Asset Policy
Assets matter. Beyond annual income, owning your home, having retirement savings, having savings to start a small business, or having savings to put your children through school can mean the difference between financial security and economic exclusion. For middle and higher income earners, the benefits of saving and building assets have
been obvious. But only recently has any attention been paid to the impact that assets can have on the lives of families and individuals at lower incomes.
Assets can take different forms. For most households, the largest asset is equity in a home. But other forms of assets such as retirement savings, stocks and bonds or cash in a savings account are also important contributors to financial security. Assets can also take the form of intellectual assets, such as post secondary education and training, or they may form the capital for business and employment, such as equipment and property. In their varied forms, assets all contribute to
social and human capital. Their presence is associated with household stability, economic well-being and civic engagement. Their absence is associated with higher risks of poverty, exclusion and disenfranchisement. The very act of saving itself seems to have powerful social and psychological impacts, enhancing a sense of empowerment and capacity.
The state of asset-building in Canada as an approach to poverty alleviation is, as yet, only a promising idea, not yet a public policy. However, Canada already has in place several measures to promote the accumulation of savings and assets from private retirement savings to life-long learning savings plans and homeownership. Federal and provincial governments spend billions to assist middle and upper income earners to save largely through non refundable tax credits.
Despite a consensus among policymakers that widely shared opportunity and participation in the evolving economy is a necessary policy goal, there is still no comprehensive asset-building policy for low-income Canadians. Worse still, provincial governments impose savings and asset caps on social assistance recipients, forcing them to exhaust most of their existing financial assets and limiting their capacity to save new assets that could otherwise have been used to break the cycle of dependence.
In Canada, the federal government has begun investigating the efficacy of asset-building as a strategy to increase access to learning and skills development among low-income adults. The SEDI-led (Social and Enterprise Developments and Innovations) and Human Resource Development Canada-funded research and demonstration project called Learn$ave will test the impacts of offering Individual Development Accounts (IDAs) for learning to low-income working Canadians.
The project is undertaken in partnership with the project research team at the Social Research and Demonstration Corporation and community-based organizations across Canada as well as RBC Royal Bank. Across ten sites, nearly 5,000 low-income
Canadians have being recruited to take part. Most will receive a special Learn$ave savings account at RBC and their deposits will be matched with savings credits that can be withdrawn to finance learning and skills training opportunities. Many will also receive case management support and financial management training to help make the savings and asset-building
process more accessible.
St. Christopher House has partnered with Family Services Association, St. Stephens Community House and the YWCA to support SEDI's Learn$ave project in Toronto.
To learn more about Learn$ave and Asset policy, visit the SEDI website:
Social and Enterprise Development Innovations
and Family Services Association which is the lead organization in Toronto
