Financial Literacy Newsletter – March 2022
Protecting your financial health
A few words from FCAC
The global pandemic has had an impact on the physical, mental, and financial health and well-being of Canadians. Just as we all take precautions to protect ourselves from illnesses, let's apply that same preventative mindset to our financial health.
It's important to take steps that will help you reduce financial stress and increase your financial resilience. That is, your ability to adapt or persevere through both predictable and unpredictable financial choices, difficulties, and shocks in life.
Budgeting, making a plan to pay down your debts, protecting yourself from financial fraud and scams, and creating an emergency savings fund are ways to protect your financial health and build your financial resilience.
With this in mind, FCAC has launched a national multimedia campaign to help Canadians build financial confidence. For instance, budgeting and budgeting tools like FCAC’s Budget Planner help Canadians to better manage their money and set financial goals, which contributes to increased feelings of control and confidence.
Inspired by the renewed National Financial Literacy Strategy, the campaign also encourages financial ecosystem organizations to adjust their actions to the needs and financial knowledge of consumers, in order to support them in their aim to build financial resilience.
As we move into March, we turn our attention to Fraud Prevention Month, which will focus on impersonation scams and various frauds that prey upon vulnerable consumers and businesses alike. FCAC, along with other federal departments and organizations, is using this time to further raise awareness about financial fraud – how to protect yourself and what to do if you fall victim to it.
March is also host to Global Money Week (March 21-27). Celebrating its 10th edition, this year’s theme is “Build your future, be smart about money.” Global Money Week is an annual global awareness-raising campaign on the importance of ensuring that young people, from an early age, are financially aware, and are gradually acquiring the knowledge, skills, attitudes and behaviours necessary to make sound financial decisions and ultimately achieve financial well-being and financial resilience.
In this newsletter, you will find tips on how to protect your personal finances and yourself from financial fraud, tax tips from the Canada Revenue Agency, and information on FinTech solutions being developed to help Canadians manage their personal finances.
Your financial health is essential to your well-being. Protecting it will contribute to your physical and mental health and your overall well-being. Many resources and tools are available to help you build your financial resilience.
Are any of the articles in this newsletter relevant to you? Feel free to share them with your network. Follow us on social media, on Facebook, Twitter, and Instagram. We are also on YouTube and LinkedIn.
Financial Consumer Protection Framework
Canada's Financial Consumer Protection Framework will come into effect on June 30, 2022. In support of the implementation of this new framework, FCAC recently published information on electronic alerts, a new requirement under the framework, and how they benefit financial consumers, as well as its Guideline on Complaint-Handling Procedures for Banks and Authorized Foreign Banks and its Guideline on Appropriate Products and Services for Banks and Authorized Foreign Banks.
Monitoring banks' compliance: banking services to seniors
The Code of Conduct for the Delivery of Banking Services to Seniors requires banks to publish annually on their websites reports on all the steps they have taken to improve banking services to seniors. FCAC has published the reports in an effort to promote consumer awareness.
New Debt Questionnaire tool
The Office of the Superintendent of Bankruptcy will be launching a new Debt Questionnaire tool on their Debt Solutions Portal in March 2022. The Debt Questionnaire aims to provide Canadians with reliable information and possible debt solution options in order to help them make the best decisions for them when dealing with financial problems.
Indigenous Community Support Fund
This Indigenous Services Canada fund provides Indigenous leadership and organizations with the flexibility needed to design and implement community-based solutions to prevent, prepare and respond to the spread of COVID-19 within their communities.
Find government benefits faster
The Benefits Wayfinder is an online tool from Prosper Canada that simplifies the search for federal and provincial/territorial government benefits by helping people on low and modest incomes find and track benefits they could get.
The Bourstad contest returns
The Autorité des marchés financiers and CIRANO are hosting the 35th edition of the Bourstad contest – a stock market simulation targeting high school and post-secondary students. There are over $35,000 in prizes to be won! The contest runs from February 14 – April 14, 2022.
