To borrow from Lio, we could call it
Galenflation. Because at BlawLobs, prices are not the only thing going up.
How much did Galen make during this period?
From the Management Information Circular for Loblaw Companies Limited it shows Galen’s related holdings to Loblaws went from $7.9B to $12.5B between 2021 and 2022.
His Loblaw-related equities position gained $4.5B in a year!
On a conference call in 2017, he spoke of Ontario’s minimum wage hikes by suggesting it would cost Loblaws $190 million in expenses and he would meet the minimum wage hikes by reducing manual bookkeepers and installing self-checkouts.
During the pandemic Weston recognized the people working at his stores were vital and facing increased risk, so he increased worker pay by $2/hour. When Covid Cases ebbed in July of 2020, Galen decided that the pay bump wasn’t needed anymore, and he took it away… but the pandemic wasn’t over. Canada experienced the most severe waves of the pandemic immediately after Galen took away Loblaws workers’ COVID pay.
He didn’t give it back.
Well, at least he must have paid lots of income tax into the government coffers, eh? Not so fast!
Loblaw defeats the tax man
Galen’s $735 million in dividend income is his share of $4.3 billion in after-tax profits that Loblaws made from 2019 through 2021. Any company that earns that much money is always looking for a way to keep it, and the tax man is always looking for a way to keep them from keeping it.
Loblaw’s innovation was to set up a bank in Barbados and use it to manage the investment capital from their non-Canadian subsidiaries.
Wholly owned Loblaw subsidiary “Glenhuron Bank” did a brisk business in money management, generating so much revenue from 2000 through 2013 that, if it had been earned in Canada, Loblaw would have owed hundreds of millions of dollars in taxes to the Canada Revenue Agency.
The CRA took Loblaw to court and said: “Wait a minute, you aren’t running a bank… you’re running a tax dodge! That money is being managed in Barbados specifically to avoid Canadian taxation!”