A Money Mart pilot project that redeems gift cards for only half their value was panned by the NDP on Thursday, and the government says it will review the issue.

Payday lending stores are often the target of ire for lending at exorbitant rates, but the program that gives back 50 per cent of the cash value of gift cards is particularly over-the-top, the NDP's Jagmeet Singh said in question period.

"Giving gift cards is a more dignified approach to helping these vulnerable people so they don’t have to line up at food banks or at Christmas hamper programs," Singh said. "Why does this government allow Grinches like Money Mart to steal Christmas from our most vulnerable people in Ontario?"

Consumer Services Minister David Orazietti said he hadn't been aware of the gift-card program, which is in operation in at least one Money Mart branch in Hamilton.

"Every day there's a new innovative twist by some of these organizations to sort of circumvent the spirit of what we're trying to do in establishing good, fair practices in this sector," he told reporters. "It's something that we're prepared to review and examine."

Orazietti said the government is already preparing new payday lending legislation, which should be coming in the spring. A consultation has already been done on the current rules and recommendations will be posted online for public comment.

The minister acknowledged it may be difficult to to come up with rules that effectively govern the gift-card practice.

"That is certainly a tough issue," he said. "If an individual comes in with a product that they want to exchange or trade for a certain value, then we'll look at and see whether or not it's a practice we should be in the business of regulating."

Singh noted that low-income residents in particular are hurt by this practice, and it means a big chunk of charity money is fattening the books of payday lending stores. "The scheme follows a growing trend by charitable organizations to give out gift cards to clients to help them buy gifts for Christmas and groceries for the holidays," he said in a press statement.

Orazietti said the government is "mindful, obviously, that some of the individuals engaging in this activity are our most vulnerable citizens … so we want to make sure there's transparency and accountability in the criteria by which you can make these transactions."

Ontario's payday lending legislation was last updated in 2008, Orazietti said.

Government promises review of payday lending gift-card scheme

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