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Financial literacy five years in: How we can build a more lasting legacy

24 November 2016
November is Financial Literacy Month in Canada and the perfect time to reflect on how we are doing when it comes to building the financial knowledge, skills and confidence of Canadians.
In the five short years since the federal Task Force on Financial Literacy issued its landmark report, financial literacy efforts in Canada have come a long way. Our national and local media contain daily financial literacy stories, grassroots programs and networks have sprung up across the country, and the OECD just released rankings showing Canada to be the third most financially literate nation among its 29 members even though we still have significant room for improvement.  
Our progress is due, in no small part, to the leadership of Jane Rooney, Canada’s Financial Literacy Leader, and her small but intrepid team who have worked tirelessly to engage, energize, and connect an ever growing coalition of financial education partners in every corner of the country. These include corporations, foundations, and industry/professional associations working with schools and community organizations to deliver programs and undertake research innovation to better understand and meet the financial literacy needs of different groups.
So, are a thousand financial literacy ‘flowers’ blooming across Canada today?  The answer is a resounding yes. By this measure, our national efforts have been highly successful at sparking a myriad of initiatives aimed at strengthening Canadians’ financial knowledge, skills and confidence.  
However, if we were to ask instead – ‘Does every Canadian have access to the financial information, education, and advice they need to achieve their financial well-being?’, then the answer is not quite as resoundingly positive. As tempting as it is to trust to the ‘thousand flowers blooming’ approach, many of these ‘flowers’ are short lived, one-time initiatives that will quickly fade and disappear for lack of sustained funding. We know that many Canadians with low incomes are unable to access the financial education and supports they need, because the community organizations serving them cannot find ongoing funding to support their work. 

Build financial education and supports into large-scale services that Canadians already trust and use 

If we believe financial literacy is critical to the well-being of Canadians and Canada, then we need to create sustained capacity to provide all Canadians with the financial information, education and advice they need, when they need it, in ways that are accessible and relevant. 
One way to do this is to build financial education and supports into large-scale programs and services that Canadians already trust and use. These can be services delivered directly by governments, employers, and financial institutions, or by community organizations with funding support from government and philanthropic partners. 
Start with our primary and secondary schools

Education is a great example. The most obvious place to start would be our primary and secondary schools. Many provinces have already begun to dip their toe in this water, but ‘dip’ is really the operative term. There is not yet any consensus on the optimal way to teach financial literacy to children of different ages and teachers often lack the necessary classroom time, resources and training to do this effectively. The Canadian Foundation for Economic Education has been leading efforts to help interested provincial ministries of education develop quality training and resources, but progress is not uniform across the country. A new evidence-based guide to building financial capability in children and youth from the U.S. Consumer Financial Protection Bureau has just been released – Building Blocks to Help Youth Achieve Financial Capability, along with a personal finance teaching tool that may help. Ministries of Education, take note!
As young people begin to contemplate life beyond high school, they need good financial information and tools to make sense of their education, training and work options and to access funds to help pay for their ongoing education or training. Without support at this critical point, we know many students from families living on low incomes may feel they cannot afford post-secondary education or training and close the door on future career opportunities. A simple online tool like, however, can help students to tally the costs of different programs (including living costs), identify funding sources available to them, and build a plan to finance their post-secondary education. Programs like Life After High School, that provide Grade 12 students with hands-on help in the classroom to find out about and apply for college/university programs and financial aid are an even more powerful way to help youth successfully plan for, finance and pursue their educational dreams.

Weave financial education into youth employment to build positive lifelong financial habits 
A student’s first job is another important financial milestone and a golden moment to build positive financial habits that will last a lifetime. The My Path youth employment program includes financial education and helps youth to both get a job and to open a bank account, enroll in direct deposit, set and achieve savings goals, and build a positive credit history. This builds positive financial habits for the future and increases their chances of enrolling in and completing post-secondary education and becoming upwardly mobile. It also reduces their risk of experiencing financial pitfalls like damaged credit, unmanageable debt and no emergency savings. 
As young people take on student loans to help finance their education, it’s important that they understand their rights and responsibilities under loan agreements before they sign, that they have the financial literacy necessary to manage their money successfully while in school, and begin paying down their loan as quickly as they can after graduation. If this isn’t possible right away, then they need to understand and access the relief options open to them and avoid simply defaulting on their loan and ruining their credit record. Building online financial education and counselling into the student loan process at key decision points and milestones can help to reduce loan default rates and protect young people’s credit ratings. Access to financial education and counselling for all students who need it can also help to prevent the worst case scenario – students who drop out for financial reasons and are left with no education and a large debt they have no way to pay.

Make financial education an integral part of settlement services for newcomers to Canada 
Many adult newcomers also find themselves back in the classroom, participating in orientation sessions and English/French language courses. Immigration, Refugees and Citizenship Canada was one of the first government departments to recognize that financial literacy is a critical skill that people need to succeed in its programs. To this end, it added financial education to the list of activities eligible for funding under its Settlement Program for newcomers. Without any additional expenditure, this gave settlement organizations across the country the mandate and resources they needed to begin providing financial education to the over 355,000 newcomers who use Canada’s settlement services every year. Settlement agencies can now access tailored financial information they can use in one-on-one sessions with clients through the online Money Management Tools for Newcomers. They can also build financial education workshops into language and general orientation courses, workshops like Money Matters for Newcomers and New Canadians delivered by ABC Life Literacy and TD Bank Group employee volunteers. 
Build financial education into other services where evidence shows it will improve outcomes
Canada’s education and settlement services are just two of many large service delivery systems that touch millions of Canadians directly every year and that, with carefully designed interventions built in at the right moments, can provide critical financial information, education and support to Canadians when it matters most. There is strong evidence that building financial education and supports into key services can significantly improve their outcomes. These services include: employment programs, social assistance, disability supports, housing and homelessness services, and primary health-care delivery.
So, if you are a government funding, designing, or delivering any of the above services, please consider adding these words under the list of activities your program will fund and deliver – “and relevant financial education and supports.” It may cost you nothing, your program outcomes will improve, and so too will the financial health of the Canadians you serve. 
Help fill critical financial education gaps for vulnerable groups
And if you are a foundation, financial institution or other company interested in helping Canadians to build their financial well-being, consider how you can do more to address critical financial education needs in our communities, particularly for vulnerable groups like newcomers, youth at risk, people with disabilities, or Indigenous Canadians who currently do not benefit from many mainstream initiatives. 
At the end of the day, financial well-being provides us all with the security and freedom we need to pursue our dreams and lead a fulfilling life today and in the future. As we approach Canada’s 150th anniversary, what better legacy could we hope to leave?