Canadians and Their Money

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Figure 11: Participation in RRSPs1009080Eligible RRSP room (%)7060504030201006%in 2007Source: Statistics Canada. (2008). “Registered Retirement Savings Plan Contributions.” The Daily. November 5.and eligibility criteria, alongside initiatives to promote program awareness and literacyamong targeted groups. 30 The Organisation for Economic Co-operation andDevelopment has identified similar policy principles to increase take-up rates.Research also demonstrates that participation is greater in programs that have noapplication form or are as automatic as possible, such as the age credit in the incometax system. As a positive side effect of increasing program take-up rates, Canadiansmay become engaged and confident in learning about other government programsfor which they may be eligible.Recommendation 16The Task Force recommends that the federal, provincial and territorial governments helpCanadians maximize the financial benefit from government programs for which they areeligible by:a) Ensuring simplicity and clarity in the way programs are written and structured;b) Simplifying application processes; andc) Intensifying outreach initiatives to improve Canadians’ awareness of theseprograms and their eligibility criteria.30 Ibid.56TASK FORCE ON FINANCIAL LITERACY – III. Lifelong Learning
Programs for SavingIn our deliberations, many participants expressed concern that some groups ofCanadians are not saving, or not saving enough, thus pointing to Canada’s low (byhistorical standards) personal saving rate. The problem was attributed to a numberof factors, including:• A culture that tends to encourage consumption and immediate gratification;• A lack of awareness or understanding of government-supported saving vehicles,such as Registered Education Savings Plans (RESPs), Canada Education SavingsGrants, Canada Learning Bonds and Registered Disability Savings Plan grants;• Concern that many Canadians lack the financial means to save; and• Behavioural biases: young people, for instance,“In these ever-increasing complex financial decisions, wehave a tendency to discount the future.must make it easier for consumers to make wise financialchoices. One of the recommendations we talk about inSaving is a basic but essential financial activity, our submission is about changing the architecture ofchoice, designing choices so that Canadians, with respectranging from setting aside money for smallto retirement savings, are nudged towards makingpurchases to saving for retirement, and can be choices that could be in their better financial interest.”done at virtually any time. With people taking on – Canadian Foundation for Advancement of Investor Rightsgreater responsibility for funding their retirementtoday, the value of saving and building a “nest egg” for the future cannot beunderestimated. Moreover, significant improvements in life expectancy make itdifficult for Canadians to accurately predict the length of their retirement. Thisrequires a plan that contemplates lifestyle, resources, unforeseen events and otherfactors within a time frame that can last anywhere from several years to severaldecades. Our recommendations contemplate not only saving, but also the value ofbuilding a better understanding of options available to Canadians to manage therisks of outliving their assets (e.g., guaranteed income stream through retirement).In other sections of this report we discuss ways to help Canadians become bettersavers. Instruction delivered in school, beginning at a young age, on basic budgetingtechniques and the difference between “needs” and “wants” is a natural startingpoint. The creation of a public awareness campaign focused on the importance ofTASK FORCE ON FINANCIAL LITERACY – III. Lifelong Learning 57
Page 1 and 2:
Report of Recommendations on Financ
Page 3 and 4:
Table of ContentsAcknowledgements..
Page 5 and 6:
AcknowledgementsContributions of ma
Page 7 and 8:
www.financialliteracyincanada.comTh
Page 9 and 10: touches all residents, our recommen
Page 11 and 12: 3. Lifelong LearningWe believe that
Page 13 and 14: ensure, at the highest level, accou
Page 15 and 16: • Navigate the ever-changing fina
Page 17 and 18: Figure 1: National Average Scores,
Page 19 and 20: Figure 3: Ratio of Household Debt t
Page 21 and 22: Figure 4: Key Results from the 2003
Page 23 and 24: Figure 6: National Strategy on Fina
Page 25 and 26: GovernmentsGovernments are uniquely
Page 27 and 28: play a crucial role in providing fi
Page 29 and 30: Figure 7: Shared Responsibility - M
Page 31 and 32: term. Further, the mandate should n
Page 33 and 34: • Enable stakeholders to be activ
Page 35 and 36: Figure 9: Life EventsReceivingunexp
Page 37 and 38: Figure 10: Essential Skills - Money
Page 39 and 40: We commend those authorities who ar
Page 41 and 42: Governments may consider leveraging
Page 43 and 44: considering the purchase of a finan
Page 45 and 46: “lunch and learn” seminars and
Page 47 and 48: The Role of Professional AdviceThe
Page 49 and 50: In some cases, programs reach many
Page 51 and 52: Student Loans Directorate at the De
Page 53 and 54: The UAS is also “designed to incr
Page 55 and 56: Throughout the public consultation
Page 57 and 58: since 1982. His report, entitled
Page 59: Take-up of Government BenefitsEarli
Page 63 and 64: programs. We encourage, as a supple
Page 65 and 66: When it comes to online learning, h
Page 67 and 68: Public Awareness CampaignCreative a
Page 69 and 70: Fraud Prevention and EducationWe pr
Page 71 and 72: Self-Assessment ToolStudies and sur
Page 73 and 74: contests could also be used to fost
Page 75 and 76: ear a responsibility to communicate
Page 77 and 78: The federal, provincial and territo
Page 79 and 80: 4.5.Planning ahead (thinking about
Page 81 and 82: students have acquired some of the
Page 83 and 84: and offer funding and professional
Page 85 and 86: To that end, the Government should
Page 87 and 88: Important research gaps remain, how
Page 89 and 90: Conclusion: The Way ForwardSuccess
Page 91 and 92: AppendicesAppendix A: Summary of Re
Page 93 and 94: 19. The Task Force recommends that
Page 95 and 96: Appendix B: Members of the Task For
Page 97 and 98: 2520151050Most Canadians are making
Page 99 and 100: 2520151050Few Canadians keep themse
Page 101 and 102: Appendix E: Selected BibliographyTh
Page 103 and 104: Ipsos Reid. (2009). CSA Investor In
Page 105 and 106: Standing Senate Committee on Bankin
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Canadians and Their Money

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