Learning to fish

A number of groups are working to improve Canadians’ financial literacy so they can fend for themselves.

During one of David Duong’s retirement planning workshops, a woman sharing her personal experience was wondering if she needed to make a will and take all the steps to see it through. Just talking about it with the group made her realize that she needed to take control not only of her life, but also her death, and have her say in the inheritance she would leave to family members.

“At the end of the workshop, she asked me to recommend lawyers to help her with her will,” recalls Duong, CPA, CMA and Investors Group consultant in Newmarket, Ont., who was facilitating the workshop as part of CPA Canada’s Community Connect program. “It was a defining moment in this woman’s life; I remember it very clearly. It’s this kind of eureka moment that makes leading these workshops so rewarding.”

We are currently seeing a major financial literacy offensive in Canada, and Duong is on the front line. It has become a hot topic “because the financial crisis made people realize how important financial literacy is,” says Terry Campbell, president of the Canadian Bankers Association (CBA).

It’s hard to count the many organizations active in this sector. “I don’t think anyone has made a list,” says Elizabeth Mulholland, CEO of Prosper Canada. Mulholland provides some figures that give a rough idea of the efforts made over the years. Her organization has trained more than 2,267 frontline stakeholders in 737 nonprofit organizations, First Nations communities and local governments. The financial literacy offensive revolves around seven provincial and regional organizations, all members of the Financial Literacy Action Group. The seven coalition members are ABC Life Literacy Canada, the Canadian Foundation for Economic Education, Credit Canada Debt Solutions, the Financial Planning Standards Council, the Investor Education Fund, Junior Achievement and Prosper Canada, one of the oldest financial literacy organizations.

Greater interest than expected

Many other players, such as CPA Canada, are active in this area. The workshops Duong has offered to lead for the past year are part of CPA Canada’s Community Connect program, which employs the skills and expertise of member volunteers as they give free financially focused sessions in their communities. Duong has already led some 20 workshops in small businesses, community organizations, libraries, schools and mosques.

These workshops cover a wide range of topics, including retirement planning, tax strategies, teaching kids about money and adopting healthy consumption patterns. More than 60 people attended one of his retirement planning workshops, which usually attract about 20 participants. “I had to get a mike and learn to speak more loudly,” he says.

Financial literacy activities are already well underway and are expected to gain even more momentum with the federal government’s recent implementation of the National Steering Committee on Financial Literacy, led by Jane Rooney (see “Giving Currency to FinLit”). Cairine Wilson, CPA Canada’s vice-president of corporate citizenship and a national steering committee member, explains, “The committee’s goal is to help every organization dedicated to the financial literacy cause.”

The committee, whose members include Campbell and Mulholland, will implement a national strategy. Wilson adds, “My role will be to promote this strategy to accounting professionals and business professionals and make sure CPA Canada’s programs contribute to attaining the strategy objectives.”

In addition to the free Community Connect workshops, CPA Canada has made books and tools available at www.cpacanada.ca/financialliteracypublications.

The banks, through the CBA, are also major financial literacy players. “We’ve been working on this since the 1980s,” says Campbell. “Since the 1990s, we have been giving free seminars in high schools, which has made it possible for us to reach 225,000 Canadian students.” The seminars are 60 to 90 minutes long and cover such topics as budgeting, setting financial goals, saving, interest rates and avoiding fraud. “We call it Money 101,” Campbell says.

Some organizations tailor their training options for diverse groups. For example, when the Edmonton Financial Literacy Society (EFLS) was established in 1995, “we were giving loans to people who could not meet the banks’ usual lending terms, and we realized that what people really needed were financial management skills,” says executive director Maria Tchir.

The EFLS offers courses to elementary and high-school students, their parents, immigrant communities, First Nations and seniors. A targeted approach is used to reach these groups. For example, when dealing with First Nations, the organization contacts the elders, who then share the information with the community. “We act in a way that is culturally appropriate,” says Tchir.

Community outreach

Financial literacy entails more than courses and seminars. Many organizations use an interactive approach in the field to raise awareness among less affluent individuals and families. Having all the financial information and tools is not enough: financial literacy needs to be put into practice, which requires tangible support. A fundamental aspect of it involves learning how to fill a grocery cart wisely.

Quebec, for example, has 40 consumer rights organizations, including 22 family savings cooperative associations (ACEF). These associations emerged in the 1960s and were among Canada’s first financial literacy advocates.

“Our primary mission is to help consumers with money matters, especially credit and debt, personal finances and budgeting,” says Jacynthe Nantel, a consumer adviser at the ACEF des Basses- Laurentides, north of Montreal.

And that involves three activities. First, individuals get personalized counselling and support. Someone in a precarious financial situation can meet with an adviser and based on his or her analysis, assistance can be provided, such as helping the individual make a budget and stick to it, developing a savings plan or consolidating bank debt. Every possible debt solution is considered.

Second, ACEFs provide information on financial literacy at women’s centres, community family organizations, schools and colleges, where people can learn how to budget and live within their means, be smart grocery shoppers, cope with the intricacies of a consumer society, buy a house, teach their children about finances and manage their money. “We want participants to develop the critical-thinking skills they need to become good citizens,” Nantel says.

The third level of action involves public affairs. “For example, when Loto-Québec wanted to put its video games online, we analyzed the issue and stated our position,” Nantel says.

Organizations such as ACEF are found across Canada. Alberta, for example, has six Money Mentors offices, which offer credit counselling and financial evaluations free of charge. Its money coaching services cost $100 an hour.

Likewise, Credit Canada Debt Solutions, with 14 offices in Ontario and Quebec, offers services similar to Money Mentors’. A review of a client’s financial situation is free, but there is a small fee to enrol in a program.

Fragmented efforts

According to Mulholland, even though financial education is making headway in Canada, efforts remain piecemeal. This is why Prosper Canada is seeking to play a unifying role and increase effectiveness by better integrating various initiatives.

For example, Prosper Canada does not offer counselling but focuses on promoting financial education in the broader sense within local communities. “Financial education alone won’t solve anything if the person involved is unwilling to change his or her behaviour,” Mulholland says. “As Canadian champions for the cause, we want to cover the five pillars of financial literacy: financial information, education and counselling; access to income-boosting benefits and tax credits; safe and affordable financial products and services; access to savings and asset building opportunities; and consumer awareness and protection.”

Mulholland notes that no organization addresses all these mandates at once, which is why Prosper Canada encourages new initiatives to form a coalition of groups to implement a network that covers the five pillars. The organization is paving the way to the future of financial literacy “to help Canadians develop genuine financial intelligence,” says Mulholland.

CPA CANADA’S CONTRIBUTION to financial literacy activities is significant. Since the Community Connect program was launched in 2013, more than 9,000 CPAs have gotten involved, facilitating “workshops in about 100 communities nationwide,” says CPA Canada’s Cairine Wilson. “And CPAs are continually joining the network. Our members’ response and enthusiasm has far exceeded my expectations.” (Anyone interested in becoming a Community Connect volunteer should contact community-connect@cpacanada.ca.)