Good morning, everybody. We're going to get started here. Before I forget, we do have a very brief amount of committee business that we are going to need to deal with at the very end of this meeting. I will have to ask, and I will remind everybody at the end that we're going to have to clear you out fairly quickly. We don't want to kick you out, but we're going to have to kick you out. We're also going to be interrupted by bells, as well, with some votes today. I'm not going to spend a lot of time on introductions. We'll get right to it.
Pursuant to Standing Order 108(2) and the motion adopted by the committee on Monday, June 13, 2016, the committee is resuming its study of poverty reduction strategies.
Today we have a number of witnesses. From Statistics Canada, we have Heather Dryburgh, Director, Tourism and Centre for Education Statistics, and Klarka Zeman, Senior Analyst, Tourism and Centre for Education Statistics. From the Financial Consumer Agency of Canada, we have Jérémie Ryan, Director, Financial Literacy and Stakeholder Engagement, and Julie Hauser, Partnership and Stakeholder Engagement Officer.
From the Department of Indian Affairs and Northern Development, we have Paula Isaak, Assistant Deputy Minister, Education and Social Development Programs and Partnerships, and Jonathan Allen, Deputy Director, Education and Social Development Programs and Partnerships.
Finally, from the Department of Employment and Social Development, we have Mary Pichette, Director General, Canada Student Loans Program; Jessica Kerr, Director General, Canada Education and Savings Program; and Monika Bertrand, Acting Director General, Employment Program, Policy and Design Directorate.
That's a lot of people.
Thank you all for being here and welcome. We're going to get going right away. I believe we're going to start with Statistics Canada. If you could keep your remarks to a crisp seven minutes, that would be very much appreciated. Thank you.
Thank you very much. It's a pleasure to be here this morning.
I am going to go through the presentation, which I believe was distributed.
In the centre for education statistics at StatsCan, we are currently undertaking a number of innovative new initiatives around data for education that will help us better understand the pathways people are taking through the education system, through college, university, or the trades, and on into the labour market.
I'm going to draw today on some of these initiatives and other data sources to bring evidence to your questions on whether some poverty reduction strategies in education are making a difference for vulnerable populations. I'll move fairly quickly through the presentation to keep to my timeline.
Starting with access to education, one factor affecting access, as seen in our youth in transition survey data, is parents' income. As parents' income increases, youths' participation in post-secondary education also increases. However, if you look more closely at the difference between the lowest and the highest incomes, factors such as parents' education and parents' expectations of their children explain much of the participation gap there. In fact, the financial constraints account for only about 12% according to the study.
Although income is a barrier, we know from our survey of financial security that parents are increasingly saving for their children's education. If we think of the RESP as a school-based poverty reduction strategy, the data here show that since the Canada education savings grant was introduced in January 1988, there was an increase in families saving for their children's post-secondary education, even at the bottom income level, between 1999 and 2012.
The cost of post-secondary education, however, is increasing. From our tuition and living accommodation costs survey, the data show that undergraduate tuition fees have increased in almost every province between 2008-2009 and 2016-2017, except in Newfoundland and Labrador and Alberta. From our 2013 national graduate survey, we know that more than four out of ten post-secondary education students who graduated in 2010 had debt on graduation.
What we don't have on this slide is the current financial support data from ESDC and the provinces and territories. We are currently negotiating with both levels of government to get this data and to integrate it into our holdings in order to have a better picture of the impact of costs on access to education and of what those real costs are.
There are many reasons people may seek further skills training or retraining to equip themselves for a better employment situation, but today I'd like to draw your attention to evidence that shows how basic training for literacy and numeracy is also important when thinking of skills training.
Recent immigrants, unattached non-elderly persons, aboriginal people, lone parents, and people with activity limitations, which are all groups at risk of low income, have higher proportions of low literacy scores compared with those of the overall population of all individuals. Basic training for literacy and numeracy is also important when we think of skills training.
