Poverty: It

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Poverty Its not just an issue of income

• a

Asset-Building in Canada
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• Our Vision
• SEDI envisions a society where there is an end
  to barriers that prevent individuals from
  realizing their full economic and human potential
  and where social, cultural and economic supports
  are available to enable people to learn, take
  risks, invest wisely and participate in the
  economic mainstream.

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continued

• Core Values
• SEDI is innovative pioneering in our
  development of new socio-economic ideas and
  creative in implementing existing programs.
• SEDI has a client focus focusing on client
  needs for everything from voicemail to vision.
• SEDI is a catalyst for change strengthening the
  capacity of individuals, organizations,
  communities and national to effect positive
  socio-economic change.
• SEDI is inclusive upholding diversity,
  respecting integrity in all relationships with
  internal and external organizational
  stakeholders.

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Policy Areas

• Asset-Building
• Self-Employment
• Youth-at-Risk
• Organizational Capacity Building

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Asset-Building

• Our Goal
• To create an enabled environment for savings and
  asset-building by low-income Canadians.

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Income-Poverty

• As many as 10 to 14 of Canadians, and 27 to 30
  of Canadian children are currently living in
  poverty the gap between Canadas rich and poor
  appears to be growing.
• Social policy debate, research and action in
  Canada have long recognized the need to provide a
  minimum level of income to meet basic consumption
  needs.
• Array of targeted and universal measures to
  provide income support in cases of temporary
  unemployment, disability, work-related injury or
  illness, retirement and parental leave.

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Key Concepts

• Economic security is not just about income it is
  also about assets.
• Assets exert effects that income does not.
  
• (i.e. cushioning against unpredicted adversity
  or planned risks, enhance social capital and
  inclusion, build sustainable capacity with
  intergenerational effects).
• Assets and income are complementary and
  interrelated.
  Good asset-building policy also
  requires good income security policy.

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Asset-Poverty

• Significant Asset Inequity
• 50 of Canadian families have almost no net
  assets Savings and assets increase substantially
  from low-income to middle and upper-income
  Widening gap between asset-rich and asset-poor.
• Income-Poor also tend to be Asset-Poor
• Less likely to have higher education, own a
  home, have retirement savings, savings for their
  childrens education.
• Significant barriers and disincentives to
  asset-building among low income earners (assets
  in means tests, benefit claw-backs).
• Governments invest millions annually to encourage
  asset-building among middle and higher income
  earners.
• (i.e.) RRSPs, RESPs, etc.

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The Government of Canada currently invests

• 15.4 billion to support private retirement
  savings in RRSPs and Registered Pension Plans
  through deferred tax income and allows these
  savings to be used for adult learning and
  downpayments for first-time homebuyers.
• Nearly 1 billion to support savings for
  childrens post-secondary education by matching
  the savings of contributing relatives and friends
  with 20 for every 1 saved.
• 2.4 billion in foregone taxes on capital gains.
• 415 million in deductions for employee stock
  options.
• Note All figures are in Canadian dollars. All
  figures are for the fiscal year 2001-2002 and are
  from Government of Canada sources

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The Asset-Building Field

• United States
• Federal and state legislation supports Individual
  Development Accounts
• Downpayments on the American Dream Demonstration
• Savings for Working Families Act
• See www.cfed.org or www.idanetwork.org
• United Kingdom
• Child Trust Fund
• See www.ippr.org

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Current Initiatives

• Largest demonstration, worldwide, of Individual
  Development Accounts
  (IDAs) -- one approach to program model for
  asset-building.
• Thousands of low-income participants across 10
  sites, saving to invest in their own life-long
  learning. Matched accounts generating up to 18
  million in productive assets.
• Innovative multi-sectoral partnership and a
  rigorous research and evaluation framework. Will
  generate important information for field in
  Canada and internationally.

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continued

• As of May 2003
• more than 3,000 low income Canadians have
  enrolled
• average monthly deposits are 55, totaling
  approx. 1 million and leveraging a further 3
  million in matching grants
• participants are predominantly
  young (77 are in their 20s or 30s), single
  with no dependants (47), female (59) and have
  some form of employment income (63).
• 83 of participants have a household income of
  less than 20,000, while at the same time 79
  have at least some post-secondary education, if
  not a post-secondary degree.
• Source Management Information System, internal
  data, SEDI

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Current Initiatives continued

• National consultation on applying IDA methodology
  to challenge of affordable housing.
• Results very positive and support a broad
  approach including transitional housing, rental
  housing, home purchase and maintenance.
• Proposal underway to launch a new national
  demonstration project.

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Current Initiatives continued

• Financial Literacy
• Necessary condition for equitable participation
  in financial services sector (including basic
  banking services) and, in turn, asset-building.
• Shift in delivery of income benefits via EFT
  places onus of responsibility on governments to
  ensure access to, and understanding of, financial
  services.
• Already a significant national commitment to
  literacy. National, multi-sectoral commitment to
  financial literacy required.

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3 Year Policy Research Agenda

• Develop and test asset-building applications such
  as childrens education, youth, aboriginal
  communities and homeownership.
• Produce thoughtful and timely research and
  recommendations based on information from the
  learnave project on the interactions of
  asset-building programs and taxation, impacts of
  provincial social assistance programs and the
  experience of special need groups such as
  newcomers.
• Stimulate dialogue on asset-building within
  Canadas policy research community and support
  the development of a network of new investigators
  on asset-building and asset-based policies.

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3 Year Policy Research Agenda continued

• Develop a policy analysis matrix to evaluate the
  likely success of asset-building policy
  initiatives in Canada.
• Conduct a comprehensive review of all Government
  of Canada and provincial programs and services to
  establish the first ever baseline for public
  expenditure and outcomes on asset development in
  Canada.
• Provide thoughtful, timely and relevant policy
  research, analysis and advice on how an
  asset-building approach might enhance current
  federal initiatives in priority areas including
  increasing life-long learning increasing access
  to affordable housing and reducing poverty and
  child poverty in Canada.

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What else needs to be done?

• More inclusive lexicon institutionalizing
  assets and asset-poverty
• Better data On-going, regular research on
  asset-poverty in Canada
• Broader debate Involve multiple sectors,
  stakeholders and perspectives
• More mechanisms More IDA and IDA-like projects
  AND innovation
• Policy response start by removing barriers

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Social and Enterprise Development Innovations

• 1110 Finch Avenue West, Suite 406
• Toronto, Ontario, Canada
• M3J 2T2
• Ph 416.665.2828 / Fax [phone]
• Email info_at_sedi.org
• www. .org