According to research from Statistics Canada, a majority of Canadians struggle with financial literacy. It is a big problem with serious implications for proper money management and retirement planning. The study helps explain why entrepreneurs are struggling to get new businesses off of the ground, and why so many families poorly manage debt and have insufficient retirement savings. Just as importantly, the study highlights an opportunity for proactive businesses, nonprofits, and government agencies to make meaningful change for a better future.
Many Canadians Falling Behind
The Canadian Financial Capability Survey, taken in 2014 and released in 2016, found a serious deficit in financial knowledge across all Canadians. When asked a series of 14 questions about interest, inflation, and risk diversification, most respondents failed to reach five correct answers. Men tended to score more highly than women, especially among older generations, but even 78% of men provided four or fewer correct answers.
Statistics Canada also explored the link between low levels of financial literacy and ineffective retirement planning. It found, among other things, that “the most financially literate labour market participants were not only more likely to be preparing for retirement, but also more likely to know how much they needed to save.”
The problems were not contained to individual civilians. In 2012 and 2014, Intuit surveyed hundreds of small business owners about their financial literacy experience. The results were underwhelming; 4-in-10 small business owners received a failing grade. Just 7% could correctly answer at least 90% of the questions.
Financial Literacy Month Canada
As part of its initiative to promote better financial understanding, the Government of Canada declared every November to be “Financial Literacy Month.” It also introduced Jane Rooney as the first Financial Literacy Leader and dedicated $3 million in public funds to promote learning and positive habit forming.
What Is financial literacy?
Being financially literate means having sufficient knowledge and decision-making skills to make responsible financial decisions. It means you know why you spend what you spend, and readily understand the short- and long-term implications of your money management. Think of it as having a grasp on financial consequences, trade-offs, and intentionality. If you want to learn more about money, investing, taxes, or any other finance-related topic, November is the perfect time to get started.
Inuit to Bring Solutions, Education, and Partnerships
Intuit is dedicated to closing the financial literacy gap in Canada. There are several outstanding financial literacy resources available for individuals and family members including:
- Activities, support groups, and online tools through the Financial Literacy Action Group
- A tremendous database of events, both in-person and virtual, available through the Financial Consumer Agency of Canada
- Online courses and tutorials through this FCAC
To help combat the problem of financial illiteracy among entrepreneurs, Intuit partnered with Startup Canada, the Chartered Professional Accountants of Canada, and numerous other finance organisations. The result is the National Startup Finance Initiative, a massive undertaking to help 2,500 entrepreneurs receive the necessary education, training, and advisory access to build sustainable businesses.