Assessing the Effect of Food Retail Subsidies on the Price of Food in Remote Indigenous Communities: A Case Study of the Nutrition North Canada Subsidy Program
Food retailers in remote communities in Nunavut are subsidized through the Nutrition North Canada program. A duopolistic food retail market in Nunavut has fuelled concerns that a lack of competition is eroding the benefit of the subsidy to consumers. Existing audits and reviews of the program have failed to determine the pass-through rate of the subsidy. I estimate the pass-through rate of this subsidy and find that it is fully passed on to consumers, although heterogeneity in pass-through rates exist between communities. I also find that the differences in subsidy pass-through rates between communities stems from differences in cost structure, rather than differences in competitive pressures.