Making change

For many newcomers, changing countries means becoming familiar with a new financial system and making sense out of handling dollars.

When Fanny Tovar (above) arrived in Halifax from Venezuela in 2008 on an international student internship, it was a dream come true. With five years of university and a degree in agroindustrial engineering (food processing), she was eager to see the world and especially interested in improving her English and French.

The ending to her story is not exactly unhappy — she began her internship at Acadian Seaplants Ltd. and her fluency in Spanish landed her a full-time job as head office liaison with the company’s Latin American operations. She is now a permanent resident and has moved to Toronto to look for a job that will better utilize her degree.

But her transition to life in Canada was not without challenges. And Tovar, who recently participated in a financial literacy program at the Immigrant Settlement & Integration Services (ISIS) in Halifax, says those challenges would have been easier to meet had she sought more advice in the beginning about personal finance.

Like many new immigrants, Tovar had to overcome cultural differences and learn the ins and outs of managing money in Canada. She had to learn where to get help filing income taxes, something she had not done at home. Budgeting and juggling credit card payments became an issue and she worked with a bank to consolidate her debts. She learned that too much of her paycheque was going to rent, a situation that affected her ability to obtain credit.

"It’s about budgeting and discipline and education," Tovar says, adding that financial jargon is difficult to understand for people whose first language is not English. "You need to ask a lot of questions." If she could give one piece of advice to new immigrants, it would be to start asking questions early and not wait as long as she did to seek advice.

Navigating the Canadian credit system is a hurdle for many immigrants, says Kapila Dimantha, coordinator of the Career Pathway Loan Fund at ISIS. "Many people come from different systems altogether," he says. "They want to learn how to manage but it’s hard to find out about all the small hidden details."

For example, immigrants don’t realize that when car shopping they shouldn’t have credit checks run until they decide on a purchase because numerous credit checks can affect their credit score.

Another misconception is that applying for many credit cards is a quick way to establish credit. "They are spoiling their credit," says Mohja Alia, manager, employment and bridging programs at ISIS. "It is better to start with one credit card and be consistent with it."

"There are so many things [new Canadians] don’t know," she says. "Like what it means to have an overdue payment and how it affects the relationship with their bank and with the whole system."


Stella Osagie 

Stella Osagie (above) is a quick learner. The 49-year-old mother of three boys moved to the Toronto area in 2011 from Lagos, Nigeria, with her husband because they wanted their sons to have better post-secondary opportunities. She helped them complete their university admissions before the family left the country. But when it came to diving in to the Canadian credit system, Osagie had a lot to learn.

Osagie, who works with a community development agency in Toronto, received advice on budgeting at a financial literacy program at North York Community House (NYCH). Budgeting in Canada is different, she says, because prices are relatively stable here compared with Nigeria, where costs can fluctuate unpredictably.

She learned how to save money by finding low-cost banking services, being on the lookout for discounts and using coupons. "It’s one dollar here, five dollars there, but it all adds up," she says. At first money was tight, but the family is settled now, has bought a house and is saving in an RRSP.

"It was a good program," she says of NYCH, which helps more than 25,000 newcomers annually. "There was so much I didn’t know."

Some newcomers also need explanations about the credit system.


Aman Sran 

"Today we are learning about credit cards," says Aman Sran (above), during a break at a financial literacy workshop in the Future Leaders Program at DIVERSEcity Employment Services in Surrey, BC. "We are learning how to build up a credit history, to use the cards carefully and to repay on time. We had no credit cards in India, so everything was paid with cash or cheque."

Sran, 22, who arrived in March from India with her extended family, already has a job and plans to save for her education. She said a critical point taught at the seminar was how to guard against fraud. "We learned to be aware of imposters," she says. "And not to share our passwords and to protect our email addresses."

In addition to the many agencies that help newcomers, Canadian banks are stepping up efforts to provide new products and services that can help immigrants get settled.

"There’s diversity in terms of the amount of advice and education" given, says Christine Shisler, director of multicultural markets at RBC. "It may be a little and it may be a lot. But the one common challenge that we continue to see from all newcomers is the lack of Canadian credit history and that has been a focus for us over the past few years."

