The North West Company (NWC) has been accused of misusing federal subsidies that were supposed to bring down grocery prices in the north, which the company said isn鈥檛 true.

Last week lawyers representing multiple current and former residents of Nunavut filed documents in Manitoba鈥檚 Court of King鈥檚 Bench asking that a class action lawsuit be certified.

The plaintiffs claim that NWC, a Winnipeg-based multinational grocery and retail company which operates stores in northern communities in western provinces and in northern territories, kept portions of funding that it had received from the federal Nutrition North Canada program.

According to the federal government, the Nutrition North Canada program was launched in 2011 to make perishable and nutritious foods more accessible and more affordable to residents in eligible isolated northern communities that don鈥檛 have year-round road, rail or marine access.

Through the program, registered retailers in the north can apply for a subsidy based on the weight of eligible foods shipped by air to eligible northern communities.

The feds say those subsidies are to be passed on to northern consumers by 鈥渁ppropriate reductions鈥� in the selling prices of eligible foods.

The lawsuit states that between 2018 and 2021 NWC received more than $163 million in subsidies from the program and that the NWC did not appropriately pass those savings on to consumers.

鈥淒espite making representations that it complies with the requirement to pass through the entire subsidy to consumers, and despite making a commitment to do so as a condition of receiving the subsidy, the North West Company has instead unlawfully retained millions of dollars of funding received through the program,鈥� the lawsuit alleges.

The suit calls for the NWC to return 鈥渕isappropriated鈥� federal funding to its 鈥渋ntended beneficiaries.鈥�

The lawsuit also claims that because grocery prices were not appropriately reduced as required when companies receive the federal funding, that led to poorer health outcomes in northern communities including, 鈥渋ncreased rates of malnutrition, obesity, cardiovascular disease, diabetes and other morbidities associated with unhealthy diets, as well as increased rates of depression and suicidal ideation.鈥�

Since being launched in 2011 the Nutrition North Canada program has handed out more than $1 billion in subsidies.

An NWC spokesperson denied the allegations made in the lawsuit.

鈥淭he North West Company works with Nutrition North Canada, and fully participates with 3 party audits, ensuring 100 per cent of the funds are passed along,鈥� the spokesperson said in an email to The Winnipeg Sun. 鈥淚n this, The North West Company has passed all audits, meeting the obligation of having 100% of subsidies passed onto the consumer. We remain committed to this.鈥�

The spokesperson added, 鈥淭he Nutrition North program partially offsets the costs of bringing food to the north 鈥� but on its own, it is not enough. There are still substantial cost drivers in the north due to the lack of infrastructure, the high cost of materials and operations, and inflation.

鈥淲e want 快盈v3 communities to thrive and we want to work with all parties to help make that possible.鈥�

鈥擝y Dave Baxter, Local Journalism Initiative Reporter, The Winnipeg Sun