Finance Committee on Sept. 24th, 2012

[Jeremy Rudin]

Yes. Money was set aside in the budget.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Maybe if we could expand a little bit further again, there has been some talk about what the banks are doing to help educate consumers. What more...? I'm thinking in terms of how a number of services are offered by the banks. They offer some service in markets, for instance. Will there be some education in that respect so that people know...? Mr. Hoback was talking about some of the problems they had in the States—hedge funding, those areas. Will there be some education for consumers in that regard?

[Jeremy Rudin]

Thank you.

In terms of the current activities of banks, as Minister Menzies said, banks already do what the minister noted is a surprising amount of financial literacy initiatives. Some are done collectively through the Canadian Bankers Association. The Bankers Association works with Commissioner Menke's agency, for example, to bring volunteers to high school classrooms to teach about financial concepts. It has a seminar program called “Your Money”. It has done over a thousand of these seminars.

Individual banks have a variety of approaches. One bank, for example, has a program for grants that it gives to organizations delivering financial literacy to low-income or otherwise disadvantaged Canadians. Another has created an iPad application that families can use to teach their children about money. Collectively, the banks sponsor Junior Achievement, which also brings students together to learn about running a business venture, of which financial literacy is an important element, of course, but entrepreneurship is as well.

That said, following the recommendations of the task force, it's the government's hope and expectation that with the appointment of the leader, a variety of organizations will be encouraged to do more and to act in their ensemble more effectively.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Would the mandate possibly include new challenges? In other words, could the commissioner find, “Hey, here's a real area of concern”, and would it start to chase after those areas and start to follow those leads?

[Jeremy Rudin]

Yes, very much so. The mandate of the financial literacy leader, and I should note that the legislation also makes clear that the mandate of the agency as a whole, is also to support financial literacy. There's no restriction really placed on this, so it provides a broad flexibility to direct their efforts where they think it's most important and to react to events and trends as they emerge.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

So it would be a fluid mandate. It could change. It could—

[Jeremy Rudin]

Well, the overall mandate, of course, is to work to support financial literacy, but what exactly that involves is not specified in a way that would restrict the leader or the agency from tackling emerging problems, things that we have yet to anticipate.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Thank you, sir.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Van Kesteren.

We'll go to Ms. Glover, please.

[Shelly Glover, Conservative, Saint Boniface, MB]

Thank you, Mr. Chair.

I, too, want to say welcome back to all my colleagues. Welcome to our witnesses, as well.

As I listened to the discussion, something Mr. Mai said really struck a chord with me. He talked about the tremendous importance of the Youth Employment Strategy, and the fact that it was the subject of a recommendation. In the budget, the government had actually earmarked $50 million for this strategy. It's a shame that the NDP did not support our government on that measure. We had also set aside $20 million in another budget for young entrepreneurs. The NDP did not support that measure either. So I'm quite glad to hear they now support one of the recommendations. I find that every encouraging.

Ms. Menke, you and your team have done so much to help young people and to educate young consumers in Canada. So I want to give you an opportunity to speak to those efforts and to tell us if they will continue. The floor is yours.

[Ursula Menke]

In 2007, we were given the mandate to focus first and foremost on young people and to develop youth programs specifically. The first program we created was for 15 to 18 year olds, called the Young Workers Zone. It is for school-aged youth; it has to be offered in schools. Three-and-a-half years ago, we started spreading the importance of financial literacy and ensuring that schools offered the program. We've been quite successful on that front. Of course, there is always something more we can do in the area, but the initiative has been a great success overall.

The second program we developed was for post-secondary students. It is more of a seminar, lasting about five hours. It covers the ABC's of financial management and is given in community colleges, universities, community groups and a few workplaces. So far, this too has been a huge success. We are extremely happy with the results to date.

Those are our two main programs. I am hoping to create a third program, one for students in grades 1 to 9. We want to target children as early as possible and give them a basic understanding of financial management.

Obviously, we are in the mist of promoting and advertising these programs. That is one of our biggest objectives. We are very happy and we hope that a leader will be appointed so that he or she can do even more. We really support the idea of a leader and, of course, the resources to do even more. That frees us up to work on other areas that we haven't been able to focus on so far.

[Shelly Glover, Conservative, Saint Boniface, MB]

Thank you.

While I have you, I know November's Financial Literacy Month's events are fairly popular. What do we have planned for Financial Literacy Month, and how can I get my constituents involved in some of the plans?

[Ursula Menke]

It's past the stage of planning now. We have a website we hope Canadians will go to, because we want to let them know what's going on for November. We've been working very hard with all sorts of organizations—public sector, private sector, volunteer sector—to get them to participate in Financial Literacy Month, the month of November.

Last year we had over 2,000 activities done by 75 different groups. This year we expect to do still more. We will advertise them on our website. We will make sure people know about them. We're actually going to have a big launch in several different centres throughout Canada—including one here on November 1—to try to make sure that Canadians become aware of all the tools available to help them with their financial issues, and also to give them the wherewithal to do it.

