Financial Literacy Newsletter – November 2021

Infographic: Make change that counts!

Make change that counts!

A few words from FCAC’s Deputy Commissioner, Research, Policy and Education

Welcome to the Financial Literacy Month Edition of the Financial Literacy Newsletter! November 2021 marks the 11th annual Financial Literacy Month, and inspired by the renewed National Financial Literacy Strategy, our theme this year is “Make change that counts!”

It is almost a year since we started talking with stakeholders across the country about what the renewed National Strategy needed to do in order to make meaningful difference in the financial lives of Canadians. In Strategy renewal consultations that commenced during FLM 2020, stakeholders were clear that a national financial literacy strategy should remain a priority, but that literacy alone would not lead to better financial outcomes. To keep moving the needle, the financial ecosystem needs to evolve such that it can be used effectively by all Canadians, and such that it can reach more Canadians, in particular, people facing the most challenges due to barriers or circumstance.

With this in mind, our National Strategy lays out a framework for stakeholders across our country to work together to reduce barriers and catalyze actions that will help create an inclusive, accessible, and effective financial ecosystem for all Canadians. Alongside these ecosystem changes, the Strategy also proposes that stakeholders help consumers develop 5 key consumer building blocks which, in concert with the ecosystem changes, will help Canadians build financial resilience.

With FLM 2021, commences the work of implementing and evaluating the new National Strategy. This FLM edition newsletter speaks to some of our ecosystem’s early endeavours in this regard.

First, I Invite you to read about the systemic barriers many Canadians experience in their efforts to build financial stability, security, and resilience in the article by Prosper Canada.

Second, I’m delighted to share the details of our "Building Better Financial Futures" student competition. This 2021 initiative was a FCAC paper competition in which post-secondary students across the country were invited to propose actionable and evidence-based solutions to current financial challenges faced by communities with vulnerabilities. We received so many innovative, and inspiring submissions! Read on for more details.

Speaking about youth, Employment and Social Development Canada is sharing news about how the Canada Learning Bond is helping eligible 18- to 20-year-olds pay for post-secondary education. We hope you can spread the word about this great initiative.

Third, we share an article about the importance of budgeting and how it is a simple yet effective tool to manage your finances. FCAC’s Budget Planner was developed using behavioural economics to help consumers create a budget and stick to it. FCAC is looking to identify organizations who wish to collaborate with us to pilot a widget of our Budget Planner on their website. More details can be found below.

And now a topic close to my heart: building financial resilience for women. Women across our country have been disproportionately affected by the pandemic, and have suffered among the greatest job losses, stress, and increases in debt. Initiatives that aim to increase positive financial outcomes for women are a key priority of the National Financial Literacy Strategy. Later this month, FCAC is hosting a free women and money webinar, more information and a link to register can be found below.

On a related note, the Chartered Professional Accountants of Canada hosts a weekly podcast which, this season, aims to help women improve their financial wellness. Please read on below for more.

And last, but certainly not the least, this year’s Financial Literacy Month comes on the heels of FCAC’s 20th anniversary. There is so much worth celebrating in the progress we have made for financial consumers in Canada in the last two decades. I can say with absolute certainty that these would not have been possible without the contributions and the commitment of the stakeholders in our financial literacy ecosystem. Thank you, and Santé to many more years of progress to come.

Together, let’s make change that counts!

Supriya Syal Ph.D.
Deputy Commissioner, Research, Policy and Education
Financial Consumer Agency of Canada

Don’t be left out! Learn more about the Financial Literacy Month

Don’t forget to use #FLM2021 and join the conversation!

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Happy reading!

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2021 Building Better Financial Futures—Students rise to the challenge!

By: Financial Consumer Agency of Canada

This writing competition for post-secondary and graduate students, launched by the Financial Consumer Agency of Canada, was designed to foster the development of solutions to financial management challenges faced by vulnerable communities.

It was developed in collaboration with the members of the FCAC Research Committee, who are at the forefront of a wide range of financial literacy and consumer protection issues.

Dr. Dave Hayes, Senior Research and Experimentation Officer, is one of the FCAC’s subject matter experts. He went over the broad strokes of this initiative for us:

Why did the FCAC launch this pilot project?

