Nov 4, 2021
Canadians are more financially literate than they realize: Poll
Canadians are emerging from the pandemic with a lack of confidence in their financial knowledge, with many underestimating how much they actually know about topics like savings, debt, investing and insurance, a new poll has found.
The Canada Life Assurance Co. survey asked Canadians to rate their financial knowledge, then quizzed them on financial topics ranging from inflation and capital gains to the difference between a registered retirement savings plan and a tax-free savings account.
While the average quiz score was 71 per cent, only 41 per cent of survey respondents claimed high confidence in financial matters, revealing a disconnect between the financial literacy of Canadians and their confidence.
"This was a gut check on the basic financial knowledge of Canadians, particularly as we're coming out of the pandemic," said Brad Fedorchuk, executive vice-president, group customer, with Canada Life. "What we found was a gap between their knowledge and their confidence."
The poll serves as a baseline on the financial acumen and confidence of Canadians at the start of financial literacy month, which runs until the end of November.
Financial literacy is increasingly considered an essential skill akin to reading and writing. Experts say it includes the knowledge and ability to make informed financial decisions and take steps that lead to positive financial outcomes.
The poll found that Canadians in their 20s had the worst average quiz score, at 56 per cent -- yet they also expressed the most interest in learning about managing money, expenses, debt and savings.
"That group did score the lowest, but on the positive side that was also the group most interested in further education," Fedorchuk said.
This heightened awareness of the value of a financial education is something several organizations are hoping to take advantage of during financial literacy month and beyond.
Experts say the pandemic helped shine a light on some financial inequities in Canada, with shutdowns having a disproportionate impact on women, youth and low-wage workers.
They say the recognition that income and economic inequality are leaving some people behind has underscored the need for greater financial literacy.
Gary Rabbior, president of the Canadian Foundation for Economic Education, said Canada is increasingly making financial literacy a priority.
"There's lots of good progress being made in Canada and a lot of resources to help Canadians build financial literacy," he said. "We're in good shape and getting better. But there's a lot more we can do."
In particular, he said Canada could improve financial education in schools.
"There's a bit of a scattered nature to our education system," Rabbior said. "It does tend to be positive but it would be good to have some greater uniformity in how we address the financial literacy of children and youth across the country."
The foundation has partnered with CIBC to launch a challenge for youth aged 14 to 18 to develop new learning resources that will help teach financial knowledge and skills to other young people.
The "My Money, My Future" contest includes a top prize of $10,000.
The Canadian Foundation for Economic Education has additional resources, guides and programs on teaching financial literacy and learning about managing money on its website, including a program called Talk with our Kids About Money which has its own dedicated website.
Meanwhile, the Financial Consumer Agency of Canada has launched a theme for each week of November: Managing expenses to keep up with bills and credit expenses, managing debt, managing savings to prepare for financial shocks and achieve financial goals, and navigating the financial marketplace with knowledge and confidence.
"Financial literacy month highlights the importance of building financial resilience, especially in these challenging times," Judith Robertson, commissioner of the agency, said in a statement.
In July, the FCAC released a new national financial literacy strategy. The five-year plan aims to help Canadians improve their financial knowledge as the economy gradually recovers from the economic shock of COVID-19 and in the future.
The agency has financial tools and calculators and resources about managing money, debt and borrowing and savings and investments on its website. It also hosts events, such as a one-hour webinar about how women can save more money on Nov. 17.
The FCAC's website also has a Canadian financial literacy database, a complete list of financial literacy events and resources offered by Canadian organizations.
The Ontario Securities Commission also announced several investor education sessions this month on topics such as financial elder abuse prevention while the non-profit organization ABC Life Literacy Canada has launched free financial literacy resources for adults.
Chartered Professional Accountants of Canada also has a financial literacy program that offers education seminars through its volunteer network.
CPA Canada has various publications, including A Parent's Guide to Raising Money-Smart Kids, A Guide to Financial Decisions: Planning for the End of Life and A Canadian's Guide to Money-Smart Living.