Another factor affecting people's likelihood of getting employment is their ability to speak English or French. From the longitudinal immigration database, if we tease out the impact of official language skills on earnings by taking into account all kinds of things such as the year you landed, class of immigration, age, education, source region, experience, and geography, the language profile still has an impact on the earnings of immigrants. This graph compares the earnings of immigrants with various language abilities with the earnings of immigrants who had English as their mother tongue. Language training is critical to improving earnings for recent immigrants without English as their mother tongue.
Apprenticeship offers another avenue to employment and better income. Our registered apprenticeship information system shows that greater proportions of both younger and older Canadians are registering as apprentices in 2013 versus in 1995. The 2016 national apprenticeship survey results that will be released in March 2017 will help us better understand the changing age profile as well as barriers to completing programs, and much more.
The next slide shows a gender picture, which I think it is important to note. Women make up only 12% of people with apprenticeship certificates. Among these women, a third are hairstylists and aestheticians. In general, earnings in the top female trades are substantially lower than in the top male trades. For example, hairstylists and aestheticians earn around $25,000 a year whereas electricians earn over $70,000.
Now let's look at the relationship between education, employment, and income. For both men and women, those with less than high school education have the lowest earnings and those with a university degree have the highest earnings. So the relationship is pretty clear.
The 2011 national household survey data show that the tendency to get higher education is increasing for aboriginal people, but this chart, which uses labour force survey data, shows that as education levels of aboriginal people rise, their unemployment rates go down and become similar to those of the total population. That's looking at the off-reserve aboriginal groups. On the next slide you can also see similarly smaller gaps in employment rates for people with disabilities compared to the general population as education levels increase.
To conclude, in poverty reduction strategies, it seems clear that the Canada education savings grant has improved savings for families at all income levels, but importantly for those with the lowest incomes. Literacy training and English and French as a second language training are clearly important to equipping vulnerable groups for employment. Of course, you can think of higher education itself as a way to reduce poverty, and we can see benefits to those at risk of low income who obtain post-secondary credentials.
First of all, I would like to thank you for the invitation to appear before the committee today.
The Financial Literacy Leader, Jane Rooney, is unable to be here as we are hosting our first research symposium in Moncton, New Brunswick. Today Ms. Rooney sends her regrets and her salutations to committee members.
Your committee's work is important, and we appreciate the opportunity to contribute to this discussion on poverty reduction. Financial literacy is a critical skill and one of key importance when talking about poverty reduction.
Every day, low-income Canadians are faced with difficult financial decisions, and have difficulty making ends meet. They are struggling to keep up with bills and other payments. We know many Canadians are living paycheque to paycheque. As well, precarious and part-time employment are on the rise in some cities. Across all income brackets, Canadians have too much debt and are not saving enough. We should care about this for many reasons. Debt and unstable income lead to financial stress, which impacts mental and physical health. Financial literacy plays a vital role in improving the financial well-being of all Canadians, including those with low incomes.
Established in 2001, the Financial Consumer Agency of Canada is a regulatory agency that works to protect Canadian consumers. We do this by supervising federally regulated financial institutions to ensure that they comply with federal consumer protection measures and that they comply with voluntary codes of conduct and respect the public commitments they have made. We also work to promote consumer awareness of the obligations of financial institutions to consumers of financial products and services.
In 2007, the Government of Canada expanded FCAC's mandate to include financial literacy.
In 2014, the government appointed Canada's first Financial Literacy Leader, Jane Rooney, to coordinate national efforts and collaborate with organizations across the country to deliver concrete initiatives that strengthen the financial knowledge, skills, and confidence of all Canadians. Within the first year of her appointment, we held three rounds of consultations. We met with hundreds of organizations, as well as individual Canadians.
Our first phase of consultations focused on the needs of seniors; the second phase looked at issues affecting newcomers to Canada, people living with disabilities, low-income earners, and indigenous peoples; and the third phase examined the needs of young Canadians and adults more broadly.
We heard that many people lacked access to affordable financial services and products, such as no-cost and low-cost accounts. We heard how some people have difficulty obtaining the identification required to open bank accounts and how people with low incomes may have limited access to short-term credit products at an affordable cost. These hurdles can lead people to high-cost cheque-cashing services and payday loans.
We also heard about the importance of accessing government benefits and programs, such as RESPs, the Canada learning bond, old age security, and GIS, and the importance of filing one's income tax through the community volunteer income tax program so that Canadians can access government benefits they are entitled to.
