Thank you, Mr. Chair, for the opportunity to speak with you and the committee today.
Momentum was grateful to see important steps to improve the financial inclusion of Canadians in the budget. Momentum is a community organization in Calgary that connects people living on low incomes to economic opportunity. Our big goal is to create a local economy that works better for everyone. One of our key approaches to working with people living on lower incomes is to help them learn about and save money, or what we call becoming financially empowered.
We worked with a newcomer named Timothy several years ago whose experiences highlight the important changes proposed in the budget. Timothy moved to Canada from Nigeria. After arriving, he struggled in survival jobs and ended up couch surfing. When his mother got sick in Nigeria, he took out a $400 payday loan to cover her medical expenses. By the time he paid off the payday loan, it cost him $2,400. While struggling to pay off his loan, he was connected to Momentum. He participated in a savings program where people earn a match to their savings while they learn about money. Timothy also managed to open an RESP and access the Canada learning bond for his child. Despite the challenges, Timothy became financially empowered. Several policy announcements in the federal budget will create opportunities for more Canadians like Timothy to become financially empowered.
We have specific proposed changes we would like to highlight today. These include the following.
The first key change is automatic enrolment for the Canada learning bond. We know education is a direct gateway for people to earn more money. We also know that children with an education savings account are much more likely to attend some form of post-secondary education. Momentum and community partners in Calgary worked for many years to promote the Canada learning bond to families living on low incomes, which contributed to increased uptake of the CLB from 20% to over 50%. That is one of the highest uptake rates currently for any municipality in Canada.
To reach the other 50% of children who still weren't getting the CLB to access education savings, we completed education savings policy research that recommended greater auto-enrolment. As a result of the change proposed for auto-enrolment, approximately 130,000 children born after 2024 could receive the Canada learning bond every year. At a lifetime value of $2,000 per child, an additional $260 million in annual education savings may go directly to families living on low incomes. However, including the auto-creation of a social insurance number for Canadian children living on lower incomes would make this policy change more effective. Auto-enrolment in the Canada learning bond is an important step towards intergenerational poverty reduction and a huge boost to Canada's future skilled workforce.
The second key change we'd like to highlight is automatic tax filing. Canadians living on lower incomes are the most likely to not file taxes. The expansion towards greater automatic tax filing will support up to two million Canadians in accessing benefits that can help them make ends meet. Since the average low-income tax filer receives an additional $3,500 in annual income from filing their taxes, this change is a key step to reducing poverty in communities across our country.
The third key thing we want to highlight is lowering the criminal rate of interest. We are very pleased to see the government reiterate the commitment made in budget 2023 to lower the criminal rate of interest to a 35% annual rate. The proposal to improve enforcement of the criminal rate of interest in this budget is also a promising step to ensure Canadians are adequately protected from high-cost credit. Based on Timothy's experience with a payday loan, we encourage the government to consider no longer exempting payday loans from the criminal rate of interest.
The fourth key highlight, and the last one we want to feature today, is investment in community financial empowerment supports. Prosper Canada is proposed to receive $60 million over five years to expand community-delivered financial help services to approximately one million lower-income Canadians. This is much-needed financial support, as many community-based, not-for-profit organizations like Momentum that deliver financial empowerment services receive very little government funding for this work. With the rising cost of doing business for non-profits like us, this funding can stabilize existing programs and enable important expansion.
Many Canadians are struggling to make ends meet, especially with the rising cost of living. Those challenges are even more significant for Canadians living on low incomes. At Momentum, we recognize the wisdom that people without an adequate income can't get by and that people without assets can't get ahead. The proposed changes in the budget can help more people get by through better access to benefits via automatic tax filing, and will support Canadian children in getting ahead by improving access to critical education savings.
Thank you so much for the opportunity to share with the committee today.