April 20, 2016
Federal Reserve Bank of Chicago
Providing a Real and Fair Chance at Success
Speech by the Honourable Bill Morneau, Minister of Finance, at the 10th Annual Financial Literacy Summit
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Hello and thank you for joining me here this morning—and thank you for that very generous introduction.
What a privilege it is for me, on my first official visit to Chicago as Canada’s Finance Minister, to open the 10th Annual Financial Literacy Summit.
As you just heard, I’m a relatively new Finance Minister, and politician.
So I wanted to start by saying that not very long ago, I would have been in one of your seats—literally—because dealing with financial literacy issues has been an important part of my life’s work.
I built Canada’s largest human resources firm, and largest pension administrator, over the last 20 years.
Bringing information to employees on their financial situation, and their retirement possibilities, was my full-time job.
So, in a very personal way, it’s great to be here.
If I can be a positive part of a discussion on financial literacy, I’m delighted.
I know how important this is, and how difficult.
I know that getting information to people to make appropriate personal decisions requires effective communication techniques, and investment in technology.
That’s a perspective I bring to my new role.
Now, as you know, Chicago isn’t too far from home for most Canadians, but I have logged many, many flight miles to make it to here today.
My journey started on March 22nd in Ottawa when I tabled our new government’s first budget five months after winning the federal election.
It’s a budget we’re obviously very proud of, not least because it puts people first—something I know you here in this room believe in strongly.
And it’s given me the great privilege to travel not only to many regions of my own country, but also internationally to tell Canada’s story.
From New York, to London, to Paris, to Washington for Group of Twenty (G20) and International Monetary Fund meetings just this past weekend, I have stood in front of audiences like this one, speaking at length about our fierce commitment to Canada’s middle class, and our plan for strong, inclusive growth.
Today, I want to present some of the major features of this plan through the lens of financial literacy, and the rapid, innovative change underway in the financial sector.
After all, financial literacy and financial well-being go hand in hand.
At the heart of our plan is giving every Canadians a real and fair chance at success.
We believe, as we’ve said many times, that when you have an economy that works for the middle class, you have a country that works for everyone.
Our plan puts more money directly in the pockets of the middle class through tax breaks and child benefits.
It takes advantage of our fiscal space to make historic investments in infrastructure over the next decade.
It takes steps towards a more innovative economy and—crucially—it provides help so that the most vulnerable members of our society—those working hard to join the middle class—benefit from the economic growth that we will create together.
But in order to create the kind of truly inclusive growth that we aspire to, we need to ensure that families have the knowledge and the tools to fully participate in the economy.
And that’s where financial literacy and consumer education come in. That’s where you come in.
The bottom line is if we want our citizens to make smart financial decisions when buying a home, paying for their kids’ education or saving for retirement, then we have an obligation to make sure that two crucial conditions exist:
One: We need to ensure that the broader economy supports those goals.
Two: We need to make sure people—families, consumers—are empowered to take full advantage of that growth.
Having financially literate citizens making smart choices ultimately supports a stronger economy, in which people are able to plan and save throughout their lives, and realize the full potential of all their hard work.
But the relationship between economic well-being and a financially literate population is not—as you all know—a static one. Through it all we must ensure consumers are well served.
The Government of Canada plays an active role promoting and advancing financial literacy, through the Financial Consumer Agency of Canada (FCAC). In fact, I’m pleased that FCAC’s Commissioner, Lucie Tedesco, is here with us today.
We know this is an area of constant change.
The advent of digital currencies, peer-to-peer lending, crowdfunding and electronic payments is changing the way people budget, spend, save and invest.
Changes in government and organizational retirement plans make the delivery of critical information more important—and more challenging.
Dynamic modelling tools are necessary, spurring a need for efforts in financial literacy and education to keep up.
We need to ensure that consumers continue to be empowered and protected.
This is especially true—and particularly difficult—for those who may not have access to emerging technologies, or who need tailored information and products that meet their needs.
I would like to specifically highlight our most impoverished citizens, youth and seniors as populations who are particularly vulnerable in this area.
Technology can challenge us to be creative in meeting needs.
But we want to be sure that as technology changes the landscape, no single group is left unintentionally behind.
That is why, as part of Budget 2016, we announced our intention to modernize our financial consumer protection framework for banking, by clarifying and enhancing consumer protection rules, and ultimately making it more responsive to Canadians’ changing needs.
We also made significant commitments to improving government delivery of information to citizens in our budget.
Better government information technology systems are a basic building block for the delivery of information to Canadians on our social programs.
But financial well-being isn’t limited to the choices people make.
Governments also have a role to play in making sure the financial sector remains resilient and stable.
That’s why our budget highlighted our intention to undertake a review of financial sector legislation.
This review is a good occasion to speak to individuals, as well as industry leaders and experts, and hear their thoughts on how best to strengthen our regulatory framework so that our sector remains among the world’s soundest.
This is a worthy undertaking when we consider how our plan achieves the larger objective of economic well-being, particularly for the middle class.
To that end, our plan makes strategic, targeted investments in areas that can grow our economy over the long term.
