Bill C-28 (Historical)

Financial Literacy Leader Act

An Act to amend the Financial Consumer Agency of Canada Act

This enactment amends the Financial Consumer Agency of Canada Act to create the position of Financial Literacy Leader within the Agency. The Leader is to be appointed by the Governor in Council to exercise leadership at the national level to strengthen the financial literacy of Canadians. The amendments also provide for the other powers, duties and functions of the Financial Literacy Leader.

Financial Literacy Leader Act

[Ted Menzies, Conservative, Macleod, AB]

moved that the bill be read the third time and passed.

Mr. Speaker, it is my honour to be able to continue moving this bill through the House and that we are able to stand to speak to this at third reading today. The act is the financial literacy leader act. It is a very important piece of legislation, as it is a key part of efforts to improve financial literacy in Canada.

Before beginning my remarks here today, I would like to thank all of my colleagues at the House of Commons Standing Committee on Finance for their timely study of this legislation earlier this fall. In particular, I would like to recognize the work of the chair of the finance committee, the member for Edmonton—Leduc, not only for his continued leadership on the committee, but also for his serious commitment to improving Canadians' financial literacy. I know he is hard at work in committee right now.

He has been a very strong advocate, not only for this legislation, but for a number of key financial literacy initiatives, including his own recent private member's motion, Motion No. 269, a motion that called for the implementation of a task force on financial literacy.

There is no question that improving financial literacy is an important objective. It is one that I hope all parliamentarians would share. It is an objective that is increasingly seen as growing in international consensus.

In the words of a joint statement by the finance ministers of the Asia-Pacific Economic Cooperation forum earlier this year:

Financial literacy has become a life skill that is essential for every economy to foster safe and sound, efficient, transparent and inclusive financial systems.

Indeed, in a marketplace with an ever-growing number of complex financial products and services, it is more important than ever that consumers have the skills needed to make informed decisions.

As Annamaria Lusardi, a Dartmouth College economics professor, noted:

Given the complexity of current financial instruments and the financial decisions required in everyday life, from comparing credit card offerings, to choosing methods of payments, to deciding how much to save, where to invest, and how to get the best loan, individuals need to know how to read and write financially.

Fortunately, here in Canada, there has been a good deal of progress made in this area.

The Financial Consumer Agency of Canada, or as we refer to it, the FCAC, is the government's lead agency on financial education and literacy. It has introduced a number of positive initiatives in recent years. For example, the FCAC has developed innovative tools to help Canadians, such as a mortgage calculator that quickly determines an individual's mortgage payment and the potential savings that result from early payments on that mortgage.

It has also created innovative online information to help consumers shop for the most suitable credit card, as well as banking packages that actually meet their needs.

Most recently, due to the work of FCAC, Canadians can now benefit from an objective, reliable and free resource to help them make sense of the everyday financial questions they face. That is referred to as “Your Financial Toolkit”. It is available to everyone, for free, online at the FCAC website. I would encourage anyone who is interested to go to that website to see this financial toolkit. It is another way that Canadians can acquire this life skill that is so critical in today's economy.

In simple, non-technical language, “Your Financial Toolkit” covers the basic financial topics that most Canadians have to deal with every day, from banking, budgeting and saving, to personal debt management, fraud protection, as well as retirement planning. It also provides Canadians with an opportunity to practise new financial skills and apply the information to their own personal situation.

I should note that reviews for “Your Financial Toolkit” have been overwhelming positive. The well-known personal finance journalist Alison Griffiths has noted:

...I'm happy to report there is something there for everyone.

Our Conservative government strongly supports the good work by the FCAC, and we have provided it with more resources to build on those successes. That is why, for example, our government announced $3 million in new funding each and every year. That is in addition to the $2 million in annual funding already provided to FCAC for financial literacy initiatives. This commitment clearly demonstrates how vital our government believes that improving financial literacy is for Canadians, both at the local level and right across the country.

