Getting a handle on financial literacy

It was in 2012 when the Canadian Government officially proclaimed November “Financial Literacy Month”.  Since then, the Financial Consumer Agency of Canada (FCAC) has turned their focus to encouraging collaboration between the private, public and not-for-profit sectors to help Canadians become more educated about their own finances, including managing money and debt wisely, saving for the future, and understanding their own financial rights and responsibilities.

This year’s theme, as found on the FCAC website, is "Invest in your financial well-being". The goal is to encourage Canadians to take control of their finances and reduce financial stress by making a budget, having a savings and debt reduction plan, and understanding their financial rights and responsibilities.
Throughout the month, FCAC will feature weekly sub-themes including:

• Week 1 (November 1 to 3) - Invest in your financial well-being
• Week 2 (November 4 to 10) - Have a plan to pay off your debt
• Week 3 (November 11 to 17) - Make informed decisions
• Week 4 (November 18 to 24) - Start good habits early
• Week 5 (November 25 to 30) - Take control of your finances

Financial literacy is a space where the Ontario Chamber Network has been extremely vocal, recognizing the importance of learning and understanding the fundamentals at an early age as a way to develop habits that will serve youth and our economy in the future.  Earlier this year in Hamilton at the Ontario Chamber AGM delegates passed a resolution called “Closing the Gap on Financial Literacy for Ontario’s Youth”.

The resolution, authored by the London Chamber of Commerce, suggests a pathway forward for government to consider, given that climbing household debt is increasingly concentrated among younger Canadians, with the most indebted borrowers tending to be under 45 years of age.  As well, two studies by PriceWaterhouse Cooper and BMO Wealth Management revealed that only 24% of millennials demonstrate basic financial literacy and yet, in the BMO study 23% cited paying down debt as their highest financial priority.   

In the past governments have made attempts to address the issue yet differing opinions on how to
approach it and move the needle have seemed to hold back movement.
The approved policy resolution offers the following:

1. Create mandatory elementary and secondary-level courses aligned with the Ministry of Education’s Transformation Steering Committee’s guidelines that address the following:

• a. The fundamentals of the Canadian banking system;
• b. Calculating and understanding various types of debt such as compound interest, bank loans, OSAP, credit cards, lines of credit, secured and unsecured loans, and mortgage payments;
• c. Retirement planning;
• d. Saving;
• e. Securities;
• f. Financial products such as RESPs, RRSPs, and TSFAs;
• g. Basic income tax; and
• h. Business financing and entrepreneurship.

2. Provide regular continuing professional development training for teachers required to teach this aspect of the curriculum with measurable standards teachers are required to meet.

3. Involve various stakeholders such as banks, credit unions and the province’s accounting body to assist with curriculum development.

4. Implement a standardized survey or test for students participating at various levels of this curriculum requirement to measure financial literacy rates among youth in Ontario.

5. Consult organizations such as Junior Achievement that have been delivering financial literacy programs for over 57 years.

This last recommendation is critical as the Chamber Network often encourages using the resources we already have in our communities.   Junior Achievement Peterborough Lakeland Muskoka is doing great work and has a series of programs it delivers to school aged children. 

The Ontario Chamber of Commerce also supports a program called Funny Money which is financial literacy information delivered in an assembly setting.

Ultimately, having a population armed with the tools and knowledge to manage finances is a proactive approach to ensuring a productive economy.