Gary Rabbior, President,
Canadian Foundation for Economic Education
Task Force on Financial Literacy
May 11, 2010
Alberta Room, Royal York Hotel
110 Eglinton Avenue West, Suite 201, Toronto, Ontario M4R 1A3
Tel: (416) 968-2236; Fax: (416) 968-0488; Toll free: 1-888-570-7610; E-mail: firstname.lastname@example.org; Web site: www.cfee.org
Thank you for this opportunity. I am going to assume that there has been opportunity to review the
written remarks that were submitted earlier. If that is an incorrect assumption, I apologize and I would
be pleased to elaborate on any of the points noted in the submission if you have questions after my five
Let’s begin with an apparent fact – Canadians need to increase savings. In a report out today, as you
may have seen, the Certified General Accountants of Canada showed household debt in Canada has
reached a record of $1.41 trillion – an average of $41,700 per person. We are at 205 times the 1989
level. We rank first among 20 OECD countries in our debt-to-income ratio hitting 144%. Canadians need
to reign in their use of debt and be better prepared for the future. Now, some may argue that this is not
the time to discourage spending and encourage saving. Our view is that consumers have carried this
economy for a long time. Then, when we hit rough waters, government spending stepped up to
moderate the fall. Now, as we gain momentum in recovery, it is time for business to step up. Aggregate
demand in our economy is comprised of C + I + G + (X – M). It is “I’s” turn – and funds for investment
come largely from household savings. With a stronger dollar, it is time for businesses to invest – to
improve productivity – and to prepare for their future success. We need to allow consumers to
reposition, reduce debt, and prepare for a renewed role in the future.
So I do not feel you need to be apologetic to anyone if your efforts help encourage saving at this time.
The pressure should be on businesses to invest at this time – not over-extended consumers who need to
reduce their debt burden.
We believe it is a time to innovate and provide new incentives for people to save and to become more
economically and financially capable. The TFSA is one example. But, without giving it extensive thought,
couldn’t we: set milestones in RRSP accounts for lower income Canadians. Then, if the milestones are
achieved, the saver could get an incentive amount added from the government; couldn’t we adapt the
TFSA to provide a version of it for education savings. This could enable lower income Canadians to
access the CESG and CLB via a more simple savings vehicle than an RESP; couldn’t we provide a tuition
reduction for students who take a program in economic and financial education; couldn’t we enable
reduced rates of interest on credit cards if there are two years of on-time payments; and so on. I am
sure that if we set our minds to it, we could devise means to encourage positive economic and financial
behaviours – however we may come to define them.
We would advocate for use of the term “financial capability” rather than “literacy.” The challenge we
face entails affecting attitudes, attributes, and behaviour – which we feel is captured more effectively by
financial capability than financial literacy – which tends to imply a focus on knowledge.
We believe economic capability needs to go hand in hand with financial capability. Financial capability
provides the tools – but economic understanding provides the context. Tools, on their own, do not
guarantee good decisions – we need simply ask those who locked into mortgage rates of 22% for five
years back in the early 1980s.
Consider some of the most important topics that affect our lives today – the labour market and getting a
job to get money, career choice to help get a job, interest rates, inflation, productivity, global markets
and interdependence, the value of the dollar, our government debt and deficits, and so on. All of these
affect the economic and financial decisions of Canadians – and will affect their well-being. Some basic
economic understanding will also be essential for Canadians as they try to build a successful economic
We need to establish some clearly defined target outcomes. What are we aiming to achieve and why? If
we achieve success, how will things be different?
We need to lay a foundation of knowledge, skills, attitudes, attributes, and behaviours in our schools.
Most of the provinces are willing and ready to act. You may know that we are working with some to
integrate a basic economic and financial education into the compulsory core curriculum. We have
developed a model – the Building Futures model – that all stakeholders seem to find appealing and
acceptable. We encourage the federal government to find ways to work with and assist the efforts at
the provincial/territorial level.
And finally, to the challenge of a national strategy. If I was the God of Economic and Financial literacy –
first of all, I would change my name to be the God of Economic and Financial Capability – and then I
would set about to do the following.
Create a Centre for Excellence with a focus on economic and financial capability. Assign a mandate and
set of tasks to the Centre as follows:
- Collaborate with partners and stakeholders across the country to establish a set of goals for
what we hope to achieve
- Work with the same group to establish a set of criteria by which we can assess our success over
- Collaborate with Statistics Canada to devise the best way to monitor our progress as a country in
achieving our goals
- Establish and coordinate a global working group to enhance international collaboration, the
sharing of expertise, and the incentive and means by which to innovate
- Establish a process by which to effectively assess resources and programs. Invite organizations
to submit their resources and programs as candidates for excellence. Upon evaluation, if they
achieve a standard of excellence, outline the target audience, identify the learning outcomes,
and post them for the world to see – and use if they can
- Identify gaps, needs, and opportunities for innovation. Work with the best talent in the country
to produce new resources. Devise a means to provide easy access to any and all who would like
to use them. Set the highest standard for resources produced by the Centre
- Establish the Clear Language Centre that will assist governments, NGOs and others who are
producing communication tools and materials. Offer to have materials reviewed by clear
language editors with subject area expertise. Offer assistance to ensure materials are
understandable by the target audience
- Engage Canadian talent to develop new workplace learning materials. Aim to engage employers and
unions to provide opportunities for employees to improve their economic and financial capability via
new, innovative programs offered in the workplace
- Collaborate with Service Canada, or a similar national network – such as community colleges, or
the YMCA – to provide widespread public access to free, unbiased, non-commercial,
knowledgeable help and guidance. Help Canadians with their financial challenges, decisions, and
options before they make decisions or take action in a manner similar to the Money Guidance
network being created in the U.K.
- Establish a Media Centre that would not only be a resource to the media for their stories and
event coverage but would also provide training and professional development assistance to
media staff to enhance their economic and financial capability
- And finally, to manage an Innovation Fund to which the best talent in Canada could apply for
support to undertake new projects and initiatives that can address needs in Canada as they exist
and as they will evolve.
The responsibilities and tasks that I have suggested be assigned to such a body, along with points raised
in our submission, constitute some of the most important elements that we believe are relevant to a
national strategy. Whether they are captured under the single roof of such a centre for excellence, or
assigned to the talent pool that exists in Canada is, of course, your call. But I reiterate that, if a new such
centre or entity of some sort is established, its mandate should be to facilitate, draw upon the talent we
have in Canada, help coordinate, help generate, be a catalyst, and initiate innovation. It should not, in
my opinion, erect walls within which it will aim to do the job. It should be full of windows and doors that
reach out, invite in, and engage Canadian expertise and experience. Those who are active in this field in
Canada should celebrate its creation, not fear that it will compete with their efforts and overwhelm
them. It should be seen as emblematic of a vision for the future of economic and financial capability in
Canada that every interested and involved person and organization will want to be associated with –
and will clearly recognize the potential benefits it can provide to the good work they are already doing.
Thank you for your time and this opportunity.