Thanks to our increased support for FCAC, we have seen our agenda for stronger financial literacy in Canada actually moving forward. However, that is only one part of our efforts. We have even gone further, expanding beyond and building on what already exists, starting with the task force for financial literacy that was established in June 2009. It was tasked with making recommendations to create a national strategy to improve financial literacy in Canada. It was comprised of 13 members drawn from the business side, educational sector, community organizations as well as academia.

The task force was created and given a mandate to talk to Canadians directly and get their opinions at the grassroots level, not to impose a top-down strategy. As a result, the task force travelled extensively all across Canada. In its travels, members heard about excellent creative examples of financial literacy education at the local and provincial levels. They heard examples of individual successes that would help inform a comprehensive national plan.

The task force delivered its final report “Canadians and Their Money: Building a brighter financial future”. It was handed to us in February 2011. It outlined 30 recommendations to improve the financial literacy of Canadians, aimed at various levels of government and stakeholders as well. I encourage all Canadians to visit its website at financialliteracyincanada.com to read that report and learn more about the work of the task force, especially those who contributed to it.

Since its release over a year ago, I am very pleased to say that the work of the task force was widely praised by a vast array of organizations, and commentators as well. For example, Social and Enterprise Development Innovations, a charitable non-profit organization that aims to expand economic opportunities for low-income Canadians, strongly endorsed the report, especially for its tireless work in consulting widely in every region of the country. In the words of Laura Watt, the president and CEO of that organization:

[Social and Enterprise Development Innovations commends] the federal government for recognizing the critical importance of financial literacy. We also commend the diligent and thorough work of the task force members, who engaged Canadians in every province and territory in building a much-needed national strategy on financial literacy.

Also, the Canadian Institute of Chartered Accountants spoke favourably about the task force report. It said:

The recommendations provide a concrete foundation from which to develop a national strategy.

Following the success of the task force's consultations and report, today's legislation starts the process of its implementation by acting on its number one recommendation. That is, establishing a dedicated leader within the government on these issues.

Specifically, it proposes to amend the Financial Consumer Agency of Canada Act to provide the framework for the appointment of a financial literacy leader. The proposed amendments also set out the duties, powers and functions of the financial literacy leader, enabling either him or her to carry out activities in support of this goal and establishing his or her terms of employment. This individual would be responsible for collaborating and coordinating his or her activities with public interest groups across Canada to contribute and support initiatives that will strengthen Canadians' financial literacy.

It would also continue the process achieved by the FCAC in its work on the national strategy for financial literacy. While the financial literacy leader will be essential to our government's financial literacy efforts, it is just one example of how the government continues to ensure that all Canadian consumers have the knowledge as well as the tools they require to save their money wisely while investing in their future in an increasingly complex financial marketplace.

Today's complex financial world demands improved financial literacy regardless of people's incomes or the types of jobs they do. Just consider a few of these real-life examples, such as: workers setting up a bank account and trying to determine the best way to reach their savings goals; families trying to make ends meet while saving for their first home; investors who may not be aware of the risks and returns of a specific investment or the true value of compound interest; seniors who, in a world of Internet banking and automated teller machines, are susceptible to financial scams and frauds; new Canadians unfamiliar with their rights to basic banking services; aboriginal Canadians living in a remote northern community who may face difficulties keeping up with new savings vehicles offered by government.

That is where financial education comes in. People who become more knowledgeable about financial matters are better able to obtain and benefit from those financial services. We know that financial literacy is the foundation of saving and investing, as well as the responsible use of credit. For example, when it comes to buying a house, being financially literate means understanding the true cost of borrowing. It means knowing that the first years of mortgage payments go toward servicing the debt, not actually paying down principal. Most importantly, it means knowing what questions to ask, such as what kind of mortgage people can get, what their repayment options are, what the fees and taxes are, how they can lower their payments and, above all, if they can really afford it.

