Communiqué from Canada’s National Steering Committee on Financial Literacy: Implementation of the National Research Plan On Financial Literacy 2016-2018

From: Financial Consumer Agency of Canada

The National Steering Committee on Financial Literacy (hereafter referred to as the “Steering Committee”), chaired by the Financial Literacy Leader, received the final report of its Research Sub-Committee on the implementation of the National Research Plan on Financial Literacy 2016-2018. This report represents the final deliverable of the Research Sub-Committee. The committee’s two-year mandate came to an end in February 2018.

1. Thank you

The Steering Committee wishes to express our sincere gratitude to each and every member of the Research Sub-Committee. Collectively, members have come together to set the direction of the financial literacy research agenda for stakeholders across the country. At the same time, each member has contributed to generating evidence that feeds directly into the implementation of the National Strategy for Financial Literacy.

2. Key findings

The Steering Committee welcomes the key findings contained in the Research Sub-Committee’s report, which can be summarized as follows:

Financial knowledge vs. confidence

2.1 Financial knowledge is important, however, on its own is not enough to lead to financially desirable behaviours.

2.2 Financial confidence is a better predictor than financial knowledge when it comes to outcomes associated with day-to-day money and debt management.

2.3 More positive outcomes are found for longer-term planning and saving behaviours (e.g., investing, buying insurance), for individuals with high levels of both financial knowledge and financial confidence.

2.4 High financial confidence does not “shield” those with low knowledge from relatively poor planning and saving outcomes. Those with low financial knowledge but high financial confidence also have a higher risk of experiencing negative financial outcomes related to long-term planning and saving behaviour. This is especially evident in retirees and near-retirees.

2.5 Confidence is associated with persistent budgeting behaviour—those who created a budget and persisted with the behaviour demonstrate increased confidence in their ability to make and follow a budget. Those who discontinued budgeting, tended to be those who were less confident in their ability to do so.

Retirement well-being

2.6 When looking at the contributions of knowledge, skills and confidence on retirement well-being in Canada, the two most important elements of financial literacy are (1) financial confidence and (2) making use of advice on financial products. These variables are positively related to the indicators of financial well-being.

Making ends meet

2.7 Some Canadians have a difficult time making ends meet, and often many turn to debt to make ends meet.

2.8 Lower-income households are more susceptible to negative financial outcomes when faced with a financial shock such as a loss of income for six months. In this case, lower-income households have a greater risk of incurring more debt or relocating their principal residence.

2.9 Not enough Canadians have a budget.

2.10 Almost half of those who did not have a budget, do not know where to begin.

Behavioural insights

2.11 Understanding why and how consumers behave is an integral element in driving better financial decision-making.

2.12 Choice architecture and other behavioural techniques can enable individuals to save their tax refunds for emergencies and pay down debt.

2.13 Simplified, just-in-time information helps to bridge the gap between knowledge and decision-making.

2.14 The online environment is ideal for social norming and anchoring techniques (e.g., avatar-aided decision-making).

2.15 Informational tools, mobile applications and nudge interventions appear to be effective at solving well-known problems such as behavioural biases, and can be thought of as important complements to existing financial literacy interventions.

Indigenous Canadians

2.16 Indigenous Peoples face unique barriers to their financial wellness. These should be reflected in the design and delivery of financial literacy interventions as well as measurement tools to fully understand the financial behaviour of Indigenous Peoples.


2.17 Canada is one of the top-performing countries in youth financial literacy. Results also show that there is a subset of students in Canada who are not performing as well.

2.18 It is important for students to learn to manage money early in life. Opening a bank account and having ongoing conversations with parents about money seem to be ways to support them in doing this. For example, students that had bank accounts and students who discussed money matters with their parents once or twice a week scored better compared to their peers who did not.

Financial stress

2.19 Money is the main source of stress for many Canadians—higher than for work, health or family obligations. More than half of Canadians are interested in workplace financial education programs. Specifically, Canadians are most interested in financial education related to savings and planning.

2.20 Financial stress and life dissatisfaction are closely related. Specifically, individuals who identify financial stress as their primary stressor are less likely to report high life satisfaction.

Payday lending

2.21 Most payday loan users are borrowing to cover necessary expenses. In addition, many payday loan users are unaware of the high costs of payday loans compared to their alternatives. It is also important to note that payday loans are not used solely by low-income Canadians.

