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April 2, 2015
San Antonio TX
Thank you for the warm introduction, Mr. Linfield. What a great conference this has been. It’s inspiring to hear what is going on south of our border.
Congratulations to the Institute for Financial Literacy on the tenth anniversary of your Conference. It’s a timely way to kick-off Financial Literacy Month in the US.
I would like to acknowledge the winners of the 2015 Excellence in Financial Education Awards and thank you for your commitment, innovation, and for the success of your programs. A special congratulations to my Canadian colleagues at Chartered Professional Accountants Canada!
I’m honoured to be your first international speaker. It has been a year of firsts for me in manyways. I’ll soon celebrate the first anniversary of my appointment. On April 15th, to be exact.
It has been a whirlwind year. Today, I will share with you what year one looked like — the major milestones reached, a little bit about my role and mandate — and where we are in developing Canada’s national strategy to strengthen financial literacy.
First, let me say, financial decision- making is part of consumers’ everyday lives — and it’s not getting any easier. As everyone here knows, financial markets and products have become more complex. Many consumers lack the skills and knowledge they need to make sound financial decisions.
In Canada, we define financial literacy as having the knowledge, skills and confidence to make responsible financial decisions. Today, it is as important as basic literacy and numeracy.
The Financial Consumer Agency of Canada, where I work, was established in 2001 out of a federal government task force on financial services.
The task force stated that “the current framework for consumer protection is not as effective as it should be in reducing the information and power imbalance between institutions and consumers.” So FCAC was created. We are a similar organization to the CFPB here in the U.S. We have two mandates: consumer protection and education.
Seeing the need to strengthen the financial literacy of Canadians, in 2007 the Government of Canada provided funding to FCAC for financial literacy to develop a program for youth, which we did. In 2009, the government created a second task force, this time focused on financial literacy.
The task force drew members from the business and education sectors, community organizations and academia.
They met with Canadians across the country to hear their views on financial literacy. The task force commissioned original research and reviewed international best practices.
In 2011, the task force made 30 recommendations in its final report including the suggestion to appoint a leader to develop and execute a financial literacy strategy.
Many groups in Canada — public, private and non-profit — are already active in financial literacy. Achieving real progress in improving financial literacy has and will continue to require concerted and cooperative efforts among these groups.
As Financial Literacy Leader, my role is to collaborate and coordinate financial literacy initiatives across all sectors and to develop and implement a national strategy.
To help me, the Minister of State for Finance, Kevin Sorenson and I announced the members of the National Steering Committee on Financial Literacy. Its members come from a broad range of public, private and non-profit organizations across Canada.
These include Cairine Wilson of Chartered Professional Accountants Canada, who won two awards yesterday and is here today. Members have been instrumental in helping me develop a strategy that is inclusive, relevant, and accessible to all Canadians. It will be launched shortly.
To help us understand Canadians’ different financial literacy needs, the government held three phases of nation-wide consultations. These focused on:
- priority groups, including Aboriginal peoples, newcomers to Canada, people with low incomes, and people with disabilities
- and young and adult Canadians.
Out of the consultations, and as a first step toward the national strategy, we published a document called Strengthening Seniors’ Financial Literacy last October.
This fulfills a Government of Canada commitment to develop a strategy responding specifically of the unique needs of seniors.
Its goals are to engage Canadians in preparing for their senior years, in planning during their senior years, improving access to and understanding of government benefit programs, and combatting financial abuse of seniors.
Several organizations have announced new initiatives in support of the seniors’ strategy. For example:
- The credit union movement started training frontline workers to recognize, review and respond to possible elder abuse.
- The Canadian Bankers Association enlists volunteer bankers to hold sessions on fraud, financial abuse and cash management for seniors.
- And the federal government re-designed an online tool that helps Canadians calculate their retirement income.
In all the consultations two ideas came to the fore:
- First, a one-size-fits-all approach will not work. Messages and initiatives must be tailored to those we are trying to reach.
- Second, financial literacy is everyone’s responsibility. Collaboration is fundamental to our success.
On tailoring our approaches: We heard repeatedly that people’s priorities change, whether they are seniors on fixed incomes, single parents saving for their children’s education, or young adults starting families.
These are what I call “teachable moments,” when people are ready to absorb particular financial knowledge and develop financial capability.
But providing vital information when consumers are likely to be receptive to it is only half the effort. The information must be communicated clearly, be easy to use and understand, and come from trusted, objective sources.