Nowhere is the need for improved financial literacy more pressing than among Canada's youth. A recent study on youth financial literacy prepared for FCAC highlighted the cost of omitting basic financial literacy from a student's curriculum. According to the study of young Canadians aged 18 to 29, only one in four reported having received any education or training on personal finances, with most of this instruction occurring only at a post-secondary level. The study also demonstrated that this same demographic of young Canadians had a strong interest in financial education, especially when it comes to personal budgeting. Two-thirds make a monthly budget, although most do not always stick to it, unfortunately; and more than 7 in 10 put money aside for the future, although only half of them do so on a regular basis.

Young Canadians desiring to improve their money management should be an encouraging sign, particularly since young people now have more exposure to financial transactions than any generation before them. According to the same FCAC study, more than 8 in 10 young Canadians have a chequing account and almost as many, 72%, have a credit card.

We know that financial literacy education can be effective and that initiatives like the one being considered today can help ensure that Canada's youth get the tools and knowledge they need. Whether it is our country's teenagers or elderly, increased financial literacy leads to better consumer choices, a larger and more dynamic market for financial services, as well as greater involvement in our country's thriving banking sector. Its absence can put Canadians and, indeed, our economy at a competitive disadvantage, making Canadians pay more for necessary basic banking transactions, or perhaps short-term credit. Clearly, this is something that we all want to avoid and I am proud to have taken this aggressive action to date.

Improving Canadians' financial literacy is not an easy goal. It is an ongoing commitment that will require support from partners across the educational and financial sectors.

Making Canadians as financially knowledgeable as they can possibly be demands a long-term national approach and a collective commitment, one that is exemplified by the creation of a financial literacy leader, a position that today's act proposes to create. The groups actively involved in the delivery of these kinds of programs, like ABC Life Literacy, understand the importance of this position. As the latter testified at the finance committee:

A financial literacy leader, a national leader who helps us strengthen the financial literacy of Canadians, has the potential to help Canadians in this regard. Financial literacy is part of the spectrum of essential skills all Canadians need to thrive.

To build on the legacy of our parents and grandparents who spent only when they could afford it, we must work to ensure that our children and grandchildren fully understand the risks and the rewards of the vast array of financial products and services now available to them today. It is just common sense that our prosperity depends on markets and financial services being accessible to everyone.

This is something that our government has long understood and we have worked hard to implement initiatives to level the playing field for everyone. I can only hope that after careful study at the finance committee and with the opportunity to gain a greater understanding of the important measures contained in today's act, all members of the House will get behind the financial literacy leader and improve financial literacy for everyone.

We have had nearly a year to debate and examine this legislation, so let us get on with passing it. I therefore urge all members of the House to vote in favour of today's act, which will help all Canadians keep more of their hard-earned money, not give it to the banks as a result of a wrong and inappropriate product or service being offered and utilized.

[Glenn Thibeault, NDP, Sudbury, ON]

Mr. Speaker, I would like to ask the minister a few questions from what we heard at committee. The minister was at committee and did a fine job in testifying before us, but he talked about a couple of things there and in his speech here, that is, about an ongoing commitment to financial literacy.

One of our concerns on this side of the House was regarding the ongoing commitment to ensure that our financial literacy leader could speak in both official languages. The minister talked about that at committee and said there was an ongoing commitment to that and that it would be mandatory. Is that something he is going to continue to put forward?

Second, he talked about the importance of the task force recommendations. There were 30 task force recommendations. One of the things we saw on this side of the House as being truly important, that would have made the bill great, is if the bill had included some framework within it. The second recommendation of the task force, to have an advisory council, would have brought forward some framework, but it is not in the bill.

Is the minister going to commit to ensuring that the financial literacy leader has this advisory council?

[Ted Menzies, Conservative, Macleod, AB]

Mr. Speaker, I would suggest that this piece of legislation is great, but we can make it greater. I thank the member for his support on that and his good questions at committee.

When I answered at committee, I said that although it was not defined in the legislation, the necessity of bilingualism would, of course, be respected because this is all across this country. We need to recognize that we are helping Canadians from coast to coast to coast.

