Financial illiteracy is becoming one of Canada’s most urgent challenges, with many citizens struggling to understand the basics of finances. This lack of knowledge is the cause of many societal ills, including increased personal debt and insufficient retirement savings. As these issues increase, experts are calling for a collective effort toward better financial education.
A 2024 survey by the Financial Consumer Agency of Canada shows that nearly 40% of Canadians find it difficult to manage their money effectively. Many people lack financial literacy, which affects not just families but the national economy, too.
“Financial literacy is more than just a personal skill—it is a necessity in society,” says Serge Robichaud, an experienced financial advisor in Moncton, New Brunswick. “Without it, people make avoidable mistakes that can lead to long-term financial instability.”
Household debt in Canada has reached worrying levels. Statistics Canada reports the average Canadian owes $1.82 for every dollar earned after taxes. Much of this debt comes from a lack of credit management or a failure to budget effectively.
Efforts to combat financial illiteracy are making progress. For instance, initiatives like the Financial Consumer Agency of Canada’s National Strategy for Financial Literacy are in place to improve Canadians’ financial skills. But the reality remains that many people rely on informal advice from family, friends, or unpredictable online sources. In other words, they’re not consulting with a professional.
“Your financial health should be seen in the same light as your physical health, in the sense that you want to entrust something so important to a well-trained professional in the field,” says Robichaud.
In vulnerable communities lacking access to professionals, financial illiteracy keeps poverty cycles. Too many people turn to predatory loans or misuse costly products due to a lack of education. Studies consistently show that efforts at improving financial education among underserved groups reduce wealth gaps, providing fairer opportunities for economic advancement.
Another area where financial illiteracy takes a toll is retirement planning. A 2023 Ipsos poll shows nearly half of Canadians aren’t saving enough. Many are unaware of Registered Retirement Savings Plans (RRSPs) or Tax-Free Savings Accounts (TFSAs) potentially growing savings significantly over time.
Robichaud believes school programs and workplace initiatives could equip Canadians with the knowledge they need to secure their future finances. He proposes that accessible resources and workshops could help demystify these tools and encourage proactive saving habits.
One innovative approach to retirement planning is gamified learning tools. Several organizations have started using mobile apps that simulate real-life financial decisions to educate users on saving, budgeting, and investing. These tools help make difficult concepts more accessible and engaging, particularly for younger generations who benefit from early exposure to financial planning.
Financial illiteracy affects more than just personal finance. A 2022 report from the Conference Board of Canada found that 55% of Canadian adults lack numeracy skills, which has an obvious effect on their ability to manage finances. Addressing this learning gap could reduce persistent financial pressures and help build a stronger economy. “When individuals make informed financial decisions, the benefits ripple outward to the entire society,” notes Robichaud.
Financial stress has a significant impact on workplace performance. A 2023 PwC study showed that financially stressed workers are less productive and are more likely to be absent from work regularly. Employers are beginning to see the value of financial wellness programs as a way to increase employee engagement along with lowering turnover. This further demonstrates that prioritizing demonstrating that solving financial illiteracy creates positive results for both people and companies.
As gaps in financial literacy lead to more critical consequences, financial experts like Serge Robichaud are pushing for big changes, including increased access to education and professional advice.
“We need to build a culture where basic financial literacy skills are considered as essential as reading or writing,” insists Robichaud. “When people know how to manage their finances, they make choices that benefit themselves plus society overall.”
