I want to thank you for the opportunity to speak on this important issue.
There are citizens and community organizations across the country that are watching this process with great interest because they have a passion for the topic of financial literacy. Today I want to talk about a few things. First I want to talk about what SEDI and the Canadian Centre for Financial Literacy are. I want to talk about why we think financial literacy is really important. I want to have a quick discussion on the principles that we think are important in a national strategy and to give some updates on how the community is moving forward with some of these strategies. We also want to discuss our support for having FCAC house the future leader as well.
First, what are SEDI and the Canadian Centre for Financial Literacy? SEDI is a national non-profit, charitable organization that was founded in 1986. SEDI expands the economic opportunities of Canadians living in poverty through program and policy innovation. We envision a society where everyone has a lifelong opportunity to enhance their social and economic well-being. We accomplish our goal by using social innovation, a process that identifies, market tests, and brings good social policy ideas to scale.
Since our inception, SEDI has achieved significant large-scale policy and program impact in the area of self-employment, savings and asset building, and financial literacy. We don't do this alone. All of the successes SEDI has had have been in partnership with community organizations. We have 800 partnerships, and the number is growing.
SEDI has been involved with financial literacy since we started. In 2009 we started the Canadian Centre for Financial Literacy, which will work with community partners to bring financial literacy supports to 230,000 low-income Canadians by 2015. In the first two years of operations alone, the Canadian Centre for Financial Literacy has trained over 1,500 front-line staff in over 500 community organizations across the country to provide financial literacy programs and supports to their clients.
Why is this topic really important to us? Financial literacy matters in the context of people's everyday lives more today than ever before. These lives are growing more complex with more opportunities and choices, but this also comes with challenges and perils for those who are not financially literate. The choices that people make today can have lasting consequences for the rest of their life and collectively for the whole economy.
We'll be launching a paper during Financial Literacy Month called, “The Case for Financial Literacy”, which makes an evidence-based case to show how financial literacy can support other social policies like helping newcomers settle in Canada, helping Canadians successfully navigate through different life transitions, helping low-income families access appropriate benefits, and helping low-income families improve their housing situation.
We think a financial literacy leader is vital to creating a national strategy on financial literacy. Countries like the U.K., Australia, the U.S., and New Zealand have already started moving this forward, so we're trailing.
The following are some key principles that I think will be essential to creating any national strategy. The first is that the strategy should not be a substitute for regulation or consumer protection. The government will need to achieve a fair balance between regulation, financial literacy, and consumer protection. I like to think of the analogy of sports. In a sport you have good rules. You need a referee to enforce those rules. You also need people to teach you the game. You also need coaches to help nurture you along the way. Financial literacy is the same thing.
The second principle is that one size does not fit all. The strategy should be inclusive and accessible by design to low-income and vulnerable Canadians over the life cycle. We've learned over and over that financial literacy content and education must be tailored to specific needs of individuals to be effective. The issues that face low-income Canadians, newcomers, first nations, and youth are drastically different and should be so treated.
Financial literacy for those who are vulnerable and for those who have low incomes should be given specific attention in the strategy for the following reasons. There's currently a lack of readily available financial literacy information and education targeted to the unique needs of low-income people. Low-income people do not have resources to pay for financial advice and support. They have less room to make mistakes—a lot of us learn by trial and error—and they are required to stretch their dollar further. Let's be clear: this doesn't mean there's a correlation between low income and being financially illiterate. Actually, there's evidence that is starting to show the opposite.
The third principle is that supporting community organizations to provide financial literacy will be vital to achieving scale and sustainability. Most of the innovative work that's happening out of the financial literacy realm is currently coming out of community organizations. They were the first to identify this as being a problem and have been responding actively ever since. The infrastructure of community organizations across the country is a unique Canadian asset that should be nurtured to help bring financial literacy to all Canadians, specifically those with low income.
In partnership with FCAC and other community partners that are here today, SEDI has started, in the absence of a financial literacy leader, to make some headway on some of the task force recommendations. I'll give you an update on a few achievements that we've been working on.
First, the task force recommends that the Government of Canada as well as the provincial and territorial governments invest in the capacity of the voluntary sector to offer financial literacy information, learning, and guidance to Canadians. This is at the heart of what we do at the Canadian Centre for Financial Literacy, to provide this education and support. The challenge is that most agencies are doing this off the corner of their desk right now. The Canadian Centre for Financial Literacy has not been able to meet the demand across the country because of resources as well.
There has also been an ask for incorporating financial literacy into the settlement of newcomers. Over the last three years, Citizenship and Immigration Canada has sponsored SEDI and the Canadian Centre for Financial Literacy to run the financial literacy for newcomers project, where we've been piloting and creating specific content for newcomers. We have a proposal in right now to expand this to all newcomer agencies across the country.
We're working with first nations communities right now across the country. We're creating tools and resources around evaluation so that community organizations can start measuring the impact of what works and what doesn't.
Finally, I just want to talk about why we think FCAC is a good home for the financial literacy leader. In 2002 we concluded that financial literacy was a basic skill that all Canadians required, and we approached the FCAC about collaborating on developing a national strategy for Canada. The partnership produced relevant research and two major national and international financial literacy events in 2005 and 2008.
In our task force submission we stated that we would support the leader being part of an existing government agency or being a new agency. There are pros and cons for both approaches. We made it clear that we would support the decision of the government, but in our opinion, FCAC makes sense for the home of the leader. FCAC has a mandate for financial literacy and has been collaborating with all sectors towards the common goal of improving financial literacy of Canadians. They are passionate, knowledgeable, and credible on the topic. They are also well placed to bring the right stakeholders to the table to hash out a strategy that involves other government departments, different levels of governments, and private sector and community representatives. This will be key for a national strategy.
In my closing statement I just want to leave you with a few things to chew on. I encourage you all to think about financial literacy more broadly and with a sense of urgency. Financial literacy is not just about budgeting or knowing what interest you have on your credit card. It's about providing Canadians with an opportunity to access good financial information, education, and supports in a timely way throughout life's course. It's a complement to regulation and consumer protection. They are not at odds.
Building financial literacy in schools makes sense, but the message needs to be reinforced throughout life's course, at key moments in people's lives—when they need to make important decisions. We are currently building a body of evidence that shows financial literacy can help support other important social policies, such as helping newcomers settle, helping new Canadians successfully navigate important life transitions, helping low-income families access appropriate benefits, and helping low-income families improve their housing situation.
Let's be clear, financial literacy is not going to give a newcomer a job. It's not going to pay for a kid's education. On its own, it's not going to help a youth successfully transition into adulthood. It's not a silver bullet. It's not going to ensure the prosperity of our economy or end poverty. But it's difficult to imagine how we will achieve a strong economy and reduce poverty without the availability of appropriate financial information, education, and supports.
Thank you.