C We’ve heard already the scary statistics about Canadians debts and savings. Canadians are more in debt than ever before, and these record debt levels mean we can’t even think about starting to save money. Recent research like the Financial Diaries in the US, and a national survey completed by TD Bank here in Canada, tell us that income volatility due to the changing nature of work is increasing affecting Canadians. Of those 37% of Canadians who experience moderate to high levels of income volatility are savings less and experiencing more financial stress. Research has also shown that over 50 % of Canadian households are asset poor – meaning they do not have sufficient assets to survive at the poverty line for 3 months. What that means is that over 50% of Canadian households are in trouble. While many families who live on low incomes struggle to meet basic needs, they miss out on opportunities to save and invest – opportunities that are critical in overcoming poverty. Without income, people are unable to get by and without assets, people are unable to get ahead. We call opportunities to save or invest, Asset Building. Having emergency savings or other liquid assets is especially important for those living on low incomes with a tight budget who have fewer opportunities to access credit. Savings and assets open the door to new sources of income

So how can we support people living on a low income to save So how can we support people living on a low income to save? Evidence suggests that families living on a low income will save more if saving is made easier and if they are given a clear financial incentive to do so. A key asset building strategy which focuses on both of these points that is being scaled in the City of Calgary through the Calgary Financial Empowerment Collaborative are matched savings programs. Matched-Savings Programs or Individual Development Accounts (IDAs) are designed to help people, particularly people living in poverty, gain greater financial independence and build assets for important life goals and long-term security. Essentially, IDAs are pathways out of poverty through saving and accumulation of assets. Participants of these programs receive matching funds as they save for asset-building purposes. They also learn financial literacy skills while building their social networks, gaining confidence and building their savings. Because they bridge the gap between intention and action by directing behaviour in subtle ways, matched savings programs are capable of driving “choice in desired directions, making an effective financial empowerment program. Michael Sherraden, author of Assets and the Poor, is credited with the concept of matched savings programs. Momentum has been running matched savings programs in Calgary since 1999, and through the Calgary Financial Empowerment Collaborative is one of 7 agencies accross the city running matched savings programs . Our agencies and programs are incredibly diverse -a Post secondary institution to a high school for pregnant and parenting teens, to a program focused on seniors. As with all of our work in the Calgary Financial Empowerment Collaborative, our approach has been to build the capacity of the community through funding, training and support.

So what needs to happen to continue to build and scale this work So what needs to happen to continue to build and scale this work? Given that the Government of Canada is committed to developing a Canadian Poverty Reduction strategy, I’m going to start with two ways the federal government can include asset building and financial empowerment in that strategy. The government’s definition of poverty should be expanded to include asset poverty, as well as income poverty. Liquid asset poverty compounds the experience of income poverty, and assets are key gateways to opportunity. Another opportunity is to implement proven solutions that help Canadians living on a low income to save for emergencies, as well as longer term goals. A successful approach that has been tested and evaluated in the US is to establish a tax-time savings program. Tax time is one of the few times people with low incomes receive a large lump sum of money 3) We heard from Minister McLean……….Without more stringent regulation of high-cost alternative credit products, Canadians will continue to experience financial exclusion and take on heavy debt loads – two major contributors to the lack of savings of Canadians.  Federally, the Gov’t of Canada needs to review and strengthen federal usury laws, and provincially ( ……echo whatever Minister McLean says ).