Dr. Hayes: The competition is one of the ways the FCAC is seeking to strengthen stakeholder engagement with key audiences, including researchers and youth across Canada with an interest in financial literacy and consumer protection.

Participants were encouraged to leverage their creativity to propose actionable, evidence-based solutions to personal finance, financial consumer protection or financial literacy challenges, such as managing debt and savings, budgeting and navigating the financial marketplace.

What is significant about the papers selected?

Dr. Hayes: The competition asked students to provide a solution to one of the financial consumer challenges identified in the Review of Financial Literacy Research in Canada: Environmental Scan and Gap Analysis. Their papers identified a research priority (i.e. managing debt, navigating the financial marketplace, building savings and budgeting), a theme (i.e. mental and behavioural abilities, social determinants of financial well-being, financial technology and research in practice) and one of the target groups most affected by the financial challenge.

The numerous proposals submitted by graduates and undergraduates addressed almost every possible research priority, theme and target group. The FCAC was pleased to see such enthusiasm for the competition!

The successful authors—representing many regions of Canada—met all the criteria and came up with remarkable and creative solutions! The top papers in the undergraduate and graduate categories focused on improving the financial well-being of Indigenous peoples and low-income Canadians, while the runners-up in each category proposed the use of financial technology to help seniors navigate the marketplace and low-income Canadians prepare for retirement.

The successful authors and their solutions could be featured by FCAC in the coming months. Stay tuned for more information.

How do these types of activities help the FCAC achieve its goals?

Dr. Hayes: Activities such as the student competition help the FCAC realize its vision of being a leader and innovator in financial consumer protection by harnessing the entire financial sector ecosystem across Canada. The competition reached 1,600+ academics and student groups across the country. It also furthered the vision of the FCAC’s National Financial Literacy Strategy 2021–2026 to help build financial resilience for all Canadians, hence the search for ways and means to make this vision a reality.

Want to help improve the financial well-being of Canadians? Watch for news about this year’s chosen authors and a future FCAC student research competition.


Women’s financial literacy takes centre stage on the Mastering Money podcast

By: Chartered Professional Accountant Canada (CPA Canada)

The latest Edition of Chartered Professional Accountants Canada’s Mastering Money podcast is taking a look at the ways women can approach money and financial literacy in order to better their financial wellness. With episodes being released on a weekly basis, the podcast’s fourth season is tackling issues such as risk and investing, balancing family with work, starting a new career, finances after divorce or separation, and more. This is all part of a greater effort to help women discover their financial potential and make positive decisions to secure their futures.

What will be discussed?

The podcast delves into a number of complex topics and features expert advice from successful and knowledgeable women. In episode 1, titled “The money mindset - Changing the way women relate to money”, Vanessa Bowen, CPA and founder of Mint Worthy, discusses her challenges around money and how she took ownership of her financial life, while providing insight on how women can gain confidence in dealing with money matters that they tend to avoid.

Episode 2, titled “The “risky” woman - risk and investing for women 101” looks at the steps women can take to gain the confidence to make proper financial decisions that can help close the gender gap in risk and investing, with Lisa Zamparo, CPA, CA, Financial Strategist and founder of the Wealth Company leading the discussion.

Episodes 3 and 4 look at how women can assess their financial situations during two key periods of their lives: the start of a new career and becoming a mother. These episodes look at the unique challenges that await the working woman and the career-driven mother, and closely examine the financial strategies women can follow in order to secure positive financial futures.

Lastly, episodes 5 and 6 focus on two topics that may be more difficult to talk about: divorce and death. Certified financial planner Léony DeGraaf, CFP, CEA, EPC, takes a look at the issues women face when going through a separation or divorce and what they can do to set themselves up for independent financial wellbeing and success.

To close out the season, listeners will be guided through the process of widowhood, and given useful information for women on how to deal with money after the death of a spouse, how to get a handle on finances if you have not had that responsibility in the past, how to manage finances moving forward, basics on wills and estates, and where to look for help during this difficult time.

With all of these intriguing topics, this season of the Mastering Money podcast is sure to get plenty of interesting and important conversations started.