Certainly there needs to be some framework around this, but the financial literacy leader will be given the latitude, whether a man or a woman, to develop this framework. We will encourage this leader working within the auspices of the Financial Consumer Agency of Canada to give some thought to how this needs to be rolled out, including how we can engage the not for profit organizations across this country already working on this, how we can engage the financial institutions that are making considerable investments working on this, and how we can coordinate those efforts with the educational facilities within our provinces. That will be the mandate of this financial literacy leader.

[Rob Moore, Conservative, Fundy Royal, NB]

Mr. Speaker, I thank the minister for bringing forward this very important measure for all of our constituents.

He mentioned in his speech how Canadians interact with the financial system every day, whether via credit cards or debit cards, or writing cheques or going to the bank. We on this side of the House agree that they should always be treated fairly in their dealings with financial institutions.

Since our government was elected in 2006, we have already taken many steps to ensure the protection of consumers when it comes to financial services products. I am thinking specifically of the banning of negative option billing, for example, for financial products.

I would like you, if you can, to comment on some of the measures we are taking now and have taken in the past to protect Canadian consumers.

[The Acting Speaker, Barry Devolin]

Before I go to the minister, I would just remind all hon. members to direct their comments to the Chair rather than directly to their colleagues.

The hon. Minister of State (Finance).

[Ted Menzies, Conservative, Macleod, AB]

Mr. Speaker, one of the most important aspects of this financial literacy leader is teaching people how to actually ask the questions, whether they are applying for a mortgage or a credit card. It is the information, the transparency, that matters. That is what we found and what the hon. members was talking about, that there was perhaps a lack of transparency around some of the products that we did have.

The simple fact is that we have banned the credit card cheques that were being sent to people. People assumed that there was no charge on those cheques because they had not requested them. We said that we certainly did not want to see Canadians receiving unsolicited credit card cheques, especially when they were unsolicited, because Canadians did not realize there was a cost.

Then there was our banning of negative option billing, which my colleague referred to. We also required greater disclosure on mortgage prepayments, including the amount of money a person could actually save if they asked some questions when applying for their mortgage, such as how they could pay it off sooner and how much they would save. Then there is the matter of the simple cost of someone paying off only the minimum amount on a credit card. When we receive our credit card statement, that information is now in a little information box. It is shocking how long it takes someone to pay off whatever amount is on his or her credit card.

It is about simple information for people that they perhaps did not realize was due to them. We have put that in regulations, so Canadians can get that information and make wise decisions.

[Jonathan Tremblay, NDP, Montmorency—Charlevoix—Haute-Côte-Nord, QC]

Mr. Speaker, what is in this bill is one thing, but once again the Conservatives are showing that they have forgotten a huge chunk of the population.

What does the member think this bill does to help the Canadians who do not have enough money to invest in private financial tools?

[Ted Menzies, Conservative, Macleod, AB]

Mr. Speaker, it is interesting that the question is raised, because we have actually put in place 120 different tax reductions since 2006 when we formed government. We have made sure that Canadians do have more of their hard-earned money. An average family of four now keeps over $3,000 more than it did before. That is important. That is what we can do for Canadians, making sure that they keep more of their own money.

This legislation actually provides the information for them to be able to save more of their own money, to be able to invest it wisely, to be able to have a learned discussion with a financial adviser or someone who is simply providing them with an option for a registered retirement savings plan, perhaps even a tax-free savings account, which is one of the best vehicles that Canadians have had offered to them for saving for their retirement.

It is about the information, and we have actually reduced their costs. Now they can take some of that money and we can help them invest it wisely.

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

Mr. Speaker, it is important not only to talk about what is in the bill and what we have been doing, but also about the dissemination of information, as the minister brought up.

Many Canadians in today's technological age do not realize the information we should be disseminating and the information that we definitely should not be disseminating online. It is important that we raise that.

The awareness factor is something that has to be out there. A lot of my friends who are highly educated and have master's degrees do not realize that they are not very financially literate and do not understand how to calculate mortgage interest or credit card interest fees.

