This bill was last introduced in the 41st Parliament, 1st Session, which ended in September 2013.
Jim Flaherty Conservative
This bill has received Royal Assent and is now law.
This is from the published bill.
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.
All sorts of information on this bill is available at LEGISinfo, an excellent resource from the Library of Parliament. You can also read the full text of the bill.
The House proceeded to the consideration of Bill C-28, An Act to amend the Financial Consumer Agency of Canada Act, as reported without amendment from the committee.
The Speaker Andrew Scheer
I wish to inform the House that because of the deferred recorded divisions, government orders will be extended by 25 minutes.
There being no motions at report stage, the House will now proceed, without debate, to the putting of the question of the motion to concur in the bill at report stage.
Financial Literacy Leader ActGovernment Orders
October 31st, 2012 / 3:50 p.m.
Conservative
Some hon. members
Agreed.
An hon. member
On division.
The Speaker Andrew Scheer
(Motion agreed to)
When shall the bill be read a third time? By leave, now?
Some hon. members
Agreed.
Financial Literacy Leader ActGovernment Orders
October 31st, 2012 / 3:50 p.m.
Conservative
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?
Financial Literacy Leader ActGovernment Orders
October 31st, 2012 / 4:10 p.m.
Conservative
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.
Financial Literacy Leader ActGovernment Orders
October 31st, 2012 / 4:15 p.m.
Conservative
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).
Financial Literacy Leader ActGovernment Orders
October 31st, 2012 / 4:15 p.m.
Conservative
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?