We took this information from the consultations and developed a national strategy for financial literacy called “Count me in, Canada”. It's a call to action for all Canadians and those organizations that work with them to strengthen their financial literacy.
The strategy was developed with the help of a national steering committee made up of 15 experts from across Canada. It aims to help people manage their money and debt wisely, to plan and save for their financial future, and to prevent and protect themselves from fraud and financial abuse.
Financial literacy is a shared responsibility. Everyone has a role to play. In order to implement our strategy, we work with a number of stakeholders, including 11 regional financial literacy networks, of which many work on poverty reduction. We consult regularly and work with the provinces and territories, and we collaborate with many private and non-profit organizations across the country as well.
We work with our federal counterparts on an interdepartmental committee on financial literacy. The committee is working to integrate financial literacy concepts into the various federal government programs. To date, we have coordinated a national campaign to promote direct deposit for tax refunds.
We are also looking at the possibility of including a money management training program in student loan programs. In addition, we are developing a strategy to reach out to indigenous people and increase their financial literacy.
We are working with the Canada Revenue Agency to promote the community volunteer income tax program, which provides information sessions to eligible individuals with a modest income and a straightforward tax situation to help them prepare their tax returns.
We collaborate with groups such as Prosper Canada, a non-profit organization that promotes financial literacy, in part through the financial empowerment champions project for vulnerable Canadians.
It is timely that we are meeting today. November is Financial Literacy Month. Since it was first held in 2011, community-based organizations, volunteer groups, agencies from all levels of government, employers, and private companies have been involved in FLM, a nationwide initiative that promotes financial literacy events, resources, and activities for all Canadians.
We have accomplished a lot over the last couple of years, but there is still much work to do to help Canadians budget, save, manage their money, and ease their debt loads. Research plays a key role in understanding the financial literacy needs of Canadians. Statistics Canada carries out the Canadian financial capability survey for the FCAC. We have benchmark data from 2009 and 2014. Our most recent data shows that 34% of newcomers, 37% of low-income Canadians, and 50% of indigenous peoples living off reserve struggle to pay or are not keeping up with bills and payments.
One concern we have is the increased reliance on payday loans. The proportion of Canadians using payday loans is small, but it has more than doubled, from 1.9% in 2009, to 4.3% in 2014. Payday loans are used primarily by low-income Canadians.
Last month, the FCAC published a study showing that many payday loan users are unaware of the costs compared to the costs for alternatives. Also, most are using them for necessary expenses, such as paying for rent and groceries. We know that giving consumers the knowledge, skills, and confidence to manage their money gives them more control. Our research tells us that confidence in particular plays a key role. If people are more confident, they are more likely to shop around, ask questions, negotiate, and use products and services that can help them manage their money and save, such as RESPs and TFSAs.
We know that a budget is a powerful tool and is key. Our research tells us that 46% of Canadians budget, and among those who do, 93% say that they usually or always stay within their budget. When they had the information about the importance of budgeting and how to do it, they began budgeting and sticking to it. However, while budgets can help, they are only part of the solution.
This committee's poverty reduction strategy will bring out ideas to help Canadians with low incomes enter the workforce and post-secondary programs so they can support themselves and their families. Poverty reduction should be about helping people gain employment, housing, financial, and overall well-being.
We see a strong link between poverty reduction and financial literacy. We believe our strategy aligns with your goals, because it focuses on giving Canadians knowledge, skills, and confidence as they enter the workforce, upgrade their education and skills, and plan for unforeseen circumstances that they will face throughout their lives. Financial literacy can help people access benefits, gain new opportunities, and hope for a better life.
Good morning, Mr. Chairman and members of the committee.
I would like to thank the committee for the invitation to appear today. I would also like to acknowledge that we are gathered on traditional Algonquin territory this morning.
As budget 2016 rightly noted, indigenous people generally do not enjoy the same quality of life as non-indigenous people in Canada. Poverty is a barrier that is preventing indigenous people from reaching their full potential and from fully participating in Canadian society. The well-being of indigenous communities is suffering as a consequence.
