Don Stewart presentation Whitehorse EN

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Don Stewart presentation Whitehorse EN Powered By Docstoc
					Finance Ministers’ Meeting
Task Force on Financial Literacy

December 18, 2009

Whitehorse, Yukon



                               Donald A. Stewart
                                           Chair




                                                   1
Overview

   Definition and Scope of Financial Literacy
   Key trends
   Canada’s Task Force on Financial Literacy
   Observations to date
   Task Force in 2010
   Concluding observations




                                                2
Our definition of financial literacy




    Financial literacy means having the
 knowledge, skills and confidence to make
      responsible financial decisions.




                                            3
Scope of financial literacy

   Lifelong education
   Consumer behaviour
   Borrowing
   Saving
   Retirement
   Protection




                              4
Broadly-based concern


  Financial security is important to Canadians:

     Six out of 10 Canadians say they worry about
     their financial future

     23% so much so they are losing sleep over it




  CMA, 2009



                                                    5
Debt to income ratio increasing 1990 - 2009


                     Debt to income annually




 Statistics Canada




                                               6
Canadian Task Force on Financial Literacy

   Established June 2009
   13 members from business, communications,
   community and educational sectors
   Representation from across Canada
   Prescribed mandate
   Provide advice and recommendations to
   Canada’s Minister of Finance on a national
   strategy by December 2010

        www.financialliteracyincanada.com


                                                7
Task force mandate for national strategy
  Overall objectives, as well as a focused, concrete
  plan of action

  How to leverage existing resources

  How best to promote financial literacy

  A framework for collaboration among all
  stakeholders

  How stakeholders should collaborate

  How to assess progress in strategy implementation



                                                       8
Task force members
Chair                        Vice Chair
Donald A. Stewart            L. Jacques Menard, O.C.
Chief Executive Officer      Chairman
Sun Life Financial Inc.      BMO Nesbitt Burns

Members
Laurie Campbell              Evelyn Jacks                  Greg Pollock
Executive Director           President                     President and CEO
Credit Canada                The Knowledge Bureau          Advocis

Marcel Côté                  Ruth Kelly                    Bill Schwartz
Partner                      President and CEO             Principal
SECOR Consulting             Venture Publishing Inc.       Polestar Communications Inc.


Pat Foran                    Janice MacKinnon              Jean Vincent
Journalist and Author        Professor of Fiscal Policy    President and General Manager
                             University of Saskatchewan    Native Commercial Credit
                                                           Corporation
Edward (Ted) Gordon          P. Mitchell Murphy
Financial Security Advisor   Career Education Consultant
Freedom 55 Financial         Western School Board
                             Prince Edward Island




                                                                                           9
Task force observations

   An extremely broad topic
   Many stakeholders
   Immense amount of information exists
   Vital role of behavioural economics
   Federal / Provincial / Territorial dynamics
   Developing framework




                                                 10
International experience
     Australia
       Financial Literacy Foundation – 2006
       Functions transferred to Australian Securities and
       Investments Commission – 2008
     New Zealand
       National Strategy for Financial Literacy – 2008
       Financial Knowledge Surveys in 2006 and 2009
     United Kingdom
       Joint Action Plan for Financial Capability – 2008
       National Strategy for Financial Capability Revised Plans
       and Targets - 2009/2010
     United States
       Taking Ownership of the Future: The National Strategy
       for Financial Literacy – 2006
       US Roadmap to Enhancing Financial Literacy: An Updated
       National Strategy – due in 2010

                                                                  11
Many stakeholders




                    12
Behavioural economics

   Offers a blend of psychological and economic
   insights into household financial decisions
   Provides a framework for understanding
   inconsistent or irrational behaviours
   Explains why despite factual knowledge, people
   may still make poor decisions
   Links between knowledge and action
   Suggests alternative ways to design policies and
   programs to influence action in right direction




                                                  13
Laying the foundation: Formal Education




                                      14
Developing framework of Task Force

 The Education System’s Vital Role
 Understanding Consumer Behaviour
 Debt and Borrowing
 Saving and Investing
 Planning for Retirement
 Communications and Technology
 Preventing Financial Fraud
 Evaluating National Progress on Financial Literacy




                                                  15
      Statistics Canada
      Canadian Financial Capability Survey

Demography                Retirement Planning
Labour Force              Assets and Debts
Ongoing Expenses          Income
Financial Management      Financial Choices
Major Expenses            Subjective Personal
Postsecondary Education   Assessment
Funding                   Objective Personal
                          Assessment




                                                16
Milestones in 2010



                Stakeholder engagement

         Release
       consultation
        document
                             Public
                          consultations
                                          Final report
                                          to Canada’s
                                           Minister of
                                            Finance



          Feb             April - May             Dec
         2010               2010                 2010




                                                         17
Public consultations across Canada



                                              Iqaluit
  Whitehorse




                          Yellowknife

                                                                            St. John’s



                                                                      Charlottetown
                Calgary                                   Moncton
                                                                        Halifax

                      Saskatoon                               Quebec City
    Vancouver                                             Montreal
                                   Winnipeg   Ottawa

                                                        Toronto




                                                                                    18
Concluding observations

   Financial literacy is a vital life skill
   Education is necessary but not sufficient
   Canadians need to build better financial habits
   Leveraging existing resources is key




                                                     19