March 24, 2015
Sutton Place Hotel
Vancouver, BC
Check against delivery.
Thanks for the warm introduction. It’s a pleasure to be in Vancouver in the spring time after what has been one of the coldest winters in years in Ottawa.
CPA Canada has become our close ally in our collaborative efforts to improve financial literacy and I’m very pleased to support this effort to recognize their volunteer community.
I’d like to congratulate the volunteers who participate in CPA Canada’s “Community Connect Financial Literacy Program.” It is a shining example of community engagement.
I am impressed that 11,000 CPA volunteers are stepping up to provide free financial education sessions, which are instrumental in achieving our goal of improving financial literacy in BC and throughout Canada.
Thank you for giving your time, energy and knowledge for the benefit of your communities.
I want to offer special thanks to Joy Thomas and Cairine Wilson. I have come to know Cairine well since she joined my National Steering Committee for Financial Literacy last year. She has been doing exceptional work.
Tonight, I would like to give you an overview of why the Government of Canada has made financial literacy a priority. I will also tell you about the results of some research we conducted on Canadians’ financial knowledge and behaviour, about my role and mandate, and the work we are doing to develop a national strategy for financial literacy.
Finally, I will share some thoughts about where we might collaborate further.
So why financial literacy? Financial markets and products have become increasingly complex and many consumers lack the skills and knowledge they need to make sound financial decisions.
These decisions impact the well-being of Canadians: their ability to budget, save and invest; the success of their entrepreneurial ventures; and the strength and stability of our overall economy.
So, financial literacy today is as important as basic literacy and numeracy.
Financial literacy means having the knowledge, skills and confidence to make responsible financial decisions.
Canadians face some challenges when it comes to financial knowledge. The Canadian Financial Capability Survey, conducted in 2009 and again last year, found some Canadians are still struggling.
For example:
- Only 45 percent of Canadians have household budgets.
- About 30 percent struggle to pay their bills.
- 80 percent of young Canadians are not confident about their financial knowledge.
- 60 percent of Canadians don’t know how much they’ll need to save to maintain their desired standard of living in retirement.
There are some bright spots. About 70 percent of Canadians are saving for their children’s post-secondary education. And the number of people using government programs like Tax-Free Savings Accounts is on the rise.
Consumer debt remains at record high levels while the savings rates remain low.
I know that a survey of senior professional accountants was commissioned by the CPA Canada Business Monitor. Last December it found that many were concerned about consumer debt levels and the potential impact on the economy.
These debt levels leave consumers vulnerable to unforeseen events. Financial literacy can help people remain resilient when an unexpected event occurs. Like, job loss or sudden illness.
So, the Government of Canada has made financial literacy a priority.
Demonstrating this commitment, the Minister of State for Finance, Kevin Sorenson, announced my appointment as Canada’s first Financial Literacy Leader nearly a year ago.
Since then, I have had the opportunity to travel the country to speak to Canadians of all walks of life. And I found an overwhelming consensus among governments, non-profit groups and the private sector: financial literacy is not just a nice-to-have skill.
It’s a necessity in today’s complex environment. The overall health of our economy depends upon it.
My mandate is to collaborate and co-ordinate initiatives that strengthen the financial literacy of Canadians, and develop and implement a national strategy for financial literacy.
To help guide our work, Minister Sorenson and I announced a National Steering Committee on financial literacy.
Cairine Wilson is one of the 15 members of that committee. Her leadership and advice have been invaluable. I know she will continue to be a champion as we roll out the strategy later this year.
The Government held three phases of consultations last year to help us understand Canadians’ different financial literacy needs.
We began with seniors and those about to enter their senior years. Which helped us launch our first strategy, “Strengthening Seniors’ Financial Literacy,” last October.
Among its goals are to engage Canadians in preparing financially for their future years, and to educate them about savings and investment vehicles such as RRSPs, TFSAs, workplace pensions and government benefits and programs.
I am pleased to see that CPA’s Community Connect program provides a session on planning for retirement that addresses these needs.
Next, we focussed on other priority groups, including Canadians with low income, people with disabilities, Aboriginal peoples and newcomers. The final phase of consultations centred on youth and adults.
The consultations brought out some common concerns about financial literacy.
One is access to banking and other financial services. We heard that there are significant barriers to accessing financial services, particularly among the priority groups.
These can be geographic — distance from financial institutions; technological — limited Internet access; or due to a lack of language or computer skills.
Stakeholders also told us that financial learning should begin at an early age and continue through life. And we also need to make learning financial skills fun!
Another important idea put forth is that financial education often is most effective when it’s delivered directly in places people already are, like the workplace.
One study, called The Business Case for Financial Education, showed that every dollar invested in the financial education of employees provides a three-dollar return through decreased absenteeism, increased productivity and overall employee satisfaction. Financial literacy education in the workplace is a win-win for both employers and employees.
Some messages resounded through the consultations.
The first is that a one-size-fits-all approach won’t work. Clearly, the needs of Aboriginal peoples living on reserve are different from those of new Canadians in cities, or of students in debt to finance their studies. We must tailor our efforts to reach all audiences.
As well, “teachable moments” can be opportunities to bring home our messages. These moments occur at transition points in life — for example, when a young couple apply for a mortgage, or when new Canadians get advice on taxes.
We must also ensure that we communicate in clear language free from confusing jargon.
And loudest and clearest of all, we heard that collaboration among the public, private and non-profit sectors is crucial to our shared success.
We will release the national strategy for financial literacy later on this year, and we will seek your support and collaboration to put it into action.
On collaboration. FCAC’s largest collaborative project is the Canadian Financial Literacy Database. Housed on FCAC’s website, this one-stop shop lists more than 860 resources from over 75 organizations.
Anyone can use it to find the financial products and services they need. The database is also a networking tool, enabling like-minded organizations to build partnerships.
The database includes a self-assessment quiz that allows people to measure their money-management skills, and then links them to resources they need most in the database.
Please check out the database on FCAC’s website, ItPaysToKnow.gc.ca, and share this information with your clients and other contacts.
You will find collaboration in everything that FCAC does.
Financial literacy is a shared responsibility among the public, private and non-profit sectors.
With a unified membership of 190 thousand trained professionals, interacting with Canadians every day, CPA is a powerful force for financial literacy.
Members play an integral role in helping Canadians with everything from reducing debt and increasing savings, to some of the more complex financial decisions that they may need to make.
CPA’s initiatives shows your commitment to your clients’ financial literacy, and to your communities. The Community Connect program, aimed at everybody from school-aged children to retirees, is an excellent example.
I admire the interactive programs you have for children beginning in grade four, which deal with basic issues like saving, debt and credit. These are the kinds of initiatives we need to spark lifelong financial learning.
And I was very excited to learn that CPA Canada will launch its Financial Education Workplace Program this fall, delivering financial knowledge where people can use it immediately.
In closing, I invite you to deepen your collaboration with us. Ensure your resources are listed in the Canadian Financial Literacy Database.
Get involved in Financial Literacy Month, which takes place each November. Last year, it was a huge success with over 1,200 events taking place nationally.
And contact FCAC to explore ways we can work together.
By building on our collaboration, CPA and FCAC can strengthen Canadians’ financial literacy, reduce household debt, and increase household savings and long-term planning. Ultimately, this will reinforce the overall economy.
I look forward to working together with you.