The department has done work in various areas to address long-standing issues related to poverty in indigenous communities, including education, training, employment, as well as financial assistance and other social supports. These and many other issues that indigenous people and communities are facing contribute to maintaining the high poverty levels and creating an obstacle to prosperity and the socio-economic well-being.
The department recognizes that these challenges are long-standing issues and, therefore, developing a solution will also take time. As we work horizontally with our federal partners and in collaboration with indigenous peoples and communities, we will take meaningful steps towards ensuring better outcomes for children, for families, and for generations to come. However, much remains to be done.
The department is making progress in a number of areas. Education greatly impacts individual, family, and community wellness. For example, a solid basis in literacy increases an individual's likelihood of success in many areas of life. These can range from basic literacy skills required to read to children, to transferring traditional knowledge within a family, and to participating in professional, cultural, and social activities.
In addition to the lifelong benefits associated with strong literacy skills, investments in this field can contribute to reducing poverty levels on reserve, increased workforce participation, and strong economies. Although progress has been made in recent years, there is still a critical need to improve outcomes through a collaborative approach to ensuring that first nations children have access to a quality education while respecting the principle that first nations control first nations education.
We are committed to working in partnership with the First Nations to support these objectives. Budget 2016 makes significant investments in primary and secondary education on reserves, totalling more than $2.6 billion over five years. The department is also working with other federal partners to support school readiness, notably by developing an early learning and child care framework for first nations.
In addition to general literacy skills, numeracy and mathematics are fundamental aspects of overall literacy and are the building blocks of financial literacy throughout life. Our education programs directly support learning and applying these skills in a school-based setting.
However, we recognize that funding alone is not enough. Improving educational outcomes and increasing the well-being of students on reserve require the involvement of all of the partners in delivering culturally appropriate education. Given this, the department is beginning a national engagement with indigenous organizations, communities, and other stakeholders on the way forward in first nations education.
We are also taking steps to ensure that indigenous people have a growing number of opportunities to continue their education after high school, given that too many people face significant barriers to pursuing post-secondary education. To that end, we are working with the students, families and indigenous organizations, as well as with post-secondary institutions to improve access to education and eliminate these barriers.
Through the post-secondary student support program and university and college entrance preparation program, INAC is currently investing over $300 million annually to support approximately 22,000 first nation and Inuit students in their pursuit of post-secondary education. These programs are designed to meet the unique needs of indigenous students and their communities, helping to offset the costs of tuition, travel, and other wraparound services in order to ensure their long-term success.
Early employment and skills training can also have considerable effects that counter the employment barriers experienced by many first nation and Inuit youth. Therefore, the first nation and Inuit youth employment strategy supports youth in getting the skills they need to enter the labour market. This program enables first nation and Inuit youth to gain experience through hands-on opportunities like co-operative and mentored work placements. These opportunities have proven to be very beneficial for indigenous youth in elementary and high school, and emerging research suggests that mentorship helps support learning and increases academic success.
Through financial assistance programs, the department is working to further support the well-being of children and families. For instance, the department's initiative to reform the on-reserve income assistance program provides direct financial support to low-income individuals and families living on reserves. In order to reduce poverty, the program provides funding for counselling, education and life skills activities to increase employability and labour market participation.
As of March 31, 2016, more than 7,900 on-reserve youth received pre-employment support or skills training through this initiative, and over 4,700 young people left for full-time education or employment opportunities. We continue to work with Employment and Social Development Canada in the context of the government's poverty reduction agenda and the aboriginal skills and employment training strategy to improve employment opportunities for indigenous people.
Poverty can be a contributing factor to a range of social issues, including the safety of children and violence against women. INAC's family violence prevention program supports the day-to-day operations of 41 shelters across the country as well as funding for community-driven proposals for family violence prevention projects on and off reserve. Budget 2016 committed $33.6 million over five years and $8.3 million in ongoing additional funding to increase supports to victims of family violence in first nation communities.