Enhance your financial fitness
Like physical fitness, financial fitness can be a lifestyle shift that takes time and discipline. Forming healthy new habits doesn’t happen overnight.
To help you make realistic changes and build financial confidence, try following these tips.
Start small with a budget
In the spirit of continuous improvement, focus on the sprints instead of the marathon. If your ultimate goal is to save more money, make a plan that includes shorter-term, attainable goals along the way, such as sticking to a weekly budget. A budget is especially important if you have trouble paying your bills and do not know where your money is going every month. The Financial Consumer Agency of Canada offers free online tools such as a Credit Card Payment Calculator and a Financial Goal Calculator that can make it easier to achieve your goals.
The Budget Planner is an interactive tool which has many features to help you better identify your priorities, needs versus wants, and how to save money. It also lets you compare your spending habits with other Canadians in similar life situations. You can save and update your budget online at any time, or simply download an interactive spreadsheet.
With a good budget in hand, you will not only find yourself doing a better job of protecting your financial health, but you’ll also be closer to achieving your life goals and dreams.
Find a workout buddy
You’re more likely to stick to your physical fitness routine if you have a workout buddy. Why? A partner keeps you accountable, helps to create a positive and motivating environment, and just makes things more fun. So, challenge a partner, friend, or family member to improve their financial fitness along with you.
Don’t sweat the small stuff
If a sprained ankle kept you from running for a week, that’s no reason to give up your fitness goals. Maybe you’d try a Pilates video instead.
Likewise, if an unexpected expense like an emergency vet bill or parking ticket means you don’t meet your budget one week, it’s not the end of your budgeting; maybe it's an opportunity to think about incorporating some emergency savings into your weekly regimen.
Find more tips, tools, and resources you can count on at canada.ca/money.
Don’t fall for the latest online shopping scam
Canadians are relying on online shopping more than ever. However, this puts us at greater risk of being targeted by fraudsters.
Even if you’ve shopped online for years, it’s important to stay up to date on the latest tricks as scammers’ techniques evolve.
In recent years, they’ve gone from asking for wire transfers, banking details, and searching out your credit card number to going after gift cards, cryptocurrency and access to your online bank accounts.
Here are some key tips to protect yourself when shopping online:
- Do your research and comparison shop so you have a sense of realistic pricing
- Read the terms and conditions, as well as refund and return policies
- Use your Internet browser’s ad blocker to hide sponsored ads and pop-ups
- Request a full refund if your order is unavailable or can’t be fulfilled at the advertised price
- Keep any records of email confirmations and customer service conversations
- Review your credit card and bank statements frequently and carefully for recurring or unknown charges
- Remember that if the price is too good to be true, it probably is
- Take online reviews with a grain of salt, and consult multiple sources for feedback
Protect your personal finances from fraudsters
Here are some tips to protect yourself against all forms of fraud and scams.
Preventing credit and debit card fraud
- Check your account and credit card statements often to ensure that all transactions are correct and have been made by you
- Keep your PIN secret. Do not disclose it to anyone, not even family members or your spouse, and memorize it, rather than writing it down
- When transacting over the Internet, ensure that the website you are using is secure before providing any personal information
- Cover the keypad with your hand or body when typing your PIN so that no one can see it
- Complete your transaction and retrieve your card before responding to anyone who tries to get your attention while you are at an ATM
- Contact your financial institution or credit card issuer immediately if your card is lost, stolen or stuck in an ATM
If you have been a victim of fraud, the best thing to do is to report it to the appropriate authorities, no matter how big or small. Don't feel ashamed that you've been tricked, because you're not the only one who fell for it. By reporting this fraud, you will help others to avoid becoming a victim. In addition, in most cases, the financial institution will investigate and refund your money.
Dealing with unusual transactions in your accounts
- Change your PIN immediately and report the suspected fraud to your financial institution and the Canadian Anti-Fraud Centre. Also inform them of any suspicious correspondence you receive regarding your accounts.
- When contacting your financial institution, be sure to use the phone number on your account statement or on the back of your credit or debit card.