Regarding the awareness aspect of this, as the member for Edmonton—Leduc has acknowledged and done a great job in highlighting, could the minister talk about the impact on Canadians of our raising the awareness of this and having this debate on increasing their financial literacy?

[Ted Menzies, Conservative, Macleod, AB]

Mr. Speaker, this is a great opportunity. There were a number of witnesses at the finance committee, who are very much engaged in this and want to help people. The Financial Consumer Agency of Canada, FCAC, is doing a great job, especially with the addition of a leader who could focus specifically on this.

The FCAC has many other challenges ahead of it, but a financial literacy leader would be able to focus attention specifically on how we insert this into the educational system with our partners, the provinces, which hold the curriculum decisions. We think it is very important that there be a partnership there, that we start educating our children and even our seniors.

There is a lot of new technology. The fact is that one can now pay with a swipe of one's phone, which is pretty new technology for many Canadians. We need to make sure that they understand how that works. It looks like great technology, but we need to understand the challenges that go with it.

[Glenn Thibeault, NDP, Sudbury, ON]

Mr. Speaker, I am pleased to rise today to present the NDP's position on Bill C-28, which would create a financial literacy leader with the aim of improving financial literacy in Canada.

Let me start by saying that, obviously, an understanding of financial literacy is a good thing. Understanding how much the difference between a 5% and 5.5% APR will cost over the lifetime of a loan, how long it will take to pay off a credit card if only minimum payments are made each month, how much needs to be saved each month for school or for a car or to put money away for a down payment on a house, or for retirement, having this knowledge is clearly a benefit.

How do we get to the end point? As I said at committee, it is a little like golf. Some people hook. Others slice, but at the end of the day they are all trying to put the ball into the hole. Therefore, the question we must ask ourselves is: How well does the bill achieve its desired ends?

Unfortunately the bill, while a very small step, is not going to get us to the end point we all desire. For a start, the terms of reference for this position are extremely vague. While the holder of this post will be required to advance financial literacy, there is no definition of what constitutes financial literacy within the bill nor any attempt to define how we could or should advance it.

Moreover, the original recommendation to create this position was very clear on the need for an advisory council that would include labour, voluntary groups, educators and business stakeholders to direct the work of the financial literacy leader. The bill does not include any such measures to create this advisory council and, as such, there is very little in the way of accountability.

Additionally, there is no proviso in the bill that would ensure that this position is filled by someone who is fluently bilingual in both official languages. To me, and to the NDP, it would seem a necessary condition that someone who is expected to teach and encourage Canadians about financial literacy would be able to communicate in both French and English.

We in the NDP tried to address these problems at committee. We introduced six amendments, all of which were dismissed by the Conservative members of the finance committee. Most surprisingly, some of those nay votes seemed to contradict comments made by the Minister of State (Finance) in committee and here today.

When I asked the minister of state about the fact that bilingualism is not a legislative requirement in the bill, the minister replied that the ability to speak both official languages and to disseminate the information in both official languages will be mandatory. Yet just a week later when I tabled a motion to amend the bill to this effect, the Conservative members voted against the amendment on the grounds that they want to ensure that they can choose the right person.

We in the NDP believe that it is impossible to choose the right person if that person is not bilingual, because bilingualism is necessary to ensure that we are helping improve the financial literacy of all Canadians.

We are therefore left with a dilemma. The stakeholders that we have consulted have told us that the NDP approach is far superior to the bill that we are debating today, but unfortunately, and especially with the current government, the choice we are presented with is all or nothing, no compromise, no improvements. This is what is on the table and we can take it or leave it.

That is exactly what was on display at committee, where the Conservatives refused to accept even a single amendment. This approach is not good for the functioning of parliamentary democracy and it is not good for Canadians.

That is why we in the official opposition are not going to play these ideological games. Canadians want good governance and good public administration, and that is exactly what they will get when they elect their first NDP government in 2015.

