The $60-million-a-year federal program is meant to help retailers with the cost of shipping nutritious food to remote communities. The retailers are then supposed to pass those savings onto consumers.
However many Northern lawmakers and residents doubt this is happening.
"I don't think it's working here right now," said Tony Akoak, a Nunavut MLA for Gjoa Haven.
"When we buy groceries here in Gjoa Haven, there's just two small bags worth over $100 and that's just going to feed one person throughout the day. Not even a family. Not even a week."
The tabling of the auditor general's report comes just days after Ottawa announced it was pumping more cash into the subsidy.
Akoak says the Food Mail program which Nutrition North replaced in 2011 should make a comeback.