In the consultations, we heard about the need to encourage partnerships between the public, private and non-profit sectors. Everyone wants to ensure we are all working toward the same goals.
This confirmed what we at FCAC have learned through experience: we cannot do it alone. Collaboration among all individuals and organizations invested in improving the financial literacy of Canadian consumers is critical to success. And so collaboration is at the heart of everything we do.
Since I became Leader last year, all of us engaged in financial literacy in Canada have further developed collaborative networks. And we’ve encouraged new ones where they were needed.
To help connect organizations, every few years FCAC hosts a National Conference on Financial Literacy. Similar to this conference, it’s an opportunity for our financial literacy community to share best practices, success stories and the latest research.
At the 2014 conference, I was proud to announce the launch of FCAC’s latest and largest collaborative initiative: the Canadian Financial Literacy Database.
I’d like to show you a video FCAC produced to promote it.
It’s housed on FCAC’s website, ItPaysToKnow.gc.ca. The database is a one-stop shop listing more than 860 resources from over 75 organizations. Users can search for resources by topic, target audience and many other variables.
And it includes a self-assessment quiz so people can measure their money-management skills. Depending on the knowledge and skills they’re lacking according to the quiz, the user is then linked to the database resources they need most.
The database is also a networking tool, enabling like-minded organizations to connect and build partnerships.
So that’s some of what we do to collaborate with those in the private and non-profit sectors. To promote collaboration within Canada’s federal government, I chair the Interdepartmental Committee on Financial Literacy. The committee strengthens the dialogue among federal government divisions whose work touches on financial literacy.
I hope to find similar opportunities to collaborate with Canada’s provincial governments such as the education ministries when I reach out to them this year. That’s because no single level of government in our country holds all the levers that can help us achieve greater financial literacy.
As the government rolls out the national strategy for financial literacy later this year, we expect that our many partners will help to implement it.
Doing so will be a shared responsibility. We count on the participation of financial literacy networks, the Interdepartmental Committee on Financial Literacy and National Steering Committee members.
They will act as champions for financial literacy and will carry the torch within their own organizations and communities, engaging consumers across the country.
Canada’s national strategy will set high aspirations for financial literacy. How will we know our plans are working?
We will evaluate them using a range of tools, and adjust as necessary. Our evaluation methods will include surveys and other feedback from stakeholders.
As well, our financial capability survey,, which is fielded every five years, tests Canadians’ financial knowledge, behaviours and attitudes. It will continue to be a benchmark for measuring changes in Canadians’ financial literacy over time. A couple of findings from the 2014 survey: less than half of those surveyed have a budget, and 3 in 10 said they were having trouble paying bills.
Additionally, FCAC will work with the private and non-profit sectors to develop an evaluation toolkit. We will share the toolkit with all those working to deliver financial literacy programs so they can assess their programs’ effectiveness and where and how financial literacy is improving.
One question remains: will financial literacy lead consumers to better financial decision-making?
We are conducting research to better understand the factors that influence decision-making. We already know that people’s circumstances, experiences and personalities have significant impacts on their decisions.
So do the ways in which financial information is presented to them— how we say it — as does the context — where we say or present it. That is why it is vital to tailor financial information and financial literacy programs to people’s specific needs.
Research also shows us that default choices have a huge impact on consumer decisions. For example, when people start new jobs, they may have to choose whether to join their employers’ corporate pension plans if one is offered. Many later regret not joining.
Something as simple as a box on a form can nudge financial consumers toward decisions that can have a major impact on their financial well-being. That’s just one example where collaboration between government and the private sector can make a significant difference.
We are also looking toward our international counterparts for research on behavioural economics.
I am a member of the International Network for Financial Education, or INFE for short. It is part of the Organisation for Economic Cooperation and Development.
INFE members work together to develop best practices and models that all countries can use to improve financial literacy.
For example, INFE developed High-level Principles on National Strategies for Financial Education. Canada participated in this work. These were endorsed by G20 leaders. They provide a framework to help countries develop their national strategies. Some 50 countries have done so to date.
Building on this base, INFE is now developing a policy handbook and a checklist – practical tools to help countries implement their strategies.
Financial literacy is a shared responsibility at home and among our international counterparts.
We have a common goal: to enhance the financial literacy of our population.
This Annual Conference on Financial Literacy exemplifies the value of collaborating toward achieving that goal.
The sessions in which I’ve participated underscore that value. I look forward to hearing more about your work in financial literacy.