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Building Assets and Opportunity for Low-Income Canadians

Building Assets and Opportunity for Low-Income Canadians. Welfare to Work: The Next Generation A National Forum St. John’s, Newfoundland November 2003. Who is ?. Toronto based national non-profit

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Building Assets and Opportunity for Low-Income Canadians

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  1. Building Assets and Opportunity for Low-Income Canadians Welfare to Work: The Next Generation A National Forum St. John’s, Newfoundland November 2003

  2. Who is ? • Toronto based national non-profit • Dedicated to creating innovative projects aimed at self-sufficiency – building secure futures • 5 main areas: • Asset-Building • Policy Development • Self-Employment • Youth • Capacity Building

  3. Asset-Poverty • Significant asset inequity • Income-Poor also tend to be Asset-Poor • Significant barriers and disincentives to asset-building among low-income earners • Millions invested annually to encourage asset-building among middle and higher income earners (i.e. RRSPs, RESPs)

  4. Asset-Building • New and progressive approach to alleviating poverty and fostering independence • Traditional income security programs are inadequate as independent solution • Assets are resources that create opportunity • No existing asset-based policy framework

  5. Asset-Building in the U.S. • American Dream Demonstration (1998-2003) • 2,400 participants • Assets for Independence Act • $25 million over 5 years to non-profits for IDAs • Home purchase, micro-enterprise, post-secondary education • Savings for Working Families Act(2001) • May 2002 – CARE Act - $450 million for financial institutions that match and support IDAs • $ for $ tax credit as matching funds ($500/year)

  6. Canadian Landscape • Welfare Policies • Income and asset limitations • Benefit roll-backs • IDA Legislation – BC, NS • Inconsistent Policy Treatment • CCTB/Student Loans • Part-time students not supported (CESG, SMS, RRSP withdrawals)

  7. k • 9-year research and policy demonstration • Encouraging lifelong learning practices among low-income families • Accumulated savings through IDAs and financial literacy course • Voluntary participation – over 3,500 participants • Personal savings of $1,500 with average 3:1 match = maximum $6,000 for adult education, micro-enterprise or skills training

  8. continued… • Strong partnerships • HRDC, SRDC, RBC Royal Bank and 2 major credit unions • 10 sites across 7 provinces – urban and rural • Provincial accommodation for 466 SARs • Randomized experiment in 3 sites • To date: • Over 600 cash-outs to date • $1.7 million in personal savings, leveraging $5.1 million in federal matched contributions

  9. continued… • SARs vs. Other Participants • Tend to be older • Predominantly female, Canadian citizens • Higher proportion of divorced or separated • Lower education levels • Higher percentage of people with disabilities • Higher unemployment rate

  10. continued… • SAR Savings Goals • 60% Education • 11% Skills Training • 29% Micro-Enterprise

  11. continued… • SAR Participation by the Numbers • 78% have opened accounts • $25 – average monthly saving • $150,000 – total savings to date • $465,000 – total matched credits leveraged • 130 cash-outs to date for 45 participants • $83,000 in matched credits used to date

  12. continued… • Coming Up… • Early Look Report – February 2004 • Policy Agenda, includes discussion paper on SAR participation in asset-building projects • Ongoing dialogue with provinces • Other asset-building initiatives…

  13. and ILAs • SEDI exploring 2 initiatives • Homeownership • Access to affordable private market rental accommodations (transitional housing)

  14. What’s Next? Develop public policy through demonstrations Project results , ILAs Funders and project partners Refinement of concept and identification of priorities Use evidence to support government departments to develop asset-based policies to support the needs of all Canadians

  15. Social and Enterprise Development Innovations 1110 Finch Avenue West, Suite 406 Toronto, Ontario, Canada M3J 2T2 Ph: 416.665.2828 Fax:416.665.1661 Email: info@sedi.org www. .org

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