- Lodge a complaint with your financial institution. Financial scams often include offers to sell or promote financial products and services, such as retirement plans, managed investment funds, financial advice, insurance and credit and deposit accounts.
For more information, visit the Financial Consumer Agency of Canada website, which offers a wealth of information and tools to help you protect yourself against frauds and scams.
Take the Get Cyber Safe Checkup for more tips on how to keep your online accounts secure.
Tips to avoid real estate fraud
Real estate fraud is becoming increasingly attractive to fraudsters as housing prices rise in many markets across the country. Although it is one of the least known types of fraud in Canada, its consequences can be devastating. There are two types of real estate fraud that can result in financial losses:
1. Title fraud
Title fraud happens when the title of your home is stolen, and then the fraudster sells the home or applies for a new mortgage against it. Title fraud usually starts with identity theft, which can happen if somebody steals your personal information.
2. Foreclosure fraud
This usually occurs when homeowners seeking help with payments turn to a fraudster who convinces them to transfer their title in exchange for a loan. Often the fraudster keeps the loan payments and resells or remortgages the victim's home.
How to protect yourself from real estate fraud
- Protect your personal financial information
- Talk to your mortgage lender first if you are having trouble making your mortgage payments
- Consult your lawyer before giving someone else the right to take over your home or other property
- Research the company or person offering you a loan
- Conduct a title search with your provincial or territorial land registry office. This search will tell you the name of the owner and any mortgages or liens registered on the title
- Consider obtaining title insurance to protect yourself against title transfer fraud
No income? Doing your taxes could put money in your pocket
If you’re between jobs or have gone directly from school to caring for kids, you might have decided not to do your taxes. After all, why file if you have no income and nothing to pay, right? But not doing your taxes could mean you’re losing out on some money.
Even if you don’t have income to declare or are tax exempt, it’s important to do your taxes every year. Here’s why:
- You can claim tax credits, such as GST/HST, tuition or disability tax credits, as well as related provincial or territorial payments.
- You could be eligible for benefits, such as the Canada child benefit, old age security or the Canada workers benefit. These programs determine your eligibility by looking at the income reported on your tax return. Filing late could delay when you receive these benefits, so it’s also important to file on time.
- You could get a refund. A lot of tax refunds go unclaimed each year because people didn’t do their taxes. Last year, 14.9 million refunds were issued – the average amount was $1,845.
- If you do your taxes and realize you owe money, it’s better to find out sooner than later to avoid fees, penalties and interest. If you do end up owing this year, you can make payment arrangements and pay in instalments.
Feeling overwhelmed and aren’t sure where to start? Free tax help is available in your area if you have a modest income and need help doing your taxes. See if you’re eligible and learn more at canada.ca/taxes-free-help.
Other tax filing resources:
New course on tax filing
Check out Learn about your taxes, a course developed by the Canada Revenue Agency (CRA) to help students, first-time tax filers and new residents learn about their taxes and how to file a return on their own. The course will also help classroom teachers, educators, and community organizations teach the basics of tax filing.
Avoid last minute delays at tax time
Setting up MyAccount will help you avoid last-minute delays and waiting on the phone at tax time. CRA’s easy-to-use digital services allow you to view your tax and benefit information and update your CRA information ahead of time.
Innovate Financial Health Lab
By: Fintech Cadence
Events such as a workplace injury, unexpected loss of a job, or divorce can derail even the best laid out financial plans. While studies show that about half of Canadians practice some kind of budgeting or have a financial plan, 60% feel unprepared to deal with the financial ramification of these kinds of major life events. For low-income and financially vulnerable Canadians, “major” events that can lead to cycles of bad debt can be lurking around every corner: a broken-down car, kids home sick resulting in missed work shifts, or a stolen phone. Over the last two and a half years, Canadians have been grappling with these day-to-day and potentially life-altering financial realities in the context of an unprecedented global pandemic, and the uncertain financial impacts of public health measures on communities, families, and businesses.
