It has been almost a year since my appointment as Canada’s first Financial Literacy Leader, one of the only positions of its kind in the world. In that time, it has become very evident to me that individual financial well-being is a shared responsibility for financial institutions, governments and community-based organizations, and that this shared responsibility transcends borders.
Since the beginning of the century, the world has become a very different place. Much has evolved, especially in the financial services sector in Canada: from regulation to oversight, from education to financial literacy. The Financial Consumer Agency of Canada (FCAC), where I work, did not exist at the beginning of this century. In the 13 years since the agency was created, we have had to grow and adapt quickly to meet the challenges and opportunities in promoting financial well-being.
Financial literacy means having the knowledge, skills and confidence to make responsible financial decisions. It is a critical life skill, particularly in today’s complex financial market. Making ends meet, keeping track of finances, managing debt, planning ahead and staying informed of new financial products and services increase our ability to foresee and avoid costly financial mistakes. They also help us overcome financially difficult times, such as an unexpected drop in income or a rise in interest rates. In addition, a financially literate society helps support a strong, resilient economy.
More than 6 out of every 10 Canadian adults rate their financial knowledge as poor, according to the Canadian Financial Capability Survey conducted in 2014. The survey also found that an equal number of Canadians do not know how much money they need to save to maintain their desired standard of living in retirement.
As a member of the advisory board of the International Network on Financial Education, which is chaired and supported by the Organisation for Economic Co-operation and Development (OECD), I can see that these issues are not restricted to Canadians. They affect citizens and economies globally. I have met with financial education strategists from around the globe who all have different ways of engaging even their most vulnerable population groups. It is a priority of mine to continue to work with this network and, more broadly, to understand what is working in other countries.
Canada’s national government places considerable emphasis on increasing the financial literacy of Canadians. I’m frankly thrilled with the progress we have made in the first year of my mandate.
One of my first priorities as Canada’s Financial Literacy Leader was to develop a strategy to increase the financial well-being of seniors, as the first phase of a broader national strategy for financial literacy. My team and I sought input from stakeholders who offer financial education and other services for seniors. We received written submissions from organizations and individual Canadians, and heard from dozens of stakeholders groups during in-person consultation sessions across Canada. The input we received during this process provided valuable insights for Canada’s first financial literacy strategy for seniors (and soon-to-be-seniors), which was published in October 2014.
The seniors strategy was Phase I in developing an overarching national financial literacy strategy for all Canadians. Subsequent public and stakeholder consultations were completed last fall to ensure the larger strategy meets the needs of newcomers to Canada, Aboriginal people, Canadians with low incomes, youth and the general adult population. This is informing our views as to expectations for financial literacy in 5 to 10 years; we intend to release the national strategy later this year.
Canada’s Minister of State (Finance) Kevin Sorenson and I also established a National Steering Committee on Financial Literacy. The 15 members represent a broad range of experts from the banking, insurance and investment sectors, non-profits with experience working with priority groups, and regulators. I look forward to working with each of the committee’s members as we write and implement the national strategy.
Increasing Canadians’ financial literacy is a shared responsibility across all sectors. One example of this is Financial Literacy Month (FLM) in Canada. The fourth FLM, 2014, was the most successful to date. It generated more than 1,200 events involving over 35 organizations across the country from the public, private and non-profit sectors. Its success was palpable in the heightened dialogue about financial issues in both mainstream and social media throughout the month. Media coverage on financial topics of interest was steady, and this year’s engagement on Twitter was three times higher than in 2013, reaching more than 2.5 million people and transcending borders.
As we move forward, my aim is to sustain the momentum we have built through increased collaboration with, and coordination of financial education efforts among Canadian and international stakeholders. It is important not to confuse awareness with action, which is why I look forward to seeing tangible progress in helping Canadians to improve their overall financial well-being. There are still many hurdles to overcome and significant change will take time, but as I reflect on all that we’ve accomplished so far, and where we are heading, I remain convinced that 2015 will be another memorable year for financial literacy in Canada.