Canadian business leaders concerned about consumer debt levels

In the latest CPA Canada Business Monitor (Q4 2014), a majority of business leaders surveyed in December 2014 expressed concern about Canadians’ personal debt levels. Learn about federal government and CPA Canada initiatives to help Canadians reduce debt.

Professional accountants in senior corporate positions voiced concern about the level of consumer debt currently carried by Canadians in the latest CPA Canada Business Monitor (Q4 2014).

The survey conducted in December 2014 included responses from over 600 professional accountants in both private and public companies.

When asked about consumer debt levels:

  • 59 per cent agreed that the current level of personal debt among Canadians is hurting the economy;
  • 50 per cent agreed that the current level of debt is a threat to future demand for products or services at their companies;
  • and 90 per cent agreed that the federal government and the Bank of Canada should continue to urge Canadians to reduce their debt levels.

Helping Canadians balance family budgets

The federal government shares the sentiment that there is a pressing need for consumers to reduce debt.

“Canadians understand the importance of living within their means and expect the government to do the same. We have been clear that we do not want Canadians to become overextended and urge households and governments in Canada to manage their finances in a prudent fashion,” says Joe Oliver, Minister of Finance.

He adds: “We are fulfilling our promise to balance the federal budget, while helping Canadian families balance theirs. Our government understands that families’ budgets are stretched. That is why we reduced the overall tax burden to its lowest level in 50 years.”

Improving financial literacy

To help equip Canadians with the necessary knowledge to make responsible money decisions, the federal government appointed Jane Rooney as Canada’s first financial literacy leader. The appointment took place in April 2014 and the position is tied to the Financial Consumer Agency of Canada (FCAC).

Rooney sees a valuable window of opportunity for consumer debt reduction. “Within the current environment with very low interest rates, FCAC’s message to Canadians is that now is a good time to pay down debt because rates will rise,” says Rooney.

An important part of her mandate is to help Canadians find the right information so they can manage money more effectively. The FCAC has developed many free online resources, including some on the topic of managing debt, including:

CPA Canada members: Helping Canadians improve financial literacy

As trusted financial experts, CPAs are involved at many levels, providing Canadians with unbiased, objective financial advice. “As front line professionals who interact with Canadians directly, CPAs can play a big role by sharing programs and resources Canadians can use to improve money management skills,” says Rooney.

Cairine Wilson, CPA Canada’s vice-president, corporate citizenship, oversees the organization’s financial literacy outreach efforts. She says, “Too many Canadians are making financial decisions that are not in their long-term interests. They need help with the basics: saving more, spending less and reducing debt.”

Wilson notes that the hardest part for many individuals is making the decision to take control of their personal finances. Canada’s accounting profession is helping to make that decision easier. Right now, there are thousands of professional accountants registered, trained and prepared to conduct free financial seminars in communities across the country through CPA Canada’s financial literacy program.

“These volunteers are giving back to their community and allowing others to gain financial confidence and knowledge,” says Wilson.

A busy 2015 lies ahead for CPA Canada’s financial literacy program including a new book on planning for retirement later in life.

“This book will interest individuals who haven’t been able to maximize RRSPS or pay off debt and therefore face financial challenges as retirement approaches,” explains Wilson. “Many Canadians face this type of situation but it is never too late to start saving money and the publication offers many practical tips.”

In addition to the book, CPA Canada is looking to expand its extensive volunteer network and to launch new education programs for university students and for employees in the workplace.

Canada’s accounting profession, through Wilson, also is playing an active role in the development and implementation of a national strategy for financial literacy. She is one of 15 champions on Rooney’s National Steering Committee on Financial Literacy providing input as the strategy is developed.