[The Chair, Conservative, James Rajotte]

Okay, thank you.

We'll go to Mr. Thibeault for 10 minutes, please.

[Glenn Thibeault, NDP, Sudbury, ON]

Thank you, Mr. Chair.

I think it's very important to mention that if you go around the table, we're all in favour of financial literacy. I'll compare it to a game of golf: some of us are going up the left side of the course and others are going up the right side, but we're still trying to put the ball in the hole, which is to create financial literacy for Canadians. When it comes to that, we've been talking about a framework. There doesn't seem to be a lot of framework, in our opinion, in the bill.

Maybe I'll start with you, Mr. Rudin.

Could the FCAC have hired a financial literacy leader without this legislation?

[Jeremy Rudin]

I suppose Commissioner Menke could designate any one of her employees as financial literacy leader if she wanted to give them the job title. The government's decision in this regard was that the financial literacy leader needed to have a sufficiently high profile and that there needed to be sufficiently attractive conditions to interest a very qualified candidate, so the decision was made that this would be a Governor in Council appointee, and that required a legislative change.

[Glenn Thibeault, NDP, Sudbury, ON]

Following up on these comments, the FCAC could also act on any of the 29 recommendations that were put forth by the financial literacy task force prior to this legislation, if this legislation was enacted.

[Jeremy Rudin]

FCAC, as the commissioner stated, is very active in the financial literacy area. That said, the role of the leader is to encourage a high profile, to work with other stakeholders in a very high-profile way. I thinks that's one of the reasons the task force recommended a separate financial literacy leader rather than vesting all of these responsibilities in the commissioner. The position of commissioner was to draw a distinction between the leadership responsibilities—coordinating, getting out there and publicizing responsibilities—and the regulatory responsibilities of the commissioner. This is an important element that's going to be put in place if and when this bill is passed.

[Glenn Thibeault, NDP, Sudbury, ON]

I believe, as the minister stated, that the resources for this position are already in the budget. They're not included in this bill. Is that correct?

[Jeremy Rudin]

Money has been set aside in the budget, and there is already sufficient legislative authority for the government to make payments to the FCAC in support of financial literacy activities.

[Glenn Thibeault, NDP, Sudbury, ON]

Great. Thank you, Mr. Rudin.

Ms. Menke, you mentioned that planning is already in place to make sure you can address all of the other recommendations that were in the financial literacy report. Unless I misheard what you said earlier, is that what you were saying—that you already have plans under way to make sure the recommendations can be met?

[Ursula Menke]

Yes. We have looked at how to deal with the recommendations. That is not to say that all of the recommendations will be met. A lot of them are out of my purview, so they belong to other areas. That's one of the reasons we have established an interdepartmental committee—to raise the issue with others.

But, yes, we have been planning. Since the report has come out, we have looked at how to do it and what to do. This is the discussion we're going to have with the leader when that person is appointed.

[Glenn Thibeault, NDP, Sudbury, ON]

Well, here's a great opportunity, I think, for you. Maybe you need to mention the great work that the FCAC is already doing in this field because of the awards that you've won. Can you outline just a few of those for us?

[Ursula Menke]

That's quite a long list, as a matter of fact, but thank you.

We have spent a long time developing a lot of different tools, as a matter of fact. We have approximately 60 different tools just for information to Canadians. We've developed a lot of calculators, for example. We talked quite a bit about credit cards earlier. We now have on our website a minimum payment calculator. So Canadians can go to our website, and they do, to figure out how much they really should be paying on their credit cards to get them paid off more quickly so they don't pay so much interest.

We have publications. We do an awful lot of awareness building through various organizations. We're not a delivery of the end product—the information—ourselves, so we develop an awful lot of partnerships. We have one, for example, with the Canadian Bankers Association. Jeremy referred to it earlier. We have a lot of relationships with a lot of organizations.

You may recall that the minister, for example, referred to SEDI, Social and Enterprise Development Innovations. We work with them. They trained over 100 people in about 77 communities for us, to focus on low-income people and get financial literacy out to those low-income people and people at risk generally. We have the programs that I referred to.

We also have a new program that I hadn't referred to that is focused on adults, which really, if you will, defines what a financially literate Canadian should know. We're about to launch that program. In fact, we're launching it tomorrow morning. It is a major piece of work that gives.... It's a soup-to-nuts approach to financial literacy for adults. It's really meant as a reference. It's not really a course, although I think it would make a great course in first-year university. It's not really meant for adults to take as a course, but rather as reference information.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Thibeault.

Thank you very much, Ms. Menke, for mentioning all of that to us.

I do want to thank you all for being here today on an issue that's very dear to my heart. The issue of the definition of financial literacy was raised. I just wanted to point out that it's on page 10 of the report that was done, where financial literacy is defined as “having the knowledge, skills and confidence to make responsible financial decisions”, and then it outlines that definition. I'm assuming this is yes, but this is the definition of financial literacy that the FCAC, the Department of Finance, and the Government of Canada accept, this definition that was in the report. Is that correct, Ms. Menke?