Loblaw’s payout is yours. Feel good about keeping it.

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When Loblaw Inc. admitted to price fixing, their $25 giftcard scheme was already in motion. By the time Canadians heard the news, it was accompanied by the promise that anyone who purchased bread at a Loblaw Inc. store was eligible for the cards. All you had to do was sign up.

Journalists reported on the price fixing on Dec. 19. Their giftcard website was registered through Go Daddy on Nov. 11 by Steven Jeffries from Freepoint Commodities.

The first person I saw telling us to donate our $25 Loblaw cards to a foodbank was Gail Vaz-Oxlade. She’s everyone’s favourite (mine included) personal financial helper and planner from TV’s From Debt Do Us Part and other shows. Gail gives good personal financial advice. She’s smart and she finds ways for people to manage their debt and financial woes.

I wasn’t surprised to see her call, or that many Canadians were supporting it. Part of her brand is individualizing household debt and showing people that the solutions to their problems are within their control. The problem is that household debt is epidemic and reversing the tide of rising household debt cannot be solved by Gail’s tough love, money jars or spreadsheets alone.

Just like donating your $25 Loblaw’s gift card to your local foodbank isn’t going to address hunger.

Loblaw’s $25 coupon ploy is smart: it buys goodwill from a population that they had been illegally screwing for more than a decade. It will likely force us to shop in their stores. It could even narrow the scope a class action lawsuit, as people who agree to take the money might have the amount of money they're eligible for, reduced.

If you buy one loaf of bread per week, and Loblaw fixed the price by increasing it an average of $0.45, it would take 55 weeks to reach $25.00. If you’re like me and you buy four bread products per week because your kids only eat bread, that would add up to be $93.60 per year in costs that Loblaw owes me. Over a decade, I would be out between $234 and $946. The $25 seems more like a slap in the face than compensation.

The maximum penalties for price fixing are $24 million in fines and 14 years of jail. In 2013, Hershey admitted to price fixing and paid a fine of $4 million. Loblaw proactively disclosed that there was a price fixing scheme for bread products. By doing this, they avoided the penalties.

If you purchase bread products at Loblaw stores, you deserve this money. Don’t let anyone shame you for pocketing it. Either take the $25 or hold out for more in a class action settlement. Price fixing is illegal and your money has lined the pockets of their corporate executives and shareholders. Use the small token of their shame in a way that makes you happy.

(Yes, donate it if it makes you happy!)

Gail Vaz-Oxlade’s rallying cry has been picked up by many others, including national media outlets. Maclean’s compiled a list of food banks across Canada. It was cross-posted to moneysense.ca. The author, Julie Cazzin notes that using your money may be a way to get closure, and that price-fixing hurt low income Canadians more than higher income Canadians, but then goes on to interview a food bank executive about the need that they have to fill their shelves to demonstrate the need they have for your $25. Indeed, the need is great.

But juxtaposing Loblaw’s blood/bread money with alleviating poverty obscures reality.

Food insecurity is a huge problem for people who live in poverty. One of the main drivers of food insecurity is the system in which Loblaw is king. Metro, Sobey’s and Loblaw are powerful corporations that control our food supply: in Loblaw’s case, they control who can distribute (and their fees), where it goes (and their fees) and for how much it can be sold.

Food bank usage is on the rise across Canada. From 2008 to 2016, it increased by 27.8 per cent. Alberta led in growth, with a stunning 136.1 per cent increase. Over the same time period, household debt rose from about 150% of household income, to be 173.34% in the third quarter of 2017. To compare, it was 85.94% in 1990.

Loblaw’s third quarter statements reported $1.4 billion in profits for 2017. In 2001, Loblaw’s profits were $563 million.  

Public policy touches this issue in so many ways: from trying to stop corporations from price fixing to maximize their profits, to taxing corporate profits and redistributing them to people based on need, to policies that could force companies to supply food directly to food banks, for free (a sort of corporate tithing) and so on. So why has the focus been on convincing people to take the money that is very much owed to them, and give it right away to their local food banks?

Food banks have been made critical because our society tolerates starvation. But they aren’t a solution to poverty: they fill a gap. Thanks to austerity policies, that gap is growing while politicians do the bare minimum to address the gap’s systemic drivers.

You can see this most clearly in the divide between who pays what in tax: us through our income taxes vs. the super rich in their tax avoidance schemes, and us through our tiered tax brackets based on our incomes vs. corporations and their embarrassingly low tax rates. Remember that while a Canadian who makes $52,000 annually pays a federal income tax rate of 26%, Loblaw enjoys a net federal corporate tax rate of just 15%.

Maclean’s could have drawn a diagram about how low corporate taxes and a disinterested Canada Revenue Agency are starving public funds that could be targeted towards poverty. They could have shown graphs that demonstrate the rise in household debt and the increased use of food banks. They could have explained the connection between minimum wage and poverty, or food bank use. But they didn’t, because telling individuals to do a good individual act is the limit to what the mainstream media considers to be acceptable activism.

This poses a huge threat to civil society: we cannot save ourselves through individual acts. It is impossible to end poverty and income inequality with the taxation levels we currently have. Instead, we need movements of people putting pressure on politicians to act in our best interests. No movement? No way in which to flex our collective political muscle, no matter how many individual acts are held up as the democracy gold standard.

Vaz-Oxlade’s approach makes sense for TV. Imagine she called student debt what it should be called (intergenerational theft) rather than “good debt”, or she looked at a couple scraping by and said: living in a shelter is your only hope for survival and then made a game out of them packing their bags. It doesn’t make for the best TV. But it perpetuates our public financial crises when this logic is applied systemically.

Taking Loblaw’s $25 gift cards and then giving the money to a food bank is a roundabout way to simply have Loblaw pay more to address poverty that they play a direct role in creating. Luckily, our society was built with effective levers to force corporations to pay their fair share. Do what you’d like with that money, but be sure to take action beyond individual acts.