[Witness spoke in Inuktitut]

[English]

Good afternoon, Mr. Chair and members of the committee. I appreciate the opportunity to address this committee today regarding the vital role of cargo delivery, particularly food transport, in the Canadian Arctic.

[Witness spoke in Inuktitut]

[English]

As an Inuk-born person, born and raised in the northern community of Kuujjuaq, I understand more than many what it means to struggle because of a lack of access to affordable food. As a child, I remember the hardship and strain it caused. Most of all, I remember going to bed hungry.

As you know, the issue is disproportionately worse in the north than anywhere else in this country, with rates of household food insecurity reaching 17%, 22%, 35% and 57% in the Yukon, the Northwest Territories, Nunavik and Nunavut, respectively.

At Canadian North, we know that we are not only providing a service; our aircraft touching down is seen by many as a lifeline in northern communities. In short, what we provide is an essential service. Our commitment to this essential service is unwavering, even in the face of unprecedented financial and logistical challenges.

First and foremost, it's important to note that our operations in the Canadian Arctic are not subsidized. I'll repeat that. We get zero subsidies under the nutrition north program. We are merely a conduit for the grocery and retail companies that are receiving those NNP subsidies to get their products on northern stores' shelves. Because of that, we must set rates that not only cover the cost of delivering cargo, including food, but allow for a minimum margin. Generally, I can say it is no more than 1%.

While NNP subsidies have been increasing, at Canadian North, our margins continue to shrink. Over the past two years, we've encountered significant cost increases, particularly in workforce retention and training, as well as fuel, infrastructure costs and key equipment purchases and maintenance. These challenges are exacerbated by strict and limiting conditions on us due to the original combination of Canadian North and First Air.

Despite these constraints, we continue to comply with regulations and strive to operate efficiently, while prioritizing serving the needs of our northern communities. As many of you are aware, operating in the north comes with its own set of unique challenges. There's inconsistent and insufficient airport infrastructure, like undersized gravel runways. Air navigation support is unreliable, primarily because of dangerously low staffing and shortages. On top of it all, there is a fuel supply shortage.

These are just a few examples of what we are facing. Moreover, our operations are frequently impacted by unpredictable weather conditions, darkness, freezing cold, whiteout snowstorms and more, all of which can delay deliveries for days at a time. There are, on average, 175 cancellations a month.

While we acknowledge the importance of the nutrition north program, we do not have any direct knowledge of how it's utilized by retailers to reduce food costs for northern residents. What we do know is that the subsidy is intended to benefit the Inuit and the communities we serve directly, yet we have seen mounting concerns that it is inadequate in offsetting the skyrocketing costs of food and food transportation. Something just isn't right.

I will wrap up my time by saying that the challenges we face in delivering essential cargo to communities across the Canadian Arctic are multi-faceted and complex. Still, we remain committed to providing this essential service to our communities.

I urge the committee to consider the unique circumstances and constraints we operate under. Collaborative efforts between government, industry and stakeholders are essential in addressing these challenges and ensuring the well-being of all northern residents.

We at Canadian North often say we are committed to making life better in the communities we serve. Personally, I think this should be the commitment made by everyone here today.

[Witness spoke in Inuktitut]

[English]

Thank you for your time. I'm happy to address any questions you may have.