Financial empowerment: taking individuals from survival to prosperity — Interview with Liz Mulholland of Prosper Canada

Prosper Canada is a national charity dedicated to expanding economic opportunity for Canadians living in poverty through program and policy innovation. It focuses on developing and promoting financial policies, programs and resources that improve the financial health of people with low incomes. This interview with Liz Mulholland, CEO, has been edited for length and readability.

The financial empowerment framework of Prosper Canada seeks to take individuals from survival to prosperity — going from crisis situations to being able to build enduring assets. Why is this work important and necessary?

Before we started this work, there was no financial empowerment field in Canada. There were free community tax clinics in some communities, but no other one-on-one financial help apart from credit counselling services — not specifically for low-income people. We began by developing a tailored financial literacy curriculum for people with low incomes and training community financial educators, but realized over time that more comprehensive services and hands-on financial help were needed.  

In particular, many people with low incomes were not tax filing and accessing all of the income benefits available to them. Based on best estimates, more than $2+ billion in federal income benefits goes unclaimed every year by people that are entitled to and need this income to meet basic needs and build financial security for the future.

This includes very large benefits like the Canada Child Benefit, Guaranteed Income Supplement for seniors, and CPP Survivor benefits, but also the Canada Learning Bond and Canada Education Savings Grants, grants and savings incentives linked to the Registered Disability Savings Plan, the Canada Worker Benefit, GST Credit and more. We believe it’s critical to close this benefits gap.

When people seek financial help and advice, they may be at different places along the spectrum, from financial crisis — facing eviction, for example — to a place further along, where they have achieved financial stability and are starting to focus on achieving savings or debt reduction goals, and building greater security for their long-term future. Financial empowerment is about meeting people where they are and identifying the help they need right now and then working with them to further strengthen their financial capability and health over time in ways that help them meet their personal and family goals.  We’ve created a framework and flexible suite of interventions that enable service providers to help people with low incomes no matter where they fall on the spectrum.

You’ve had several concrete policy successes. Can you explain the real-life impact of your policy achievements on low-income Canadians?

Perhaps the biggest policy success of Prosper Canada and our partners is convincing the federal government to commit to communicating with Canadians who are owed benefits. This is a difficult task because, until somebody files taxes, the government doesn’t know if they are eligible for certain credits and benefits or not. It’s a really Herculean effort to find out how many people aren’t receiving benefits, who they are and where they are. StatsCan, Employment and Social Development Canada (ESDC) and the Canada Revenue Agency (CRA) are working hard to develop a clearer picture so they can share this data with provincial, municipal, community and philanthropic partners that are eager to help connect Canadians to their benefits.

The federal government has put real energy into this problem and we have made important progress. CRA has improved its communications, expanded taxpayer and community outreach, increased funding for free community tax clinics, automated enrolment in some benefits, and introduced pre-filled forms for some people with simple tax situations. These efforts have had a real impact on take-up of some benefits but there is still a lot more to do to close the gap.

What kind of future impact do you hope for as you continue to scale your work?

Our vision is that every Canadian will have access to the financial information, products, services and advice they need to achieve financial wellbeing. 

Many Canadians with low incomes still have no place to turn to for free, high quality, financial advice relevant to their needs, so it’s important to build capacity on the ground — mainly through community service providers. For example, the CPA (Chartered Professional Accountants) provides free tax clinics and tax advice through volunteers. In Ontario alone they help 30,000 low-income people file taxes every year. They’re expanding these efforts across Canada.

We’re building a network of Financial Empowerment Champions: leadership organizations in local communities that deliver financial empowerment supports and collaborate with other municipal and community partners to help scale up these efforts.  Champion organizations provide training, build referral networks with other community service providers, and work with local and provincial governments to identify opportunities to build supports into existing public services that low-income people use. For example, the City of Toronto is mandated and funded by the province to deliver social assistance and employment services through its 19 employment centres. We have worked with the City to build tax clinics, financial education and some financial coaching into these services.

We’re now working with the Toronto Public Library, the largest library system in North America, to identify financial empowerment supports that can be integrated into its 100 branches, so we can reach even more people. 

The 2014 survey by the Financial Planning Standards Council found that 42 per cent of Canadians rank money as their greatest source of stress, and currently, the debt to income ratio is at 178.5%. Is there a difference between stress caused by not having enough money versus not having effective solutions for managing the money we do have? How can Prosper Canada tailor its help while navigating these broader societal issues?

One of our biggest problems in Canada is we can’t see — and don’t understand — what’s going on in the financial lives of Canadians. We operate on a large number of assumptions. It’s hard to solve a problem when you don’t know what’s causing it.

One of the most pressing questions we’re exploring is why are Canadians taking on so much debt? We know that in 1982, Canadians saved 20% of their income annually on average, while they save roughly 1% today. They also had much lower debt levels in 1982 than they do today.  Some people point to the high costs of housing in our biggest cities. That is definitely part of the problem, but that doesn’t explain the picture everywhere in the country, nor why people who don’t have mortgages also carry a lot of debt.

We believe the changing labour market and accompanying rise of precarious work is a major factor driving changes in financial behavior. Research increasingly shows a strong link between growing income volatility from precarious work and poor financial health. A study conducted by TD Bank shows that 37% of adult Canadians have significant swings in the amount and timing of their monthly income that are linked to increased difficulty budgeting, making a financial plan and saving. We know that in months when incomes dip and expenses spike (about three times a year), people often have to borrow to make ends meet. 

Household debt is a growing problem in Canada. A study conducted by TD Bank shows that 37% of adult Canadians have significant swings in the amount and timing of their monthly income that are linked to increased difficulty budgeting, making a financial plan and saving.


While this problem goes right up the income scale, low-income Canadians feel the negative effects most acutely as they have very little financial room to maneuver.  Some of the solutions to this lie in the policy realm — in employment standards legislation for example. Other solutions lie in improved employment practices, innovative financial products and services to meet new needs, and expanded financial supports in communities.

To develop effective solutions though, we need more comprehensive, publicly available data on household-level financial behaviour, including longitudinal data, so that we can determine what is driving poor financial outcomes, target solutions effectively, monitor their impact, and change course where necessary.

What would be the “north star” of Prosper Canada? If financial empowerment were achieved in all the communities that need it, what would that look like?

Every Canadian would have access to the financial information, products, services and advice they need to build their financial wellbeing; and every nickel of public benefits would flow to the Canadians that are entitled to them.

To get there, though, public services that currently serve low and modest-income Canadians — health care, settlement, housing, shelter, welfare, employment and library services for example — will need to become what we call “Prosperity Gateways,” checking with clients to see who needs financial help and connecting them to community supports or providing that help directly themselves.

At the same time, financial service providers will need to leverage new insights and technologies to actively build the financial health of every customer, as the route to their business success. If we do this, we will be strengthening families, our economy and our future – nation-building for the 21st century.