And it treats diversity, clean technology, business growth and innovation as harbingers of economic success.
We’re confident we’ve got it right, because—of the many things we have done since taking office—the thing we have done most often is listen.
Listening is the better part of leadership.
We were touched to experience, over and over again, the commitment Canadians feel towards their communities, and the hopes and aspirations they reserve for their children.
That’s why our plan to deliver benefits for families with children makes more of a difference for families than any other social program since the introduction of Canada’s universal health care system.
Through the Canada Child Benefit, we will give 9 out of 10 families with children more money for everything from healthy food, paying the rent, or buying new clothes for back to school.
Families benefitting will get an average of $2,300 more annually.
By targeting our actions to those families with children who need it most, we not only strengthen Canada’s middle class, we will also lift hundreds of thousands of children out of poverty.
That means greater financial stability for thousands of families.
We’ve provided the basis for a better family life—if citizens make the right choices on how to help their family—which is where financial literacy comes in.
We also heard the calls of organizations like the International Monetary Fund (IMF), the Organisation for Economic Co-operation and Development (OECD), and some G20 members—who have urged countries like ours to use available fiscal capacity to make targeted investments that boost the economy now, and in the future.
And then we took the very best of what we heard, and transformed those many voices into a platform for action.
So I am not surprised that Canadians have responded with such enthusiasm to our plan, or that the international community is holding us up as an example to follow.
This is the plan that Canadians wanted. It is the plan they needed. And it is a plan that we will deliver on.
From Wall Street to the IMF to the OECD, and the G20—people know we’re on to something.
The Financial Times calls Canada a “glimmer of light” for our wise use of fiscal policy to invest in our economy—a clear sign, they say, of our understanding of what we need to do.
The Wall Street Journal called us the poster child for the IMF’s global growth strategy.
And recently, Christine Lagarde of the IMF praised Canada’s approach, using the fiscal space available to us, but in a manner that is credible, targeted and realistic.
So, if financial literacy means making the right financial choices to achieve a given goal, then Canada has become a worthy student.
Like anyone else facing complicated financial decisions, our government has collected the very best information.
We have taken the time to listen, to consider and review.
We have articulated our goal of inclusive growth, and preparing Canada for success in the 21st century.
And we have begun to use the tools at our disposal to take steps towards achieving that.
Now—fiscal policy is vastly more complicated than choosing the right credit card or mortgage.
But setting a goal, and budgeting wisely to achieve it—whether it’s buying a first home, or paying off student loans—are precisely the kinds of skills financial literacy education aims to instill.
Managing money and debt wisely, planning and saving for the future, and preventing and protecting people from fraud and financial abuse are not just core principles of a successful financial literacy curriculum.
They are also immutable conditions for us, as we work to achieve our vision.
Canada is ready to lead by example—to show Canadians, and the world, that it is possible to grow the economy while putting the middle class first.
To take a fundamentally new approach to fiscal policy that reflects our capacity, but most especially, our willingness to act.
To identify areas like infrastructure and innovation, where our investments have the greatest potential to help Canadian middle class families, while providing strong economic returns for the long term.
And like a tide that lifts all boats, so too will these benefits be shared.
Innovation is a critical part of our plan and vision.
We are on the threshold of a new era, where traditional industries must adjust to the rapid pace of change, and new technologies are transforming the global economy.
It is clear that the people, companies and countries who create the next economy will prosper, and our government is ready to do its part.
We want to be on the leading edge of the changes happening in the global economy—not just because it is good for tomorrow, but because it is good for today.
In the next year, we will define a bold new Innovation Agenda that will position Canada as a centre of global innovation.
We need fresher, broader and more collaborative efforts to embrace the innovation opportunities that change brings.
Working together is the Canadian way.
Public sectors must work together with the private sector to help create the conditions for success.
Whether that be an innovative new financial technology (fintech) budgeting app that helps young people save for their education, or a scientific breakthrough with the potential to help people in Canada and around the world.
This is the power of collaboration.
Financial innovation in particular will mean governments and regulators working together to ensure new innovations are consistent with principles of safety and soundness, and consumer protection.
I am confident this approach to fostering innovation will bring about economic growth now, and in the years to come. And, crucially, allow more people to benefit from this growth.
Let me conclude by emphasizing something I said at the very beginning.
Canada’s new government believes that we all deserve a real and fair chance at success.
And I want to thank the people in this room for the role you play in helping consumers—everyday families—achieve this goal by making informed financial decisions.
Whether you are an innovator, an educator, or part of the financial sector, we all have an opportunity to contribute to shared success in positive ways.
We recognize financial literacy is an essential part of building a stronger economy, and of promoting inclusive growth, where no single group gets left behind.
Improving potential outcomes for citizens is an important role for government, but our efforts will only be successful if people are capable of deciding the best way for them and their family to succeed.
Financial literacy, together with consumer education and protection, is critical. That is why your work is central to our collective future prosperity.
Canada’s vision of the future is bold and ambitious, and we are prepared to take new and necessary steps to achieve it.
We are taking bold action so that our children may inherit a more prosperous and more hopeful Canada.
And I am so thankful to have your support in helping us achieve this goal.