Building Assets and Opportunity for Low-Income Canadians

Welfare to Work: The Next GenerationA National Forum

St. John’s, NewfoundlandNovember 2003

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

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)

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

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)

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)

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

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• 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

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• 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

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• SAR Savings Goals– 60% Education– 11% Skills Training– 29% Micro-Enterprise

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

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• 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…

and ILAs• SEDI exploring 2 initiatives

– Homeownership– Access to affordable private market rental

accommodations (transitional housing)

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

Social and Enterprise Development Innovations1110 Finch Avenue West, Suite 406

Toronto, Ontario, CanadaM3J 2T2

Ph: 416.665.2828 Fax:416.665.1661Email: info@sedi.org

www. .org