November 2020 marks the 10^th anniversary of Financial Literacy Month in Canada and serves to remind us of the importance of understanding and managing personal finances to secure our overall well-being. For years, Canadians have consistently ranked money issues as their greatest stressor in life, over their personal health, work and relationships.[1] One can only assume that this was made worse by the additional layer of financial uncertainty brought on by the COVID-19 pandemic.

Thankfully, ten years after the federal government’s unanimous declaration of November as Financial Literacy month, there are now many resources available to help Canadians navigate the complexities related to managing their finances.[2]

More than any other single event, the 2008 financial crisis heightened the importance of financial literacy. It was a watershed moment that evidenced — along with many other issues — important gaps in our understanding of financial products and services and in the skills needed for us to effectively manage our personal financial finances.

Among the Government of Canada’s many responses to this financial turbulence was the creation of the Task Force on Financial Literacy in 2009, and the fielding of the Canadian Financial Capability Survey (“CFCS”) that same year. 

Task Force on Financial Literacy

In its report,[3] the Task Force asserted that financial literacy was critical to the financial well-being of Canadians and the prosperity of the country and put forward several recommendations for the government’s consideration. Most recommendations were subsequently accepted by the government of the day and implemented through the Financial Consumer Agency of Canada.

Canadian Financial Capability Survey

For its parts, the CFCS was and continues to be used to test Canadians’ financial acumen in five areas – ‘making ends meet,’ ‘keeping track’, ‘planning ahead,’ ‘choosing products,’ and ‘staying informed’ of new products and services and is fielded every five years.

Results from the most recent CFCS[4] survey indicate that Canadians are taking charge of their finances by budgeting, planning and saving for the future and paying down debt. That said, the same report finds that there are emerging signs of financial stress (now likely exacerbated by the COVID19 pandemic), as one third of Canadians feel that they are over indebted and a growing number are having trouble paying their bills on time. Fortunately however, and perhaps the report’s most significant finding, more Canadians have found ways to increase their financial knowledge, skills and confidence, in the 5 years since the last CFCS was conducted.

Individual and Collective Benefits

The leveraging of resources by Canadians is a significant outcome because - individuals with good basic knowledge of financial matters make more informed decisions – to their benefit and to the benefit of the country’s economy as a whole. For the last 10 years, a consensus and momentum have been building across Canadian society that financial literacy should be considered as fundamental to a good quality of life as basic numeracy and literacy. So please join me this month in promoting the important role financial literacy plays in our personal, as well as in our collective well-being.

[1]2020 Financial Stress Index, FP Canada 2020

[2] See Government of Canada’s Financial Literacy Database

[3]Canadian and their Money: Building a brighter financial future, Financial Literacy Task Force 2010

[4]Canadians and their Money: Key Findings from the 2019 Canadian Financial Capability Survey, FCAC 2019