Getting to our destination: Diversity, equity and inclusion

“Diversity, equity and inclusion” is a mantra we increasingly hear from business, government and non-profit organizations. If this is our destination, though, how do we know whether we are making steady progress toward our goal?

As with any goal, we need to start by defining what success looks like and how we will measure our progress.  

When it comes to advancing diversity, equity and inclusion in the realm of household financial well-being though, there are three obstacles preventing us from defining clear targets and measuring and addressing the disparities affecting equity seeking populations in Canada.

The first is a lack of consensus among key stakeholders – federal departments and agencies, financial institutions, and interested equity advocates – on a common framework for defining and measuring household financial well-being. Without this, it is hard to define success, measure disparities, or monitor our progress toward greater financial inclusion and more equitable financial opportunities and outcomes for equity-seeking populations.  

Secondly, the federal government does not systematically collect or share disaggregated national household financial data on an annual basis that would enable us to see, monitor and address systemic disparities in household financial well-being. Without this data, and accompanying research, we remain largely blind to disparities by race, gender, sexual identity, disability, income and geography, and helpless to address these disparities effectively.

Thirdly, in the absence of a shared financial well-being framework and supporting data, we remain stuck in an outmoded model of economic well-being that assumes that employment and an annual income above the poverty line are sufficient to ensure financial stability, security, and resilience for Canadian households. The steady decline in household savings rates and relentless rise in household debt and financial stress levels in Canada over the past forty years – through good economic times and bad (apart from the recent pandemic blip) – tell us quite clearly that this assumption, even if it was once true, is now incorrect.  

This implicit framework, however, continues to shape federal economic analyses and to dictate the range of potential solutions that the federal government will pursue. In this framework, employment and poverty levels are the “signals” that matter and solutions typically focus on job creation and income benefits.  

Jobs and above-poverty incomes matter enormously, but we also need to consider what kinds of jobs? Who gets which jobs? The extent to which jobs are accompanied or not by benefits like retirement plans and dental, health, disability and life insurance? Whether jobs come with stable or volatile incomes?  Are income benefits equally available to everyone in need and are they actually reaching all those who are eligible?

Financial well-being is equally affected by the financial marketplace. Who is financially included and who isn’t? Who pays what for their financial products and services? Who are these products and services designed for and whose needs are not being met by the market? What rules govern this marketplace and do they ensure adequate fairness, affordability and choice for all consumers or just some? Is the onus on consumers to deal with problematic practices or are regulators proactively engaging financial service providers to catch issues earlier and define and enforce good practices? Who has access to quality financial advice to help them set and achieve financial goals and navigate complex financial decisions? Who must go without?

Canada’s federal tax system is also a critical factor. Which Canadians are generously incentivized to save for retirement and/or buy a home and which Canadians are not? Who benefits and who loses from lower tax rates on investment income versus income from labour?

Finally, the cost of living is also a major determinant of financial well-being. Do some communities pay more for food than others? Who benefits and who loses financially when housing prices and rents skyrocket?  Are urban and rural households equally impacted by rising gas prices? Is post-secondary education still a good investment for everyone or is it becoming a debt trap for some? 

Financial well-being has many determinants and what drives financial vulnerability in one group of Canadians is likely to be quite different for another. By the same token, solutions that work for one group are unlikely to work for everyone. Achieving true financial equity and inclusion for diverse equity-seeking groups will therefore be a messy business. What we can say for sure though is that we are very unlikely to make any progress without data that enables us to see, explore and address disparities and that more jobs and income benefits alone are unlikely to be the full answer to Canadians’ financial problems. 

The COVID-19 pandemic has shone a salutary light on the experiences of people with low incomes, newcomers, Indigenous Peoples, members of other racialized communities, and LGBQ2S+ Canadians, revealing profound disparities and inequities measured in their disproportionate loss of jobs, businesses, earnings, and lives. COVID-19 deaths and mortality rates paint with x-ray precision the starkest portrait of disparity in our society:

• Forty-four per cent to 51 per cent of COVID-19 deaths in Vancouver and Toronto have been of immigrants.


• People with low incomes have a COVID-19 mortality rate 1.4 times higher than people with higher incomes, rising to 1.7 times higher in one-parent low-income households. 


• Neighbourhoods with the highest proportion of visible minority residents (25 per cent or more) have double the COVID-19 mortality rate of those with the lowest proportion (less than one per cent). 


• In Quebec and Ontario, this rate is triple and in B.C. it is more than 10 times higher. 

The pandemic has also spurred illuminating new survey research on household financial health, with occasional robust samples from diverse population groups. These surveys have shone brief flashes of light on the differential financial experiences and health of Canadians. For those who care to assemble these glimpses and look at the emerging picture they paint, it is clear that we are far from achieving our goal of an inclusive and equitable recovery. Instead, the pandemic continues to widen underlying economic disparities in Canada.

As the federal election approaches and Canadians consider who they wish for the next federal government, we should all be asking – which party is best prepared to tackle these disparities?   Who will bring robust new data, insights, and innovative ideas to this challenge in addition to the usual refrain of more jobs and more lucrative income benefits for target voters?

We can create the conditions for real change by aligning on a more robust and comprehensive financial well-being framework and collecting and publishing timely, disaggregated, monitoring data. These will give us a much clearer understanding of who is increasingly financially vulnerable, and why, and facilitate solutions to break down the systemic barriers that deny equity-seeking groups the same financial opportunities as other Canadians.

Diversity, equity and inclusion is a destination worth fighting – and voting – for. See you at the polls on September 20th!