Thank you.
Mr. Chair and members of the committee, thank you for the opportunity to appear before you today as part of your study on consumer debt in Canada.
My name is Jeff Schwartz. I'm the executive director of Consolidated Credit Canada. We're an accredited non-profit credit counselling agency. We help Canadians consolidate and pay off unsecured debt, often at reduced or zero interest, while providing the financial literacy education that prevents debt crises before they begin.
In the past year alone, Consolidated Credit supported approximately 125,000 Canadians through education, counselling and debt management services. The average unsecured debt load among our clients was close to $20,000.
I want to focus my remarks on three points: the critical role of financial literacy, the need for consistent and equitable funding, and the reason accredited non-profit agencies must be central partners in any national strategy to address consumer debt.
Education is our best and first line of defence. By the time a Canadian reaches our office in financial distress, the damage is often done. The goal must be to reach them before that point—before the impossible choice between heating the home and making a minimum payment.
Accredited non-profit agencies like ours deliver preventative financial literacy every single day. We teach Canadians how to budget, understand credit and recognize the warning signs of economic abuse and coerced debt. This work is the foundational infrastructure for a healthy financial system.
This brings me to my second point—funding. Accredited agencies are primarily funded by financial institutions through a share of the debt we help our clients repay, which is typically between 10% and 20% of the principal. This model works. Banks recover debts that might otherwise default, and Canadians avoid insolvency. The economy benefits from households that remain financially stable.
The problem is that not every institution participates fairly. The majority of Canada's federally regulated institutions demonstrate leadership by contributing to this ecosystem. However, a small number of large institutions do not. These outliers benefit directly from our services, yet they do not invest a single dollar in the infrastructure that makes those outcomes possible.
This is a free-rider problem. It distorts the marketplace, strains the capacity of agencies like ours and ultimately harms the Canadians we are trying to serve. Our internal estimates suggest that if these non-participating institutions contributed fairly, consolidated credit alone could support an additional 21,000 Canadians annually, while significantly expanding preventative outreach to underserved and high-risk populations.
We are asking the government to use the power of moral suasion, through mechanisms like the proposed code of conduct for the prevention of economic abuse, to set clear expectations that all participating banks would provide annual financial support to accredited non-profit credit counselling agencies. Transparency is a powerful tool. Public disclosure of institutional participation would encourage fair play without the need for prescriptive legislation.
Finally, I will speak to our role as essential partners in the financial protection ecosystem. Accredited non-profit credit counselling agencies are uniquely positioned to serve Canadians in financial distress. We provide client-centred care.
When a survivor of economic abuse needs to untangle coerced debt from their credit profile, they need expert intervention, not a pamphlet. Government departments, financial institutions and regulators should view us not as an afterthought, but as the primary delivery mechanism for financial literacy and debt remediation.
We urge you to recommend that departments, ministries and financial institutions formalize their partnerships with us and that the funding to sustain this work be consistent, equitable and transparent.
In conclusion, Canadians are asking for a fair chance to learn, recover and build a secure financial future. With consistent funding and genuine partnership, accredited agencies like Consolidated Credit can help tens of thousands more Canadians each year avoid the dead end of insolvency.
Thank you. I welcome your questions.