That is why we in the NDP will be supporting the bill at third reading, not because we believe it is the big fix the Conservatives claim it is but because, for all its faults, passing the bill is better than the current status quo.

Unlike the Conservatives, we listen to stakeholders regardless of their political affiliations and we listen to their concerns when it comes to policy decisions. These groups have told us that the bill would be a small step in assisting their work and enhancing the financial literacy of Canadians.

Our concerns with the bill have certainly not disappeared. However, my colleagues and I will hold the government to account for all of the commitments that we have heard around their position, and when we form government in 2015, we will be in the position to correct all the problems that the party opposite is all too happy to ignore in order to score political points.

When we look at the bill, we should also look to place it within the broader policy changes that the Conservatives have brought forward in the past six years. For example, Human Resources and Skills Development Canada stats tell us that 26% of Canadians struggle with basic numeracy and 20% struggle with basic literacy. Yet the government that is trying to sell Canadians on financial literacy being the answer to their economic problems is the same one that cut $17.7 million from adult literacy programs in 2006. The Conservative government's approach is to give with one hand while taking away with the other.

It is clear that financial literacy is something that we cannot understand in a vacuum. In fact, during the committee process, my colleague from Quebec raised this issue with the minister of state. He said:

You mentioned curriculum. That is very much a key issue. When I was in my third year of high school—which is equivalent to grade 10, I believe—we had what was called an economic education program. It covered things like credit cards and bank accounts, but it also dealt with fundamental issues facing people such as unionization. We looked at everything from a macroeconomic perspective, taking a lot more into account than just financial markets.

Instead of strictly limiting the financial literacy discussion to financial markets, pensions and other really specific issues such as credit cards, don't you think we should widen the scope and talk about economic education in general? Taking that approach, we could work with the provinces to help them develop a curriculum component possibly for primary students, but especially for high school students, to educate all young people about the complexities of economics, beyond just the financial dimension.

The minister's response was simple and to the point. The minister said, “I certainly can't disagree with you: that needs to happen”.

When pushed on it, even the government agrees that we need a more comprehensive strategy than the one we have been presented with. Instead, we get a bill that includes recommendation one of the Task Force on Financial Literacy and ignores the other 29. The minister's response to this is that the financial leader has at his or her discretion the option to put in place many of the other 29 recommendations.

We would agree with recommendation one but not with ignoring all the others. What is the point of independent task force reports if the Conservatives simply pick and choose the parts they like? Recommendation two of the task force calls for the creation of an advisory council made up of financial institution members, educators, unions and other stakeholders to ensure that the financial literacy leader is properly guided.

The Conservatives were happy to say that they were introducing the first and most important recommendation, but what they are doing is equivalent to building a house without putting in a proper foundation. It is not enough to say that it could, will or should have been implemented. It should have been implemented side by side with the financial literacy leader legislation. To do otherwise is to say that it is not important to ensure that all voices are heard.

We in the NDP take a different approach, one that listens to a wide variety of voices and ensures that no Canadian gets left behind. We need to make finance more understandable, not just make people better at understanding it. Even for people who do not struggle with numeracy and literacy, finance is not a particularly comprehensible subject. Barrie McKenna, a business columnist for the Globe and Mail, states:

Looking to financial literacy to fill the void is like asking ordinary Canadians to be their own brain surgeons and airline pilots. The dizzying array of financial products, mixed with chaotic and increasingly irrational financial markets, makes the job of do-it-yourself financial planning almost impossible – no matter how literate you are. The average credit-card agreement is as intuitive as quantum physics.

We also need to ensure that Canadians are aware that sometimes it may not be in their best interest to take out certain financial products. Encouraging people to take out savings and investment funds creates lucrative fees for banks and brokers. In fact, according to Morningstar, an investment research company, Canadian fees for equity funds are some of the highest in the world, being on average around two and a half times higher than fees in the U.S. for example.

We need to ensure that our financial literacy regime will criticize plans where fund managers take a substantial fee regardless of the performance of the fund, that it will highlight funds like the CPP, regularly outperform private funds and it must communicate to people the need to weigh the inherent dangers of investing in the stock market. Unfortunately, without a definition of “financial literacy” and without an advisory council, we cannot be sure that this will be the case.

