Good morning. Thank you for the opportunity to speak to you.
Thank you for all that you've done so far to address poverty in Canada, for example, the introduction of the Canada child benefit, supporting families who need it the most. Thank you for the opportunity to share our expertise and experience with poverty reduction with you today.
Momentum is a change-making organization that combines social and economic approaches to poverty reduction. We've been doing so for 25 years in Calgary, in Alberta. We use a holistic approach to poverty reduction with more than 3,500 people living on a low income annually. Our approach includes financial empowerment, entrepreneurship, and skills training.
At Momentum, everything we do is grounded in the community economic development approach, which means that we work with individuals, businesses, government, and systems to build a more inclusive and sustainable local economy that supports people to build a sustainable livelihood. One of the main ways we do this is through financial empowerment programs.
To bring our recommendations to life this morning, I'd like to share the story of Bulga Janchiv with you. He moved to Canada from Mongolia seven years ago and attended every possible program at Momentum that he could. He started with our trades training program, through which he learned to become a glazier. He began to grow his income and a sustainable livelihood for his family.
At the same time, he attended our financial literacy programs and workshops, learning more about money management. He opened a registered education savings plan for his two children and claimed the Canada learning bond, a grant of up to $2,000 per child for their post-secondary education.
Then he went on to take our matched savings program. Every month he saved as much as he could, and Momentum matched his savings four to one, such that he was eventually able to purchase a house.
Bulga then was able to build a sustainable livelihood in Canada.
We believe there are some key investments that can be made to support someone like Bulga. We also believe there are key policy changes that require no cost or investments and that can remove the barriers for someone like Bulga to build a sustainable livelihood.
We believe that poverty is always about income, but it isn't only about income. We think that the quote “without income you can't get by, but without assets you can't get ahead” reflects the required approach to sustained poverty reduction efforts. The national poverty reduction strategy needs to ensure that Canadians living on a lower income can grow both their income and their assets.
Our recommendation for this first problem of the quotation—not enough income—includes ensuring an adequate income for all Canadians. Living in poverty is a full-time job, going from program to program, from the food bank to the ticket transit office and many other programs. There can be little time for education and training. We must have a basic income to be able to meet our basic needs in order to get ahead, and such income supplements as the child benefit or the guaranteed income, aligned with other provincial benefits, can serve as a basic income for families, if they are expanded.
These programs can address an increasing trend of precarious employment, but only if families file their income taxes. We must ensure that all low-income Canadians file their taxes. The CRA volunteer tax program here in Calgary is a great example of ensuring that Canadians are accessing the much-needed income and benefits that they can only access by filing their taxes.
In conclusion of this recommendation, we are also supportive of research advocacy and current considerations under way for a guaranteed annual income or basic income pilots across Canada.
Our next recommendation is about jobs training for unemployed and vulnerable Canadians for stable and well-paying jobs. The current skills training environment does not do a good enough job of supporting these kinds of opportunities. Improvements and increases to the labour market transfer agreements and associated programs will help support skills and employment training for vulnerable Canadians, which is Momentum's area of expertise and focus.
A return-on-investment study indicated that the government's investment in our trades training program was returned in just three years through higher taxes paid by graduates.
In particular, though, the Canada job bank has not benefited those who experience barriers to employment. In Alberta, 98% of the Canada job bank funds have been used to support individuals who are already working. The Canada job fund agreements require an increasing proportion of transfer dollars to be allocated to the Canada job grant, so this mandated allocation is actually shifting funds away from existing programs like Momentum, where demand already far exceeds supply.
The federal government can strengthen training opportunities for vulnerable Canadians in provinces such as Alberta by amending the Canada job fund agreements and dismantling the Canada job grant program.
To address the second problem of the quote, which is about not having enough assets, we ask that you approve a financial empowerment framework for the national poverty reduction strategy. Financial empowerment is an evidence-based approach to ensure that people living on low incomes can reduce debt, increase their savings, and ultimately build assets through program and system-level interventions.
Our first recommendation in this area is to ensure that financial products and services are affordable for all Canadians. The increased use of fringe financial services across the country, such as payday loans, makes it very difficult for people to move out of poverty if they are trapped in debt.
We have the experience in Alberta of working to tighten regulations on payday loans, as well as working with financial institutions to develop more affordable alternative products. We recommend that the federal government work with the Canadian Bankers Association to update its 2014 low-cost account guidelines to align with new voluntary national bank account standards established in the United States, so that more Canadians can better access safe and affordable financial services that grow their financial well-being instead of erode it.
Our last recommendation is to invest in asset-building programs for low-income Canadians. The registered disability savings plan and the registered education savings plan are two examples of excellent federal tools that support this work. However, only 14% of eligible Canadians currently hold an RDSP. The Canada learning bond, a grant for low-income families to open an RESP, represents roughly $3 billion in unclaimed funds that over 1.5 million children could be using to further their post-secondary education.
At Momentum, we've seen first-hand the value and impact of these asset-building programs in supporting families to access an RDSP or an RESP, and the Canada learning bond. We know that these outreach efforts we have conducted have played a large role in increasing the Canada learning bond uptake. For example, when Momentum's Canada learning bond program launched in 2008, the uptake rate in Calgary was 21%, and as of March 2016, it is now 42%.