February 18, 2015
Winnipeg, MB
Check against delivery
I want to thank you for the opportunity to be here today, I’m learning so much!
Congratulations to Joshua and Zachary, and congratulations to AFOA on the 15th anniversary of this conference.
I’m happy to be able to speak to you about the importance of financial literacy in building individual and family financial resilience.
I hope that I can build on what you’ve already learned in the workshops this morning.
Resilience can be measured by an individual’s ability to adapt to change, overcome challenges or face adversity.
Unexpected life events, like a job loss or a sudden illness, test individual and family resilience. They threaten personal and financial well-being. How does financial literacy help you plan financially for the unexpected??
The winners of the PotashCorp Aboriginal Youth Financial Management Awards, Joshua and Zachary, clearly articulate how financial literacy helps build resilience and financial well-being.
Joshua Hill linked people’s financial planning skills to their ability to prepare for financial challenges. I couldn’t agree more.
He wrote: “I believe one of the main factors contributing to students dropping out of post-secondary schooling is the lack of financial skills such as budgeting, planning and simply saving.” These skills can help people plan financially for the unexpected.
Young people need to begin learning financial skills from an early age and build on them as they move through life.
Zachary Gladue is an example of the value of early financial education. At five, Zachary owned a successful lemonade and candy stand. He credits his parents for sharing their financial knowledge. “It will help me become financially independent in the future,” he said. What a role model he is.
Like Zachary and Joshua AFOA is well-placed to play a key role in building individual and family resilience through financial planning.
Your organization’s focus on enhancing the financial management skills of Aboriginal peoples demonstrates your commitment to improving financial literacy and financial well-being within your communities.
What is financial literacy? What I mean by it, is having the knowledge, skills and confidence to make responsible financial decisions.
I have been Financial Literacy Leader for 10 months now. During that time, I’ve heard again and again — and I believe wholeheartedly — that financial literacy is a fundamental life skill.
Consumers need to know how to ask the right questions to be able to make sound financial decisions and to remain financially resilient to changes in the economy. It’s as important to a good quality of life as basic numeracy and literacy.
Let me share some data with you. The Government of Canada conducted the Canadian Financial Capability Survey, first in 2009, and again in 2014, to shed light on Canadians' knowledge, skills and confidence in personal financial management.
While we are still analyzing the 2014 results, our preliminary findings show serious gaps in knowledge.
- 80 per cent of young Canadians are not confident about their financial knowledge.
- 60 per cent of Canadians don’t know how much they’ll need to save to maintain their desired standard of living in retirement.
Among Aboriginal peoples surveyed, who were off-reserve, only 45 per cent said they were planning for their retirement, down from 65 per cent in 2009.
AFOA is conducting a survey to capture this on reserves so that we get a better picture of financial literacy levels and needs. Please visit the information session if you can.
Canadian households are dealing with record levels of debt and have very low levels of savings. This combination leaves people vulnerable to unexpected life events.
On the plus side, about 70 per cent of Canadians are saving for their children’s post-secondary education.
However, among Aboriginal peoples, this figure is closer to 50 per cent. But there has been a significant increase in the number of Aboriginal peoples who use government programs such as Tax-Free Savings Accounts: from 8 percent in 2009 when the program started, to 25 per cent in 2014.
Background information on FCAC
These statistics give us a good sense of where we stand. The road ahead may be challenging but the government is committed to improving the financial literacy of all Canadians.
In July, Minister of State for Finance, Kevin Sorenson and I announced the 15 members of the National Steering Committee on Financial Literacy. They have been instrumental in providing strategic advice as we develop the national strategy for financial literacy. AFOA’s own CEO, Terry Goodtrack, and the other members will continue to champion initiatives and engage stakeholders as the strategy rolls out later this year.
A tremendous amount of work has gone into preparing the national strategy.
Consultations took us across the country to talk with stakeholders representing different groups, such as seniors and future seniors, priority groups, young Canadians and adults.
Phase two of our consultations, focused on Canadians with low incomes, newcomers to Canada and Aboriginal peoples. One of the groups I met with was the Alberta chapter of AFOA.
We received a great deal of feedback, and some of what we heard was reflected in the insights offered by Joshua, and Zachary.
A common concern was barriers to financial resources and services, such as distance to financial institutions, or technical barriers to online banking, such as limited Internet access, and the lack of computer or language skills needed to navigate the financial marketplace.
We heard there’s need for trusted, objective support networks that can help guide people through complex, technical financial information.
Joshua called for support from inside and beyond Aboriginal communities through education programs and mentoring.
We also heard about the importance of lifelong learning, integrating financial literacy into the general education system as early as possible and, as Zachary said, seeking opportunities to provide hands-on learning like he had.
Joshua had another great idea: attending entrepreneurship camps, classes and presentations given by business professionals in the community.
The two things we heard most often in the consultations were:
- First, financial literacy is everyone’s responsibility. Collaboration is fundamental to making progress and you will see it in everything that we do.
- Second, a one-size-fits-all approach will not work. Our messages and initiatives must be tailored to those we are trying to reach.
On shared responsibility, I was proud to launch the Canadian Financial Literacy Database during Financial Literacy Month last November.
This one-stop shop includes more than 860 resources from over 75 organizations.
Anyone can use this tool to learn more about financial products and services. The database can also be a networking tool, enabling organizations to build partnerships.
Our self-assessment quiz allows consumers to measure their money management skills, and links them to resources available in the database.
I encourage you to check out the database on FCAC’s website, itpaystoknow.gc.ca.
Regarding “one size does not fit all”
People’s priorities change, whether they are seniors on fixed incomes, people moving from rural to urban centres or young adults starting a family.
Everyone needs resources to support financial learning and planning at these key transition points to help them plan and prepare for the unexpected.
AFOA’s “Dollars and Sense” initiative is a great example of a financial education program tailored to the needs of Aboriginal children and youth.
Another example is SEED Winnipeg’s Money Stories: Grounding Youth in the Lessons of their Elders, which offers after-school management training to Aboriginal youth, using traditional cultural teachings and support from elders.
Using personal financial planning to develop individual and family resilience means building on teachable moments.
If you’re working with individuals in your community, you can lead them to trusted sources of objective information that emphasize the importance of financial planning.
This will help them become more financially literate and more resilient to challenges and unexpected events. And it will help improve the financial well-being of the whole community.
Financial literacy is a shared responsibility. Please, stay in contact with FCAC — you can see our contact information on the screen — and look for opportunities to collaborate with us and other organizations.
Let our young people, like Joshua and Zachary, continue to inspire us and serve as role models in our communities. Congratulations again!
Thank you.