We as parliamentarians should also be wary about increasing the quantity of financial literacy available without ensuring its quality. We in the NDP understand that this is a possibility and introduced an amendment to improve the reporting requirements of the financial literacy leader. However, as seems par for the course, the Conservatives ignored the concerns and voted it down. This has two dangerous and interlinked consequences.

First, the model presents the possibility of shifting all blame off banks and onto consumers. At the individual level, people can begin to be blamed for their own uninformed choices and, at the national or even international levels, systemic problems are no longer the fault of banks that will lend beyond their means to individuals who borrow too much. Obviously, individuals do have a responsibility to manage their own finances but banks, hedge funds and other financial institutions have the ability to affect the economy in a much more profound way than individual consumers, and we must not forget that.

Second, what do we do for the people who actually end up worse off due to financial investments that fail? We have to understand that some people will lose their savings when businesses go bust or when the stock market drops. This has been the way the stock market has worked since the first recognizable stock exchange opened in Amsterdam in the 17th century.

What about those people who simply do not have the type of disposable income required to invest in their futures, the people who live paycheque to paycheque, the people who have seen their wages stagnate or fall in real terms since the mid-1990s? The government should recognize that for a very large portion of Canadians a lack of savings is a reflection of the disparity between the rise in the cost of living and the rise in wages over the last 15 years or so.

Encouraging savings is fine for people who have disposable income after they have paid for the essentials but, unfortunately, far too many people taking on debt is not a choice. It is the only way to survive.

An OECD report published in December 2011 pointed out that the trend toward a less progressive tax structure and a more unequal society here in Canada began in the mid-1990s under the then Liberal government and has continued since 2006 under the current government.

As famed Canadian economist, Jim Stanford, noted in his submission to the national task force:

Personal savings will never constitute an important source of financial security for the strong majority of Canadians who cannot save, given the paucity of their incomes.

If the government really wanted to give these people an opportunity to build their own savings, then it would regulate bank fees and the level of interest that is charged on credit cards in order to allow people to put a little bit aside each month to ensure that it can help with their savings.

Similarly, if the government wants to ensure that Canadians have adequate savings when they retire, the way forward is not to create a new and inherently risky vehicle for private savings. There are already multiple methods for Canadians to save for their futures, RRSPs and TFSAs spring to mind, if they have the funds available to invest.

These vehicles are already supported and funded by the government. In fact, studies have shown that the highest earning 11% of Canadians contribute more to RRSPs than the bottom 89% of tax filers combined. Because of the tax benefits of these investments in RRSPs, Canadian taxpayers subsidize that contribution by the top 11% of earners to the tune of $7.3 billion in annual net tax expenditures.

The creation of pooled registered pension plans, or PRPPs, therefore, only benefits those who are already able to invest in their retirement. It does nothing for the 30% of Canadian families who lack any form of retirement savings outside of CPP.

Encouraging people to invest in a risky vehicle on the stock market is not real leadership on financial planning. It again simply passes the entire risk and blame for an individual not having adequate retirement savings onto that individual. To make matters worse, the Conservatives have delayed the age at which Canadians are eligible for OAS from 65 to 67. It would make far more sense, if the government is really interested in Canadians' retirement security, in allowing Canadians to properly plan for their retirement, to reverse the changes to the eligibility age for OAS and, just as the NDP leader has done, make a commitment to the NDP plan to expand the guaranteed Canada/Quebec pension plan by phasing in an affordable doubling of benefits.

This plan has been called for by provinces across the country. It would allow Canadians both the ability to plan for their retirement and a guaranteed income to ensure they can retire with dignity. Moreover, the CPP is a much safer investment than market based private funds and consistently outperforms the market. Even business columnists, like the aforementioned Barrie McKenna of The Globe and Mail, pointed out the benefits of such a policy by stating:

And Ottawa could beef up the CPP, mandating Canadians sock away more money for retirement, while benefitting from the CPP's low costs.

