North West Company accused of holding on to subsidy money in proposed class-action suit

Lawyers representing three Inuit from Nunavut and Nunavik have started the process of filing for a class-action lawsuit that accuses the North's biggest grocery store chain of holding on to federal subsidy money that was supposed to be entirely passed on to consumers. 

The federal government started the Nutrition North program in 2011 to help residents in northern communities, where food prices can be significantly higher than in the south, access nutritious food. The subsidy is applied to a list of food items and hygiene products in 125 remote communities. 

A statement of claim filed before the Court of King's Bench in Manitoba on Feb. 5 calls North West Company, a multinational Canadian grocery company based in Winnipeg, "outrageous" and "predatory" for not passing 100 per cent of the subsidy on to consumers, as it's supposed to. 

North West Company's retail locations include 188 Northern stores and five NorthMart stores across northern Canada, according to its website.

"[North West Company]'s misconduct has caused — and will cause, if allowed to continue — a reduction in health and well-being outcomes for class members," the claim reads. It goes on to list a series of health problems related to poor nutrition, including obesity, cardiovascular disease and diabetes. 

The lawsuit has not yet been certified by a judge, nor have the allegations been proven in court. 

Former Nunavut commissioner Nellie Kusugak, film producer and social advocate Malaya Qaunirq Chapman and artist and cultural educator Isabelle Chapadeau are the plaintiffs on the statement of claim. 

The claim says because the full subsidy isn't being passed down to consumers, they've had to spend more money for healthy food — meaning they couldn't spend it on other things like housing, transportation and childcare. 

North West Company declined to do an interview with CBC News about the proposed class-action lawsuit. 

In a statement emailed to the Winnipeg Sun, a spokesperson for the company denied the allegations and said that it works with Nutrition North Canada and participates in third-party audits that ensure 100 per cent of the funds are passed on to consumers. 

The statement of claim cites a 2023 study that found overall only 67 per cent of the subsidy was being passed on to consumers. In communities where North West Company has a monopoly, the study found that just 53 per cent of the subsidy was passed on. 

Tim Dickson of JFK Law in Vancouver is one of the lawyers representing the plaintiffs. He told CBC News the 2023 study uses data that isn't publicly available, but that through the court process North West Company would be required to provide information about how the subsidy works. 

"To really litigate this claim, we will need expert evidence of economists based on a whole lot of data that the North West Company will have to disclose," he said. 

Also at issue is how North West Company markets the subsidy. When you enter one of its stores, certain items have price tags indicating the price before and after the subsidy is applied.