3. Concrete applications

The Steering Committee wishes to highlight the concrete applications that these findings can have in informing the development of financial literacy interventions, as well as the work of financial literacy practitioners and researchers.

Financial confidence, experiential learning and the importance of evaluation

3.1 There are several ways in which confidence and knowledge may be linked with financial decision-making. Research suggests that a one-size-fits-all approach to interventions is unlikely to reap dividends. Instead, interventions need to be informed by a better understanding of the mechanisms through which gaps in confidence and knowledge lead to poor outcomes. Interventions need to be tailored to the specific needs of those with different kinds of gaps. Further, experiential learning interventions are critical to increase financial confidence and knowledge. A learning-by-doing approach allows individuals to learn from their own experiences to implement successful strategies in money management.

3.2 Financial literacy interventions related to planning and saving need to address the potential negative effects of overconfidence on financial outcomes.

3.3 Financial literacy interventions designed in collaboration with evaluation experts, to ensure the impact can be assessed using appropriate methods, can provide valuable insights into what works, and for whom.

Behavioural insights and technology

3.4 Financial literacy programs and tools can be significantly augmented through the application of behavioural insights.

3.4.1 For instance, program participants might benefit from a just-in-time, follow-up email or text (e.g., during tax or RRSP season) that reminds them of key takeaways from a given workshop.

3.4.2 Online resources can benefit from visual aids and other devices that build on social norms and anchoring, to enable consumers to quickly choose the right option for them.

3.5 The use of technology (e.g., mobile apps) and incentives (e.g., rewards) should be optimised, where possible, to make financial education more appealing to Canadians.


3.6 When implementing and delivering financial education for women and girls, it is recommended that financial educators:

3.6.1 Identify specific ‘teachable moments’ and learning contexts, including schools, the workplace, women’s networks, communities, and self-help groups.

3.6.2 Tailor delivery methods to women’s needs, leveraging the influence of female role models, peer group learning and sharing, and the use of innovative tools.

3.6.3 Combine financial education with access to formal financial products and with entrepreneurial education to improve women’s overall access to economic and financial opportunities.

3.6.4 Systematically monitor and evaluate all financial education programmes, to help identify any divergence in expectations, learning preferences, and programme outcomes between male and female participants.

Indigenous Peoples

3.7 Findings from pilots conducted as part of the First Nations Financial Wellness Project should be considered in the development and delivery of financial interventions with Indigenous Peoples.


3.8 In contrast to traditional methods of offering financial education, a simulated, experiential approach may be more effective in engaging students on the topic of financial literacy and improving their financial knowledge, confidence and behaviours.

Financial literacy in the workplace

3.9 While there are large potential benefits from having a more financially literate workforce, the varying needs across workers should be taken into consideration when designing and offering financial education in the workplace.

Financial wellness

3.10 Financial wellness isn't one size fits all. Perceptions of financial wellness differ individually and culturally. Therefore, developing tools to help Canadians better understand and articulate their own financial wellness, is an important step towards improvement in all aspects of their financial lives.

4. Future research

The Steering Committee recognizes that work needs to continue to further inform the efforts of stakeholders who are collaborating to support the implementation of the National Strategy for Financial Literacy. We invite all members of Canada’s research community to build on the outcomes of our Research Sub-Committee’s work and leverage opportunities for future research.


4.1 Further research is required to identify and address barriers that may prevent women from accessing financial education and from improving their financial literacy, including cultural, social and legal norms that reduce women’s opportunities to learn about financial matters and to acquire financial skills.


4.2 Further investigation into the characteristics of students who are struggling could help determine the best ways of helping them attain the knowledge and skills required to make good financial decisions.

4.3 Further research conducted with parents and teachers to learn how to better prepare them to teach children about money, and to feel comfortable in their ability to do so, would be beneficial.

Understanding psychosocial factors influencing financial literacy

4.4 Financial literacy interventions designed to enhance Canadians’ financial well-being can be further informed by a better understanding of the psychosocial underpinnings of financial choices (e.g., financial confidence, perceptions of skills and financial knowledge). Further research to understand how to build financial confidence would be beneficial for the design and delivery of these interventions.