The bank has, for instance, made it easier for newcomers to buy cars with no-credit-history car loans at dealerships throughout Canada. Its mortgage program for newcomers enables immigrants to obtain mortgages within five years, with or without established Canadian credit.

There are also other ways to assess a customer’s capacity to take on debt, Shisler says, so newcomers should not be afraid to discuss their situation with a bank.

Many banks are also stepping up efforts to address financial literacy for immigrants, with programs where new arrivals can find information and seek advice. "[It] is in response to newcomers having so much to deal with when they first arrive," says Tracy Gomes, vice-president of multicultural and aboriginal banking at Scotiabank. "It’s a tough transition coming to a new country and the program is geared toward eliminating some of that initial anxiety."

In July, the bank launched a credit card with a maximum $5,000 limit for people who have jobs lined up, even if they have no Canadian credit history. Permanent residents without a job are given a credit limit of $2,000. CIBC and TD also offer credit cards with low limits for those without credit histories, as well as other products and services aimed at newcomers.

One bank has established a pre-arrival help system that includes the transfer of funds to Canada so that things can be set up from Day 1. As well, it participates in webinars — aimed at people coming from India, the Middle East, the UK and the Philippines — that explain the initially impenetrable system of acronyms newcomers face, such as ABM, GIC, RRSP, RESP and TFSA.

There are various fundamental differences regarding cash and credit that can be a challenge to those coming from other countries. People from places such as China where cash is king may need to be shown how to write a cheque, Gomes says. Some new arrivals from Europe are used to having one piece of plastic that acts as both a debit and a credit card.

And many immigrants are not used to the centralized Canadian credit-tracking system, which means that credit established with one institution can be leveraged when it comes to buying cars and homes with other lenders. That was something new for Osagie. "It was easy to make money back home," she says. "But you don’t use credit. You buy everything by cash. You even buy a house by cash. And you have to pay for the whole thing. So that was a major shift."

At first she was afraid of getting a credit card because she didn’t want to "get into trouble." But at NYCH she learned the importance of establishing a credit history. "I learned that for you to build your credit you have to spend money, use your credit card and pay it back," she says. "The program explained how to use it wisely."

Gomes says it takes about six months of credit-card transactions to establish a credit history that can be used to apply for other types of credit at other institutions. The bank can also facilitate car loans and mortgages for people with no Canadian credit history.

Such services indicate a broader move on the part of financial institutions toward assisting newcomers and providing advice. And that’s a good thing, newcomers say, because the need is there, as is the desire to learn.

"I needed to know everything," says Rishab Dhoopar, who recently took the financial literacy workshop offered by DIVERSEcity in Surrey. The 18-year-old, who arrived with his family from India in July, has wasted no time. He opened a bank account, is interviewing for customer service jobs and preparing his short list of universities where he can apply to study engineering.

"The program was a big help to me," he says.


CPA Canada’s Financial Literacy program, Financial Decisions Matter, aims to deliver unbiased, objective financial literacy education and information to Canadians as a public service. When CPA Canada talked to new Canadians about financial literacy, many said they noticed a big difference in the way finances are handled in Canada compared with what they were used to. To address this concern, CPA Canada developed Financial Matters for New Canadians, an educational series that explores some basic aspects of personal finance and gives new Canadians a head start at gaining the knowledge, skills and confidence to make responsible financial decisions.

Part 1

of the series, Tips and Secrets Smart Canadians Know, focuses on three areas that may be unfamiliar to new Canadians. The session begins with a discussion about the fundamentals of the Canadian banking system. Participants are introduced to various types of bank accounts and banking services, including ATMs, debit and credit cards, and learn how to go about selecting the most cost-effective combination of banking services to meet their personal financial needs.

Part 2

of the series, Building Wealth in Canada, addresses more advanced concepts of basic money management and financial planning. The purpose of the session is to help newcomers understand how to effectively manage their money now, so that they can plan their financial future, build and protect their financial assets and make sure they can financially handle major life events when they occur. If you are interested in volunteering to present one of these sessions or if you know of an organization that would benefit from this series, please contact