In budget 2016, Canada also invested $635 million over five years for the first nations child and family services program. This program supports culturally appropriate prevention and protection services that help ensure the safety and well-being of first nation children and families on reserve. Ensuring that children have healthy and safe childhoods leads to better social outcomes in adulthood. Further, healthy communities have better rates of employment and a lower incidence of poverty. To support both the immediate needs of first nation children and to begin a process of reform to strengthen the first nations child and family services program, program reforms will be developed in partnership with first nation stakeholders.
Finally, the department has been taking action to improve the wellness of indigenous people by addressing the socio-economic challenges they face. We are committed to continuing to collaborate with indigenous leadership on concrete solutions to improve socio-economic outcomes.
Thank you very much. I look forward to hearing the outcomes of this committee's work.
Good morning. Thank you very much.
Higher levels of education are linked to higher earning potential, a lower likelihood of unemployment, greater resilience during economic downturns, and many other public, private, social, and economic benefits.
Today I'll be speaking about programs that encourage post-secondary education participation, as well as skills and training initiatives, particularly for low-income Canadians.
On the savings side, we know that children who have savings in a registered education savings plan, as Heather indicated, are more likely to attend post-secondary education, regardless of parental income, parental education, and other factors. Research shows that it's the presence, and not the amount, of savings that creates the aspirational effect of thinking about post-secondary education.
Currently, almost half of all Canadian children, or about 3.5 million, have more than $47 billion accumulated in registered education savings plans for their future post-secondary education.
ESDC offers two savings incentives linked to RESPs: the Canada education savings grant and the Canada learning bond, or CLB. The education savings grant is available to all eligible Canadian children, and it offers a 20% grant on the first $2,500 of annual personal contributions made for a child, with an additional 10% or 20% on the first $500 saved each year for a child from a middle-income or low-income family.
In addition, the Canada learning bond provides up to $2,000 in education savings to children from low-income families. To date, the CLB has benefited 831,000 children, and while contributions are not required to receive the Canada learning bond, in 2015, 80% of children who received that also had personal contributions in their RESPs, with an average personal contribution of just over $1,000, which compares to $1,500 for CESG RESPs.
In addition, the Canada student loans program provides grants and loans to eligible students to help them with the cost of their education.
In 2013-14, over half a million students received Canada student loans, and more than three out of five of those also received a grant.
The repayment assistance plan helps borrowers who have difficulty with repayment, and in 2013-2014 that program helped 234,000 people. Budget 2016 announced improvements for students from low-income and middle-income families, and as of August 1, the Canada student grants were increased by 50%. These went from $2,000 to $3,000 for students from low-income families, from $800 to $1,200 for students from middle-income families, and from $1,200 to $1,800 per school year for part-time students from low-income families. Together these will benefit over 350,000 students.
The government has committed to extending the eligibility for Canada student grants for the next school year, allowing more full-time students to take advantage of it.
To help make debt more manageable for students, budget 2016 also announced improvements to the repayment assistance plan. As of November 1, no single borrower will need to repay a loan until earning at least $25,000 per year, and that loan threshold increases with family size. Those who have earnings above the thresholds may still be eligible for reduced payments.
Turning to literacy and essential skills, we know these help to foster resilience for Canadians; they help to strengthen the individual's capacity to enter into the middle class; and they help those who relapse into poverty.
The Government of Canada is investing in essential skills development through direct investments and transfers to the provinces and territories.
Emphasis is on individuals who are unemployed, underemployed, and in precarious employment, as well as on those with low skills and those who face multiple barriers, such as indigenous people, youth, women, and newcomers.
Skills training in Canada is supported by labour market transfer agreements with provinces and territories, and these represent a federal investment of nearly $3 billion. In support of strengthening skills training and employment, budget 2016 committed additional investments, including $125 million for labour market development agreements and $50 million for the Canada job fund agreements in 2016-2017. These will help unemployed and underemployed Canadians get the jobs they need.
Budget 2016 also contains a commitment to broad consultations with the provinces, territories and stakeholders to obtain their views on how to improve overall programs in this regard.
Over the summer, valuable feedback was received from over 700 stakeholders. The results were prepared in a report and provided to the Forum of Labour Market Ministers. The report was endorsed, and it will now form a collaborative approach to working together with provinces and territories towards the next generation of agreements. These will be flexible and responsive to the needs of unemployed, underemployed, under-represented groups, and employers; they will build on strong evidence-based programming; and they will aim to foster capacity to develop innovative program approaches.