If you are interested in learning more, you can listen to CPA Canada’s Mastering Money Podcast today. CPA Canada also offers plenty of free financial literacy resources to get you on the right track to a positive financial future.

Making a budget: the best way to manage your spending

By: Financial Consumer Agency of Canada

If personal finances seem hard, you’ve probably been missing out on one of the best and easiest tools for putting yourself in the driver’s seat: making a budget.

A budget is a starting point for managing your personal finances. It’s a simple but effective way to make sure you are living within your means. Some professionals prefer the less scary term “spending plan.”

A budget showing your sources of income and your expenses can help you stick to a spending plan, develop a debt repayment or savings plan, distinguish between what you want and what you need, and set spending priorities.

Only by taking control of your finances can you reduce your financial stress and improve your mental and physical health, as well as build your financial resilience.

If you don’t know where to start, check out the Financial Consumer Agency of Canada’s online Budget Planner. It’s a tool that can help you manage your finances and figure out where your money is coming from and where it’s going. This free interactive tool allows to create a personalized budget and provides you with tips and suggestions to improve your financial situation. It also creates charts that demonstrate where your money goes and gives you the option to compare your spending habits with other Canadians in similar life situations. The Budget Planner allows you to save and update your budget online at any time or download an interactive spreadsheet, identify areas where you can cut back, and find potential savings.

Once you have a budget, you can start making a plan to be debt free and avoid taking on more debt. The FCAC’s online resources also feature other tools to help you manage your finances, including a step-by-step process for paying down debt, a financial goal calculator, a credit card payment calculator, information on debt management strategies and other valuable resources.

Taking control of your finances means taking the time to regularly review your budget. This can help you reduce your stress and strengthen your financial resilience. You can also save money by reviewing your financial products and services to make sure you’re actually using them. By regularly reviewing your budget and goals, you’ll be taking an important step towards financial well being and the realization of your plans and dreams.


Call for participants: The Budget Planner widget pilot project

The Financial Consumer Agency of Canada (FCAC) is looking for organizations interested in participating in a pilot project to help us evaluate and test our new Budget Planner widget. The project consists of incorporating a small application (widget) of our Budget Planner to your website for your visitors and partners’ benefit.

The Budget Planner is an innovative tool developed by FCAC that incorporates behavioral economics to encourage consumers to create and maintain a budget. It includes the ability to make a personalized budget, graphics, tips, suggestions, useful links and even badges to earn. Here is a short video demonstrating the many features of this interactive budgeting tool.

If you’re interested in the project, please send us an email!

Canada Learning Bond for 18- to 20-year-olds

By: Employment and Social Development Canada (ESDC)

Paying for education after high school can be expensive. The Canada Learning Bond (CLB) can help. Starting in January 2022, if you were born after January 1, 2004, and are between 18 and 20 years old, you may be eligible to receive up to $2,000 to help pay for your education after high school.

The CLB is money that the Government of Canada adds to a Registered Education Savings Plan (RESP) to help children from low-income families pay for their education after high school.

The CLB can be used to help pay the costs of full- or part-time studies in various programs and schools, including:

How much you could get

With the CLB, you could receive up to $2,000 deposited into an RESP. The amount of money you will receive depends on the number of years that you were eligible to receive the CLB, before you turned 15 years old.

If you were eligible for the CLB and have not received it yet, the Government of Canada will deposit into an RESP:

You do not need to add money to an RESP to receive the CLB.

How to apply

You have from the age of 18, and up until the day before you turn 21, to open an RESP and apply for the CLB.

You do not need to have a bank account to open an RESP, and you do not need to put money into the RESP to receive the CLB.

To request the CLB, you will need:

  1. a valid social insurance number (SIN):
  2. a Registered Education Savings Plan (RESP):
    • if you do not have an RESP, contact an RESP promoter that offers the CLB
    • some promoters offer options to open an RESP online, over the phone, or in person
    • the RESP promoter will help you complete the application form for the CLB and will submit your application to the Government of Canada on your behalf

Once the Government of Canada deposits the CLB into your RESP, you can use the money to help pay for your education expenses or keep your RESP open to save the money for your future education. You do not need to decide right away. An RESP can stay open for up to 35 years.