However, so far, the government, and the Minister of Finance in particular, have not listened to this appeal for a real and proven way of ensuring Canadians can retire with dignity.

The problem is that the government seems to think that encouraging these skills is a suitable substitute for a proper regime of consumer protection, retirement security and a proper strategy for economic growth. The bill embodies the government's strategy, or lack of strategy, in addressing the issues that really matter to working and middle-class Canadians across the country.

I wonder why the creation of the financial literacy leader could not be included in the Financial System Review Act rather than being a stand-alone act? The Conservatives have no problem lumping together pieces of legislation that have no relationship to one another in omnibus budget bills but, apparently, a bill to amend the Financial Consumer Agency of Canada Act could not be included a system review of banking legislation. It appears to me that the only reason these did not go together was because the government hoped it could get some positive media out of this legislation, but who knows?

The NDP believes in real measures to protect consumers, seniors and low-income Canadians. My colleagues on this side of the House in the official opposition will continue to stand up for policies that really help hard-working Canadians. This is a small start, a very small step, and one which we will be supporting to send to the Senate in order to get the funds, which have already been allocated, out to the organizations that really need them.

[Mike Wallace, Conservative, Burlington, ON]

Mr. Speaker, I thank my hon. colleague across the way for standing and speaking in favour of financial literacy, in moving forward with this legislation and sending it to the Senate.

It is obvious that there is a need for some financial literacy based on the speech that was just given. We talked about CPP outperforming the marketplace. I would like to know if the member opposite could break down how much the CPP has invested in the actual stock market. Does he know how much is in bonds, treasury bills and in common shares? I wonder if he understands that CPP is invested, actually, in the marketplace and the reason it is outperforming is because it is a pool.

He criticized the registered retirement pooled savings plan that we put together but the CPP actually is a pool of funds. That is why, based on reducing risk and spreading risk, it has been able to perform better. The fact is that the CPP is invested in the marketplace.

I appreciate his support but the NDP could use a little financial literacy.

[Glenn Thibeault, NDP, Sudbury, ON]

Mr. Speaker, what the member forgot to mention is that the CPP is guaranteed and the PRPP is not. What we are calling for on this side is to ensure that Canadians can retire with dignity. The thing is that the Conservatives always forget the one tiny piece.

That is what I said about financial literacy. We need to ensure that Canadians have financial literacy but the financial literacy leader that the Conservatives are talking about and have brought forward is a very tiny step.

We encourage the Conservatives to bring forward this advisory council to ensure all French and English Canadians can get the education they need to ensure that we stop blaming individuals for the financial crisis. We need to ensure that they have the information they need and put the banks where they should be with the understanding that they have a responsibility with this as well.

[Annick Papillon, NDP, Québec, QC]

Mr. Speaker, I listened to the speech given by my hon. colleague from Sudbury, who demonstrated the importance of taking a stand regarding this bill on financial literacy. He also demonstrated what this could mean for Canadians on a day-to-day basis, and I thank him for that.

One point that I really appreciated, especially being the member for Québec, is the importance of having people who are competent as well as bilingual. We cannot overstate the importance of having bilingual government officials and the importance of having a bilingual financial literacy leader who understands people from Option consommateurs and the Union des consommateurs, and from all the provinces. I wish to thank my hon. colleague for that.

[Glenn Thibeault, NDP, Sudbury, ON]

Mr. Speaker, financial literacy truly is important. As a person who has a French last name and comes from a French family, I am working hard on becoming fluent in French. I have been doing this for a few years now but to be able to say that I could do this quickly and understand the complexities of many situations would not be fair.

We are asking the government, and the Minister of State for Finance has already mentioned it in committee and here today in the House, that it will be mandatory to be bilingual for this position. This is truly important to ensure that all Canadians, French speaking or English speaking, get the financial literacy education they need. Hopefully, the Conservatives will stay true to their word.