The Government of Canada also invests directly in employment, including through the youth employment strategy and the opportunities fund for persons with disabilities. Budget 2016 proposed additional investments in the youth employment strategy, and an expert panel on youth employment was launched to help inform future investments in youth employment.
I'll stop there and return the floor to you, Mr. Chair.
In terms of retraining Canadians and whether we have a plan there, I think the diagnostic
of the changing labour market and the need for a changing skill set and Canadians' need for mobility, not just in terms of physical mobility but also in skills mobility and transferable skills, are sort of driving the skills agenda and the training agenda.
On the transfer side, for example, we do have forward transfers that provide, as I said, $3 billion to the provinces and territories, which are primarily responsible for the training system.
Over the summer, and also in the previous two years, I have to say, we have been doing extensive consultations with Canadians on what this transfer architecture should look like, to allow for up-skilling, retraining, helping those who are new to the labour market, or you name it. It's to really help all Canadians. We want to know if we have the right architecture in place.
Through these consultations it was shown that really the flexibility of the transfers that we currently have in place is something we need to look at. When it comes to retraining, if you fall within the specific parameters for a transfer, you're eligible for retraining. If you don't fall within those specific parameters, you're out of luck. There's a certain rigidity around the training system that we need to look at, and Canadians have told us we need to build in more flexibility for that.
On top of that is this whole idea of innovation, making sure that we're always staying on top of the best approach to training to help Canadians move on. In addition to that, I would say that when it comes to retraining and re-skilling, it's essential skills, foundational skills, that are really important. We've heard that a few times. Your success in retraining and being flexible depends on the foundational skills that you have. Those are is really your ticket to being mobile in the labour market.
Do we have a plan in place?
Thank you for your presence today and for the great information you have provided.
I'm going to focus my questions on education funding, particularly for indigenous students and students with disabilities. I'm doing that because I've worked for 20 years with high school students, but also I have three post-secondary institutions in my riding, so I am in constant communication with students, and I really feel a call to respond to their needs.
All the information has been fantastic, and I particularly liked slides 9 and 10. Well, I didn't like them, but they are interesting, and pay equity is something on which I hope this committee will make an in-depth study in the near future, so thank you for all the information provided.
First, for INAC, do you have any data on the number of indigenous youth who currently access government programs, including the PSSSP, the university and college entrance preparation program, and the post-secondary partnerships program, and is there any significance attached to that data?
I have a question for you. I don't want to stop you looking because I want the answer, but maybe I'll ask a broad question, while you're looking. I talk about the money, because often we see a lot of money coming into certain programs. With education, it gets dumped in, and we don't really measure success.
We were alarmed at some of the low success rates for some of the funding. I'm a trades teacher as well. I have two degrees, but I'm a trades teacher, because I am a former carpenter. It was amazing to me how much money would get put in a particular program and the success rate would be remarkably low. For instance, I remember one program where I think the average funding was $50,000 per 10, and there was only one success out of that particular expended amount of money.
I guess it answers the question. As somebody said here, it's not just about the money. There are more issues there, so it's not just about the money. I'm not saying that money isn't necessary. I'm getting to what Ms. Tassi referred to before, that there's more to it, and that's what we need to understand further.
What are the issues surrounding lack of success in aboriginal education? In February 2016, the C.D. Howe Institute talked about how to improve quality results on reserve. A couple of our witnesses who are going to appear Thursday are going to answer some of these questions on how they were successful and, hopefully, we can see success attached to these dollars.
There are a couple of things. I care about the kids, because I taught a lot of these kids. They have great outlooks on life, but for some reason, they get caught up in the trap and they're not able to be successful. They have high failure rates in high school, so they don't even make that next level. Ms. Tassi was saying that you need to graduate in order to become part of a post-secondary program, so if you can't even graduate.... The next question is why are you not graduating? We see other barriers there as well.
I think we need to be clever in how we look at spending some of this money so it ensures success, rather than just dumping money regardless of success.