TORONTO - The federal government's Financial Literacy Task Force has launched a cross-country, multimedia fact-finding mission in a bid to better educate Canadians about the perils of amassing debt and increase their ability to manage personal finances.
Financial literacy has emerged as a key issue in the wake of the global economic crisis, with personal debt levels relative to income sitting at historic highs after climbing for two decades, said Donald Stewart, chairman of the task force and CEO of insurance giant Sun Life Financial (TSX:SLF).
"After the shock of the global recession, and its impact on both government and household planning and budgeting, many are looking for longer-term approaches that will put our economy on a sounder footing. Financial literacy is one of them," Stewart said Monday as the task force unveiled plans for a public consultation.
"It is time to make financial literacy a priority, to find ways to strengthen financial education among young people and help Canadian adults become more confident and knowledgeable decision makers."
The task force, announced by federal Finance Minister Jim Flaherty last June as part of the government's Economic Action Plan, will meet with Canadians in 15 cities across the country. It has also launched a website where Canadians can submit their questions about savings, debt and financial planning.
Issues under examination will include how to bring a number of disparate financial literacy groups into collaboration and how to integrate financial lessons into the school system. The group is also looking into developing a standard test to determine financial literacy.
The 13-member panel has studied programs at home and abroad, searching for ideas on how to best educate consumers and help them to build the knowledge, skills and confidence needed to make responsible financial choices.
They plan to integrate the best practices from other countries, along with suggestions from Canadians in all demographics into a report to be delivered to Flaherty in December.
Flaherty said Monday he welcomed the release of the consultation document, entitled "Leveraging Excellence," as a starting point to discuss issues including managing debt, saving and investing, retirement planning and preventing fraud.
"There's a gap in financial literacy in Canada and this is a basic life skill," he said in a telephone interview Monday.
"We'll have Canadians in a better position to understand that they should save for their retirement, that they should understand financing of a new home or a resale home. They'll learn more about balancing the family chequebook."
Flaherty said he is concerned about Canadians' lack of financial literacy, which can contribute to people taking on mortgages they can't handle when interest rates go up and failing to put aside adequate levels of retirement savings.
"As these goals have financial implications, Canadians would benefit by becoming better consumers, investors and savers."
The public consultation phase is expected to be completed in time for the group to deliver a plan to the finance minister in December.
"Canadians face a growing number of complex financial decisions that affect their futures and steer our economy," said Flaherty.
"That's why it is important for Canada to have a national strategy aimed at promoting and strengthening financial literacy."
Tom Hamza, president of Ontario's Investor Education Fund said the consultation document provides clear direction on navigating a "hodge podge" of existing information.
"Half of this is effectively taking stock of what information is out there and who is doing what. To a certain extent, once that is done, I think a strategy will start to make itself more evident," he said.
Hamza said the national strategy should be a catalyst for financial education organizations such as his, which offers financial education programs, to work more closely together.
"Ultimately, hopefully, we'll have a much stronger system of support to help adults learn this topic better."
"We have to take an approach that's actually listening to what users want and need in terms of delivery... I think people are looking for somebody in their corner to simplify difficult decisions and let them know what they should focus on."
Hamza said he believes that helping Canadians learn more about their finances will be beneficial for both average households and the economy as a whole. But he added that the task force needs to ensure it will hear from the very people it's trying to help - average consumers who don't generally pay much attention to financial matters.
"Those are always the hardest people to reach and they're the least likely to give opinions but they're the ones that this is all focused on."
Canadians will have an opportunity to speak about their financial concerns and aspirations, starting in Vancouver and Yellowknife on April 6 and ending in Ottawa May 13. Canadians can also mail, fax and email their ideas and discuss finances online until April 30.