Tackling systemic barriers can help Canadians become more financially resilient

By: Prosper Canada

Systemic barriers occur when practices and/or policies are put in place that discriminate against individuals on purpose or by accident and stop them from participating.

When it comes to achieving financial resilience, we all need access to safe and affordable financial products, services, and advice that meet our specific needs, and enough income to both cover our basic needs and build emergency savings against life’s unexpected events. However, systemic barriers prevent some communities and groups from accessing these financial building blocks, leaving them more financially vulnerable than other Canadians and frustrating their efforts to build financial stability, security, and resilience.

Here are some key systemic barriers to financial resilience arising from market limitations and a minimal understanding of the needs of certain groups when we design products, services, and programs for the broad public:

  1. Absence of mainstream financial services in most northern and remote communities, and many rural communities and low-income urban neighbourhoods. Banks and credit unions do not service all communities. Without access to safe and affordable basic banking services, these communities often rely on higher-cost and/or higher-risk alternatives that can affect their longer-term financial resilience. Public-sector solutions like postal banking and, increasingly, mobile and fintech financial solutions may be able to address this market barrier, but more focused action is needed to address this barrier for these communities and consumers.
  2. Low or no internet access for remote and rural communities with limited broadband access and people who cannot afford costly internet plans and/or lack digital literacy. As financial services become increasingly digitized, internet access is rapidly becoming a necessity for financial inclusion. Efforts underway to expand internet infrastructure in remote and rural communities are helping but need to be accelerated. Access to a universally accessible, low-cost, internet plan for people with low incomes and more targeted investments in digital education for adult learners that risk being left behind would contribute to addressing this barrier.
  3. Lack of accessible, quality, financial help for those without money to invest. We can all benefit from quality financial help to set goals, build action plans to achieve them, and solve financial problems, but professional financial help services can be expensive or only available to those with money to invest. Low- and moderate-income Canadians have fewer places they can turn for affordable quality financial help, even though it is as essential to them as other Canadians. To address this barrier, Canada could consider the approach of other nations like Australia, the U.K., and New Zealand that are investing in community financial help services and/or building financial help into public services that touch financially vulnerable groups, as they are doing in the U.S.
  4. Difficult to navigate tax and benefit systems that are not designed for the diversity of users, such as those with language, literacy, mobility, digital, cognitive, mental health, disability, and financial limitations. This results in low tax-filing and benefit take-up rates and people losing access to income benefits they are eligible for because they cannot always understand or meet documentation requirements. Inability to tax file can also result in not having access to community and in-kind supports that are only available to those who have filed their taxes and qualified for “gateway” tax credits and benefits – e.g. the Disability Tax Credit or Canada Child Benefit. More attention focused on better meeting user needs and improving user experiences when accessing benefits and engaging with administrative processes could help make tax filing and accessing benefits easier (e.g. through solutions like auto-filing simple returns). Ensuring access to free tax-filing and benefit help for people with low incomes who need it would also help with this barrier.
  5. Biased attitudes with respect to equity-seeking groups persist in society and can negatively impact financial inclusion and opportunities for affected groups. Biases may be conscious or unconscious, but their effect is the same regardless of intent. More intentional and coordinated efforts by all sectors are needed to identify, monitor, and address systemic racism and discrimination where it occurs in the design and delivery of financial services and relevant government programs and to promote greater diversity, equity, and inclusion.

The combined impact of these and other systemic barriers that can prevent participation in the financial marketplace (market products and services, and government programs) is to interfere with people’s ability to achieve a sufficient income, save, access safe and affordable credit, and invest effectively in their futures. This, in turn, leaves them more vulnerable in the face of life’s unexpected events, as the current pandemic has shown us so clearly.

Canada’s new financial literacy strategy, Make Change that Counts: National Financial Literacy Strategy, is an invitation for all sectors to acknowledge and work together to dismantle these and other barriers so that all Canadians have access to the financial products, services, and advice they need to build a better financial future and their resilience against future economic shocks.

Together, we can make change that counts!

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