Financial literacy background
In the mid-1990s, financial education or financial literacy emerged as a key priority for many countries around the world. More and more government officials began to recognize the broader economic implications of their citizens’ poor financial knowledge and decision-making on their national economies, and how it could lead to significant global repercussions.
During this time, Canada’s government set in motion an extensive period of review and public consultations. These resulted in a series of reforms to Canada’s financial sector and the creation of the Financial Consumer Agency of Canada.
FCAC and financial literacy
The Government of Canada established the Financial Consumer Agency of Canada (FCAC) in 2001 to protect and educate consumers of financial services. Along with its regulatory oversight of financial institutions, FCAC was tasked with improving Canadians’ understanding of the financial sector, its products and services.
In its first few years of operation, FCAC concentrated on improving the availability, accessibility and clarity of financial information for consumers. In addition, the Agency commissioned surveys to measure the financial knowledge of Canadians. The results showed that many consumers lacked the basic financial knowledge needed to make sound decisions about their money.
Seeing the need to strengthen the financial literacy of Canadians, FCAC decided to initiate a national discussion with key stakeholders from across the country. The Agency organized Canada’s first national conference on financial literacy in June 2005. Canadians and Their Money: A National Symposium on Financial Capability highlighted existing research, policies and practices in the area of financial capability, and participants discussed what could be done to improve the situation in Canada. For more information, read the synthesis report on the conference, Why Financial Capability Matters.
Recognizing the need to improve the financial knowledge and decision making of consumers, the Government of Canada expanded FCAC’s mandate in 2007 to officially include financial literacy. At the time, the Government allotted new funds to the Agency to develop a financial literacy program for youth. Then, in its 2008 budget, the Government provided ongoing funding to FCAC to support efforts to improve financial literacy in Canada, not only among youth but for other audiences as well.
In September 2008, FCAC held Canada’s second national conference on financial literacy. Reaching Higher: Canadian Conference on Financial Literacy examined innovative solutions, discussed ways of measuring financial literacy and called for a national strategy on financial literacy. For more information, read the synthesis report on the conference, Moving Forward with Financial Literacy.
FCAC organized a third conference in 2011. Partnering to Turn Financial Literacy into Action discussed avenues for future work to help governments develop national strategies for financial education, as well as to help stakeholders design and implement more efficient financial literacy programs. For more information, read the synthesis report on the conference, The Future of Financial Education.
In November 2014, FCAC held a fourth conference. The event served to stimulate national dialogue, cooperation and teamwork among stakeholders across the country. Delegates also participated in roundtable discussions to provide input towards a national strategy for financial literacy. For more information, read the synthesis report on the conference, Strengthening Financial Literacy through Collaboration: Highlights of the 2014 National Conference on Financial Literacy (PDF, 4 MB).
Task Force on Financial Literacy
In 2009, the federal government created the Task Force on Financial Literacy. The Task Force travelled across Canada to meet with stakeholders, listening to what they had to say about financial literacy and learning from their experience. In its final report, Canadians and Their Money: Building a brighter financial future, presented to the Minister of Finance in 2011, the Task Force stated:
Financial literacy is critical to the prosperity and financial well-being of Canadians.
Financial literacy is having the knowledge, skills and confidence to make responsible financial decisions.
- Knowledge refers to an understanding of personal and broader financial matters;
- Skills refer to the ability to apply that financial knowledge in everyday life;
- Confidence means having the self-assurance to make important decisions; and
- Responsible financial decisions refers to the ability of individuals to use the knowledge, skills and confidence they have gained to make choices appropriate to their own circumstances.
Armed with financial knowledge, skills and confidence, Canadians are better able to:
- Make day-to-day choices about how to spend their money and stay on top of financial obligations;
- Navigate the ever-changing financial marketplace and buy the products and services that make the most sense for their own needs;
- Plan ahead about how to use their hard-earned dollars for life goals, such as buying a home or preparing for retirement;
- Deal with local, provincial and national government programs and systems that are often complicated and confusing, even to experts;
- Evaluate the financial information and advice they get, whether from friends, the media or professionals; and
- Make the best use of the resources they have, including workplace benefits, private and public pensions, tax credits, public benefits, investments, home equity, access to credit and consumer spending power.
(Canadians and Their Money, pages 4, 10–11)
Many of the Task Force’s recommendations have already been implemented, including the appointment of Canada’s first Financial Literacy Leader and the establishment of the National Steering Committee on Financial Literacy, both in 2014.
Canadian Financial Capability Survey
First developed and fielded in 2009 by Statistics Canada, the Canadian Financial Capability Survey collected information about the knowledge, abilities and behaviour of adult Canadians regarding financial decision making.
The national survey asked respondents about their approaches to day-to-day money management and budgeting, longer-term money management, and general financial planning. The survey helped shed light on how Canadians understand their financial situation, the financial services available to them and their plans for the future.
The survey was conducted a second time in 2014.
Financial Literacy Month
In November 2011, FCAC and the Financial Literacy Action Group launched Financial Literacy Month. Several organizations from the public, private and non-profit sectors joined in the initiative designed to highlight the programs, services and tools available to help Canadians improve their knowledge, skills and confidence in making the best financial choices for themselves.
In March 2012, the Parliament of Canada officially designated November as Financial Literacy Month in Canada.
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