Tuesday, November 15, 2011
House of Commons Debates
OFFICIAL REPORT (HANSARD)
Tuesday, November 15, 2011
Hon. Scott Brison (Kings—Hants, Lib.): Madam Speaker, it is with pleasure that I rise this evening to speak in support of Motion No. 269, financial literacy, from the member for Edmonton—Leduc.
I commend the member for recognizing the importance of this issue as a priority for the federal government; however, I would say that it is somewhat inconsistent with the Conservatives' decision to, first of all, cancel all the agreements on early learning and child care with the provinces, because one of the most important areas of literacy happens to be establishing a strong foundation for learning at the very earliest stages. Early learning and child care are fundamental in that regard.
It is also inconsistent in some ways with the Conservatives' decision to cut funding for adult literacy programs, which was one of its first decisions as government.
That being the case, I do commend the hon. member for his recognition of the importance of financial literacy. I would note that he is encouraging a great deal of work in areas that are often considered to be provincial jurisdiction.
I would say that encouraging greater co-operation with the provinces and territories and working together with the provinces and territories in areas of shared interest is a good approach. It in no way, shape or form diminishes our respect for provincial jurisdictions; in fact, I would say to the hon. member that he is demonstrating a level of pragmatism that is atypical of some of his brothers and colleagues when it comes to working co-operatively with the provincial governments.
The report does recommend that:
all provincial and territorial governments integrate financial literacy into the formal education system...
|all provincial and territorial governments integrate financial literacy into the formal education system...|
that all provincial and territorial governments provide financial literacy professional development opportunities for teachers
|that all provincial and territorial governments provide financial literacy professional development opportunities for teachers|
that the Government of Canada, in partnership with provincial and territorial governments, integrate a financial literacy component into the Canada Student Loans Program...
|that the Government of Canada, in partnership with provincial and territorial governments, integrate a financial literacy component into the Canada Student Loans Program...|
that the federal, provincial and territorial governments help Canadians maximize the financial benefit from government programs for which they are eligible...
|that the federal, provincial and territorial governments help Canadians maximize the financial benefit from government programs for which they are eligible...|
I could go on about ensuring greater simplicity and clarity in the way programs are written and structured.
One helpful thing would be for the Conservatives to design their programs so that they would offer help to those Canadians in the greatest need. One constructive suggestion I have for the Conservatives is to look at some of the non-refundable tax credits they are offering for children's activities, for caregivers taking care of loved ones in the home and for volunteer firefighters.
Unfortunately, these tax credits are non-refundable; as such, they do not benefit the low-income Canadians who need the help the most. I would argue that it would be important, as part of financial literacy, for the government itself to have programs that are literate in terms of actually meeting the severe needs in many Canadian families. Clearly, simply understanding that lower-income families need help the most would instruct and hopefully educate the Conservatives as to the importance of making these benefits refundable.
Some of this work is already ongoing. As many members of the House know, the month of November is already financial literacy month. The site is sponsored by the Government of Canada's own financial consumer agency. There is a national calendar of events on the website.
For instance, on November 1 in my own riding of Kings--Hants, the workshop called “financially fit for the holidays” was held in Kentville at the Kings Regional Development Agency boardroom. This event was hosted by Credit Counselling Services of Atlantic Canada, a non-profit organization that provides confidential credit and debt repayment counselling services.
There is a growing need for credit counselling services across the country. The reality is that under the Conservative government, we have seen household debt soar to record highs; in fact, a new record was set in the last quarter: the average Canadian now owes $1.51 for every $1 of annual income.
A number of factors have contributed to this ballooning of household debt. Unemployment is part of the problem. A lot of Canadians have seen their full-time jobs disappear and be replaced with part-time work. According to Statistics Canada, there are now 578,500 fewer full-time jobs than there were in Canada in August 2008.
At the same time, the cost of living has gone up. Prices have gone up. It costs more for people to feed their families or heat their homes today, so many of them have turned to credit to try to make ends meet. They are worried today about their ability to pay their bills at current interest rates and terrified to think of what will happen to them as rates in the future will inevitably move up.
There is much discussion in Canada about rising housing prices. One of the reasons Canadians have taken on more debt is an overheated housing market in many Canadian cities and markets. One of the first actions taken by the current finance minister was to throw out some of the prudent rules for residential mortgages that were put in place by the previous Liberal government.
The Conservatives actually followed the lead of the Americans and introduced 40-year mortgages with zero down payment. I do not think that sent a very good message to Canadians, and it did not reflect sound principles of financial literacy from the government at that time. They have since done an almost complete reversal on those mortgage rules, and that is a good thing. They have scaled back the amortization period from 40 to 35 and then to 30 years, while reinstituting the minimum 5% down payment that the Liberal government had in place.
Some international economic commentary suggests that Canada does have a housing bubble in certain markets. The Economist magazine has opined on this, and when Martin Wolf of the Financial Times of London was in Ottawa earlier this fall, he said that despite what Canada's finance officials are saying, in fact there is a statistical housing bubble in Canada.
There are issues around retirement. The TD Bank recently published a report entitled “Canada's Aging Household Debt Burden”. The report has some startling revelations. It states:
The bigger surprise is that older Canadians have been growing their debt-loads at a considerably faster rate than their younger counterparts.
| The bigger surprise is that older Canadians have been growing their debt-loads at a considerably faster rate than their younger counterparts.|
In Canada, average debt loads in the past 10 years have increased twice as fast as income, but the rate is three times as fast for older Canadians, and many older Canadians simply cannot afford to retire. That is important.
It is also important to recognize the leadership provided by some international organizations in this area. The World Economic Forum has set up a task force under their YGL, Young Global Leaders, organization entitled “Learn Money”. It is focused on promoting access to financial literacy programs around the world. In fact, I would very much like to speak to the hon. member for Edmonton—Leduc about this to see if there are ways that we can potentially incorporate some of those ideas here in Canada and plug in nationally to what the World Economic Forum is doing.
World Economic Forum YGL member John Hope Bryant serves as an adviser on financial literacy to the World Economic Forum's Global Agenda Council and has also served as vice-chairman of the U.S. President's Advisory Council on Financial Literacy. He argues that following the global economic crisis, financial literacy is the new civil rights issue in the United States, and has said that:
To not understand the language of money, financial literacy, and to not have a mainstream bank account (or credit union account) in the 21st century, clearly an economic age, is to be an economic slave.
| To not understand the language of money, financial literacy, and to not have a mainstream bank account (or credit union account) in the 21st century, clearly an economic age, is to be an economic slave.|
In fact, he is saying that financial literacy is an issue of rights. Equality of opportunity is something we all take seriously as a rights issue, and clearly financial literacy and access to financial literacy education are fundamental to equality of opportunity. Whether it is helping Canadians to buy a house, manage their debt or save for retirement, there is a clear need for greater financial literacy in Canada.
We also know it is important that Canadians set aside enough to retire on, and there is a real question as to whether Canadians have been and are setting aside enough to retire on.
Even if they make that important step, where do they invest? It is a very complicated and complex investment decision. This is one of the reasons that opening up the CPP to a voluntary supplemental CPP would give Canadians access to a low-cost, well-diversified financial opportunity.