Fintech Cadence is a national non-profit advancing technology solution that address the critical issues Canadians face in their day-to-day financial lives. Every year, Fintech Cadence selects 6 - 8 startups to participate in their 6-month Innovate Financial Health (IFH) Lab program where mission-driven entrepreneurs are provided the access to mentors, resources, capital, and partners required to expand their impact across Canada.
Technology plays an increasingly important role in how people are managing and interacting with money. At Fintech Cadence, we believe that this technology should be used to create a more accessible, affordable, and adequate financial services ecosystem. Already, we are seeing impressive Canadian and global solutions. Some exciting areas include:
Insurance can provide critical financial protection in the case of unexpected illness or disability, property damage, and the loss of a spouse/partner. While the pandemic has seen more people talking about insurance and their family’s financial futures, an Ipsos survey found that between 30 - 35% of Canadians don’t have any life insurance and 23% of Canadians say their families will not manage financially if they were to pass away prematurely. Fintechs like PolicyMe and Emma are making the insurance process simpler & more affordable through its digital processes while others are targeting traditionally underinsured populations, like Bounc3 and Catch for the self-employed.
- Emergency funds & short-term savings
Statistics Canada 2019 research found that over 35% of Canadians do not have an emergency fund covering 3 months of living expenses. A number of startups including IFH Lab alumni QUBER and MICC are working to make saving easier and more accessible by using savings challenges, getting employers to implement matched-based savings programs, and empowering individuals to leverage their local communities to support their savings goals.
The earlier you start your retirement planning, the more likely you are to be in a good financial situation when you get there. Yet a recent IPSOS study suggests that 59% of non-retirees, and as many as 39% of currently retired people, do not have a retirement plan in place. In the past, many Canadians relied on workplace provided pensions and retirement plans. But employment doesn’t look the same today and many of us no longer have access to these kinds of guaranteed retirement plans. Startups like Common Wealth Retirement are helping the modern worker prepare for retirement.
This is just a small snapshot of the exciting landscape of new financial technology startups in Canada and globally who are working to protect financial futures through the COVID pandemic and beyond. The need for these new approaches is clear, as younger generations demand digital solutions and COVID continues to make the necessity of offering virtual services essential.
The IFH Lab by Fintech Cadence is recruiting for its 3rd cohort. To learn more about the program, visit the IFH Lab web page for more information.
International Voices on Indigenous Economies
By: Bank of Canada
On November 29 and 30, 2021 the Bank of Canada, in partnership with the Tulo Centre of Indigenous Economics and Te Pūtea Matua (Reserve Bank of New Zealand), hosted the inaugural Symposium on Indigenous Economies.
The goal of the bi-annual conference was to share research, engage in meaningful discussion, and enhance collaboration among central banks and Indigenous partners.
Sessions over the two days focused on the experiences, history, contributions and barriers facing Indigenous Peoples in Canada and around the world. Indigenous and non-Indigenous experts, researchers, and economists shared research on Indigenous history and economic systems and discussed the contemporary economic landscape. Policymakers from the Central Bank Network for Indigenous Inclusion (CBNII) explored how central banks can incorporate these learnings into their own organizations and work.
In his opening remarks, Bank of Canada Governor Tiff Macklem spoke to the intention and impact of the symposium: “This symposium reflects our shared desire to work together internationally and within our countries—and most importantly, with our Indigenous partners—to learn from our histories and to do better. Together, we’ll define what reconciliation means for the work of the Bank of Canada—toward a more inclusive and prosperous economy for everyone.”
Chief Commissioner Manny Jules (First Nations Tax Commission / Tulo Centre of Indigenous Economics) responded to the opening remarks with an impassioned look at pre-contact Indigenous economies.
His presentation confronted participants with the painful chapters of Canada’s story and its ongoing inequalities. Illustrated by Chief Jules’ original ledger art (art drawn in a ledger book from the 19th century), his presentation spoke to Canada’s history of systemically removing Indigenous peoples from decision-making tables and economic and health benefits.
The discussions held throughout the symposium demonstrate a clear desire for change. Over the coming months, the Bank of Canada and its partners in the CBNII will continue to build on the strong foundation laid during this important event.
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