After a year of delivering financial literacy workshops, some in small communities, I’ve really become aware of the lack of access to financial services in much of the NWT.
Without a bank in your community it’s difficult to impossible, for example, to set up a Registered Education Savings Plan to save for your child’s education. Without a bank, you end up paying higher fees for cheque cashing services at a local business and to access cash. Or, like many people in the NWT, you may not have a bank account at all. Sadly, it is often the people who can least afford it that pay higher fees and can’t afford regular trips to larger centres to do their banking.
Today, access to financial services is more important than ever. Many government payments involve direct deposits -- everything from pay cheques, to social assistance, to pension payments and GST rebates.
When it comes to Registered Education Savings Plans, or RESPs, most banks insist that people open them in person. That is a huge barrier for low-income families to access the Canada Learning Bond, which is up to $2,000 of free money for their child’s further education. Currently in the NWT, only 8% of families that are eligible access this money.
The recent talk of changes to Canada Post focuses largely on increased fees and stopping home mail delivery. However, as part of the discussion, I was interested to hear the suggestion that Canada Post should start to provide financial services. This could really help people in small communities without banks, especially remote First Nations, Metis and Inuit communities where people can’t just get into a vehicle and drive to a bank in a nearby centre.
In fact, post offices provide this kind of service in Japan, Australia, New Zealand and several European countries. In the United Kingdom, post office closures hit the poor and elderly the hardest because these are the people who depended most on them. The idea of post office financial services has been around for a while in Canada too, judging by a background paper on the pros and cons of a postal bank that appears on the Parliament of Canada website. In a National Post article in December, one Canadian journalist linked Canada’s high bank fees, at least in part, to the lack of competition from post offices.
If not postal banks, how can we help people in small NWT communities without banks access financial services? How can we make sure that those who can least afford it are not paying the highest fees for financial services?
I welcome your thoughts on this.
-- Katie Randall