Second proposed class-action alleges northern grocer kept subsidies intended to lower food costs

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This article was published 03/03/2025 (223 days ago), so information in it may no longer be current.

The North West Company — which has a grocery monopoly in many northern communities — has again been hit with a proposed class-action lawsuit over allegations it is profiting millions of dollars from federal subsidies meant to lower food prices.

Lawyers working on behalf of two northern Manitoba First Nation residents filed the new statement of claim last week against the company, which is headquartered in Winnipeg.

The lawyers are asking for the court to certify the claim as a class action for allegedly keeping a portion of the money it receives from Nutrition North Canada, instead of using it to reduce grocery prices.

The terms of the subsidy requires it be passed on in full to customers via dollar-to-dollar price reductions.

The claim accuses the North West Company of deceit, negligence and of unjustly enriching itself by keeping a portion of the subsidy.

“For many years, remote communities in northern Canada have faced food scarcity and affordability issues,” the court papers say, with food shipped by air, rail or ice road.

The North West Company’s Northmarts or Northern Stores are the only grocer in about 30 remote, predominantly Indigenous communities.

The lawsuit claims in those communities, the North West Company passes on only about half of the subsidy to customers, alleging the stores earned about $119 million off it in 2022.

“(The company) has taken advantage of the vulnerability of the class members and their own market dominance by inflating prices of subsidized products in a manner which cannot be justified,” the court filing alleges.

The lawsuit is seeking to allow the two plaintiffs, a Norway House Cree Nation resident and a Pimicikamak Cree Nation councillor, to serve as representative plaintiffs — people who purchased items eligible for the subsidy from North West Company stores between April 2011 and the present.

The new claim comes weeks after different lawyers, working on behalf of three current and former Nunavut residents, filed their own proposed class action based on similar allegations of wrongdoing against the company.

The company’s roots go back to the fur trade and Hudson’s Bay Co.

According to the company’s website, a group of investors, including hundreds of employees, bought HBC’s Northern Stores Division in 1987 and, three years later, renamed its outlets under the Northern retail banner.

Last year, then northern affairs minister Dan Vandal asked for an external review of the subsidy program.

No statements of defence have been filed in response to either of the recent lawsuits, neither of which have been heard in court.

erik.pindera@freepress.mb.ca