4.5 Current research exploring the role of psychosocial factors in financial decision-making is limited by cross-sectional data, meaning that cause and effect cannot be clearly established. Further research in this area would benefit from longitudinal data that explores financial decision-making and the contributing factors over time.

Behavioural insights

4.6 Behavioural insights (e.g., choice architecture, anchoring, social norming) have been shown to be effective in helping individuals parse through the volume of information available to them and to make decisions. Because financial situations are often unique to each individual, financial literacy is important in understanding options and assessing choices. As such, financial literacy research could benefit from further examination of the impact of behaviourally-informed interventions on financial knowledge and confidence.

Field experiments, asset poverty and financial stress

4.7 There is substantial variation in household behaviour that is much more complex than can be understood by measures of income and debt alone. Other factors, such as asset poverty and financial stress should be further explored.

4.8 More field experiments are necessary to better target financial literacy interventions and to evaluate what works, and for whom.

4.9 Further research is needed to better understand income and asset poverty in Canada and to inform the development of related social policies.

4.10 Additional research is needed to explore the relationship between family care-giving, financial stress and financial outcomes flowing from levels of literacy.

4.11 Further research is required to explore the relationship between subjective financial stress and indicators of objective financial stress such as debt loads and financial behaviour.

Program evaluation

4.12 Financial education in Canada would benefit from a systematic approach to measurement and evaluation. Further efforts are required to build capacity in this area, to empower service providers to evaluate their programs and to share the results of their evaluations.

Financial well-being

4.13 There is a growing movement towards the measurement of financial well-being as an indicator of success for financial literacy programs and interventions. Further research is needed to define financial well-being in Canada and develop a standardized measurement tool.

5. Next steps: Research Sub-Committee

The Steering Committee instructs the Chair of the Research Sub-Committee to work towards the renewal of a Research Sub-Committee, for a two-year term (2018-20), to provide assistance towards:

5.1 The continued implementation of Canada’s National Research Plan for Financial Literacy

5.2 The exploration of opportunities to transfer research knowledge with, and share learning among, financial literacy practitioners

5.3 The development and implementation of a strategy for securing funding for financial literacy research

About the National Strategy for Financial Literacy

The National Strategy for Financial Literacy—Count me in, Canada was developed to mobilize and engage public, private, and non-profit sectors to strengthen the financial literacy of Canadians and empower them to manage money and debt wisely; plan and save for the future; and prevent and protect against fraud and financial abuse.

About the National Research Plan for Financial Literacy 2016-2018

The National Research Plan for Financial Literacy 2016-2018 was developed by the Research Sub-Committee to guide research, evaluation, practice, and policy development in the field of financial literacy. The Plan built on key evidence and sought to fill critical research gaps in order to inform the implementation of the National Strategy for Financial Literacy—Count me in, Canada.

Researchers from Canada, as well as international collaborators, have conducted research related to the following topics:

  • paying down household debt
  • budgeting
  • building savings
  • understanding financial products and services in the increasingly complex marketplace

The empirical evidence that has been generated through the work of the contributors to the National Research Plan for Financial Literacy 2016-2018 is helping to inform the work of the research community as well as financial literacy practitioners.

About the Research Sub-Committee

The Research Sub-Committee was established in February 2016, on a two-year term.  It was made up of representatives from the public, private and non-profit sector. As evidenced by the following list, the members represented a diverse and complementary set of skills and expertise.

Members of the Research Sub-Committee were:

  • Bruno Lévesque, Chair, Financial Consumer Agency of Canada
  • Cairine Wilson, Co-Chair, Chartered Professional Accountants Canada (retired)
  • Simon Brascoupé, AFOA Canada
  • Derek Dedman, Financial Planning Foundation
  • Karen Duncan, University of Manitoba
  • Jan Dymond, Investment Funds Institute of Canada
  • Noah Gitterman, Consumer Protection Ontario
  • Jodi Letkiewicz, York University
  • Pierre-Carl Michaud, HEC Montréal
  • Jennifer Robson, Carleton University
  • David Rothwell, Oregon State University
  • Shishir Shahnawaz, Canada Mortgage and Housing Corporation
  • Dilip Soman, University of Toronto
  • Brenda Spotton Visano, York University
  • Evren Damar, Bank of Canada
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