Speech by Commissioner Judith Robertson  ̶  CPA Canada Mastering Money Conference  

Speech

November 24, 2022

Toronto, Ontario

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Thank you for the invitation to address CPA Canada members today.

I also respectfully acknowledge that the land we are meeting on is the traditional territory and currently home to many diverse First Nations, Inuit and Metis peoples. 

As Commissioner of the FCAC, I have the great privilege of leading a small organization with a big mandate, which is to protect consumers of financial products and services. 

We do this in two principal ways: first we are a regulator.  We oversee compliance with the market conduct obligations of federally regulated financial institutions, like banks.

Second, we engage in research, programs, and education to strengthen the financial literacy of Canadians. 

Because a better-informed consumer is a better protected consumer.

Financial Literacy Month is a great opportunity to showcase this important work.  

This annual campaign brings together organizations and individuals from across the country that share a commitment to advancing financial literacy in Canada. 

And like all our most important initiatives, the support and engagement from stakeholders like CPA Canada is a big reason for its success. Thank you.

Financial Literacy Month

This year, Financial Literacy Month lands at a time when Canadians are facing many challenges and are adapting to many changes.

This uncertain environment is well-reflected in this year’s theme “Managing Money in a Changing World.” 

And this year, we at FCAC are putting a particular emphasis on managing debt.

Statistics Canada recently concluded that Canadian households have faced “a perfect storm of economic pressures.” 

A combination of low interest rates, greater access to credit and economic issues exacerbated by the pandemic, has resulted in Canadian households being among the most highly indebted in the world. 

And rising costs and interest rates make it more difficult to pay down debt.

Last year we launched the National Financial Literacy Strategy, which identified debt management as one of the key consumer behaviours that is proven to lead to financial resilience, which is the ultimate goal of the National Strategy.  

We define financial resilience as the ability to adapt or persevere through events, difficulties, and shocks to one’s financial life.  

This idea is very much in line with theme of this conference, the Circle of Life.  

You talk about life’s journey, with ups and downs and we talk shocks and changes that can be either predictable or unpredictable.  

National Financial Literacy Strategy

Whatever terminology we use, the message is clear.  

No one’s life moves in a straight line or in isolation from the external environment.  

The National Strategy introduced the idea that improving financial resiliency is a shared responsibility that requires collective action. 

This idea has resonated and has received enthusiastic support both domestically and internationally.

It represents a fundamental departure from past approaches to financial literacy which were more focused on providing information and education to individuals. 

These of course are still very important, but what the National Strategy recognizes is that consumers make their decisions within an environment that is influenced by many stakeholders; industry, media, regulators, community groups, researchers, governments, and so on.

So, instead of placing the onus solely on consumers, the National Strategy focuses on the responsibility of the entire ecosystem to remove barriers and catalyze actions to create positive financial outcomes leading to financial resilience.

On screen: Infographic: National Financial Literacy Strategy

The National Financial Literacy Strategy is a quite readable 40 page document that I encourage you to check out, but this one page infographic does an incredible job of summarizing the main points.  

I think it looks like a rainbow.  

The outer arch has the priorities for changes to the ecosystem aimed at reducing the barriers (pink) and catalyzing actions (gold) and specific priorities are identified.

Nestled underneath on the inner arch (green) are the priorities for consumer — like managing debt — that are enabled by the environment created by the outer arch.

At the centre is the ultimate goal — or pot of gold — of financial resilience.

There’s a lot packed into this small picture, but I’ll speak to a few items that are most relevant to this audience. 

One ecosystem change is the need to enhance access to trustworthy and affordable financial advice. (first gold box)

Providing more safe, unbiased spaces for Canadians to discuss financial challenges, and to find tailored financial help is of critical importance.  

This priority is particularly important for financially vulnerable Canadians. 

But trustworthy, reliable, and affordable financial advice would benefit all Canadians at one time or another. 

So, I would like to thank the individuals here today who have devoted countless hours as volunteers.

When you volunteer to deliver financial literacy workshops, help at tax clinics, or provide financial planning, you are making a positive impact on the financial ecosystem and helping us realize the goal of the National Strategy. 

Measurement Plan

The National Strategy provides the framework, neatly summarized in this infographic.

But real change will come only when we align and combine our expertise and efforts.

No single stakeholder or organization can do everything.

This leads us naturally to our latest initiative, which is how we will track our progress. 

