, convenience foods and foods of little nutritional value means that they are not representative of food consumption or expenditure in Canada, although they do provide a useful benchmark for comparing the cost of a basic nutritious diet in different communities at different times.

Also, it is important to stress that nutritious food baskets are not intended to recommend or promote the consumption of any specific food included in the baskets. The choices of items within each food group are not all of equal nutritional value, and are not necessarily the most economical or nutritious foods that could be consumed to meet nutrition recommendations.

Finally, care needs to be exercised when comparing results from one community to the next since the NFB was developed mainly to track the impact of the Food Mail Program transportation subsidy, especially over time, with the understanding that there are other substantial costs incurred by retailers in northern isolated communities. Salaries, electricity and heating, construction and maintenance of buildings, transportation and maintenance of equipment, retail competition, and size of community are all factors that can, at least in part, explain variations in the cost of the NFB from one community to another. For instance, when looking at electricity costs in a sample of 18 communities in the Northwest Territories and Nunavut using the rate charged in Winnipeg in 2002 as a basis for comparison, these communities were paying between 3 and 7 times more with some, like Sachs Harbour and Colville Lake, paying respectively 11 and 32 times more. These costs can translate into significantly higher operating costs, which helps to explain why, on average, the NFB costs twice as much in isolated northern communities as in southern centres.

Presentation of survey results

The survey results have been grouped by region for presentation. Northern communities in a particular region can be expected to have similar transportation and operating costs, thus minimizing any variations in these costs for comparison purposes, although some costs, such as electricity, can vary substantially from one community to another within the same region. The introduction to each regional presentation identifies the designated Food Mail entry point and other southern supply centres, as well as the timing of the surveys in that region.

Results are presented separately for the perishable and non-perishable components of the basket, as well as the total cost of the basket. Normally only the perishable items are shipped under the Food Mail Program. Although all the non-perishable items in the basket are also eligible for shipment at higher postage rates than the perishables, non-perishables are generally shipped to isolated northern communities by marine service or winter roads.

The perishable items in the basket weigh approximately 25.5 kilograms and non-perishables approximately 21.6 kilograms, excluding packaging. If we added 15 percent to the weight to cover packaging and spoilage, it would cost approximately $26 in postage to ship the perishable items in this basket from the Food Mail entry point to final destination, at the postage rate of $0.80 per kilogram plus $0.75 per parcel in effect since July 1, 1993.

¹ Health and Welfare Canada, Nutrition recommendations: the report of the Scientific Review Committee (Ottawa, 1990).

² Indian and Northern Affairs Canada, Food for the North: report of the Air Stage Subsidy Review (Ottawa, 1990).

³ Indian and Northern Affairs Canada, Food security in Northern Canada: a discussion paper on the future of the Northern Air Stage Program (Ottawa, 1994).

⁴ Detailed information on the NFB and RNFB is presented in Judith Lawn, Frederick Hill, Alternative Northern Food Baskets (Ottawa: Indian and Northern Affairs Canada, 1998).

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