At the beginning of this month, we released the Measurement Plan for the National Strategy which has the very apropos title “Counting Change”. 

The Measurement Plan will provide the tools and forum to aggregate and compare the impact of our collective efforts.  

We will use the results to highlight what works and what doesn’t so that we can all adjust and refocus our efforts where it makes the most difference.

I don’t want to stereotype, but it seems to me that counting, and measuring would have a natural affinity for a group of accountants.

So, I hope you will check it out and maybe join us next week, on November 29th, FCAC will be holding a virtual information session we will explain how to use the Measurement Plan, and how you can get involved.

New and enhanced protections for bank customers

At the far right of the infographic, one of the desired ecosystem changes you will see is the need to strengthen consumer protection measures.

In this case, I am happy to report that the ecosystem has already made progress. 

Last June, Canada’s new Financial Consumer Protection Framework came into force. 

It is an important milestone and provides Canadians with new and enhanced protections in their dealings with banks. 

For example:  

  • Banks must now meet higher standards in their sales practices, including providing products and services that are appropriate for their customers.   

  • Banks must also strengthen their complaint-handling procedures to get issues resolved faster.  

  • And they have to provide more information to their customers to help them make informed and timely decisions.  Perhaps you have seen the alerts and reminders that are being sent out when a payment is due?

Like the National Strategy, the Framework represents an important shift, one that places greater responsibility on industry to enable positive financial outcomes for their customers. 

In this way, the Framework and the National Strategy work together in that they both place greater onus on the financial ecosystem and recognize that positive financial outcomes are a shared responsibility. 

Digital innovation

However, one area of consumer protection that is still a work in progress is related to the digitization of financial services. 

I won’t say too much here as I know there is a whole panel on this topic tomorrow, including my FCAC colleague Dr. Supriya Syal, Mike Mercer from CDIC and Eric Santor from the Bank of Canada. 

However, I would like to take this opportunity to make a few high-level comments.

Innovations such as open banking, mobile banking, and new ways of transacting provide consumers with more convenience, choice and the benefits of more competition. 

They also provide opportunity for businesses which will benefit our economy.

And these can be great things. 

But there are risks, also. 

And a rapidly changing and complex environment can lead to confusion and open the door to questionable practices and even outright fraud.

Consider two examples that have been in the news: digital assets such as crypto assets, and novel credit services such as buy now, pay later and installment loans.

These are not subject to the same level of regulatory oversight as the traditional financial products offered by banks and credit unions. 

Both here in Canada, and internationally, regulators have taken notice and have issued statements of caution.  

Open Banking

One innovation that we are eager to see implemented, with the right protections, is open banking.

Open banking allows the sharing of financial information across applications and service providers.

The potential consumer benefits are tremendous, but the risks are also high at the moment as many are operating outside of a regulated framework. 

For example, currently, many applications use screen scraping which allows third parties access to your online banking credentials. 

It’s like giving someone your debit card PIN and can violate your user agreement with your bank. 

This can result in you losing protections, like the protection against unauthorized transactions. 

The federal government is currently developing an open banking framework for Canada and FCAC is actively participating to ensure that the consumer perspective is at the forefront. 

We are recommending that consumer protections should apply consistently and that they should be no less than what consumers currently enjoy today, such as: 

  • Liability protection against unauthorized transactions

  • Access to a fair process to resolve complaints and get redress

One final thought on the impact of this digital revolution is to remind you that the benefits of innovation can be spread very unevenly, and can even harm the more vulnerable segments of our population, if we are not careful.

Market forces alone will not create the result that we are seeking as a society.

In your work on financial literacy, you have no doubt confronted the reality that digital innovation, while great for some, represents a real barrier for many Canadians. 

That’s why one of the ecosystem changes called for by the National Strategy is about enhancing digital access and increasing support for digital literacy. 

I told you there was a lot packed into this infographic. As you can see, there’s lots to do.  

So, in closing, I will simply say thank you to each of you as individuals, and to the organizations you represent, for your on-going support for financial literacy. 

Your engagement is so important. 

Every connection, every meeting you have with a Canadian consumer represents an opportunity.

An opportunity to reduce barriers and take actions that will help them achieve financial resilience. 

We all have an important role to play, and it is in our collective power to build a more inclusive, accessible, and effective financial ecosystem for all Canadians.

So together, Let’s Make Change that Counts.

Thank you.

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