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November is Financial Empowerment Month

29.11.2021

This year, instead of Financial Literacy Month, we’re celebrating Financial Empowerment Month. Here’s why…

By Miranda Saroli, Knowledge Mobilization & Social Action Coordinator, Access Alliance

Financial Literacy Month has been celebrated for over a decade in Canada. This special awareness month, organized by the Financial Consumer Agency of Canada (FCAC) of the Government of Canada, seeks to strengthen the financial literacy of all Canadians¹. This year, the focus is on the renewed National Financial Literacy Strategy, which calls for changes to the Canadian financial system to ensure it is accessible, inclusive, and effective for all Canadians². This appears to be a fairly progressive initiative, so why did Access Alliance, a newcomer-serving agency, decide to take it one step further and celebrate Financial Empowerment month instead?

First, a bit more about Financial Literacy Month

In November, financial institutions and social service organizations across the country are encouraged to organize knowledge-sharing events and share resources focusing on money and debt management, saving for the future, and financial rights and responsibilities¹.

Having the skills, knowledge, confidence, and tools to make informed financial decisions are essential for anyone living in Canada. The recommendations of the Government’s National Financial Literacy Strategy are steps in the right direction; however, we recognize that financial literacy alone does not guarantee financial security.

Exploring the Root Causes of Financial Vulnerability

A research project completed by Access Alliance in 2018, engaging newcomers and service providers, revealed several unique barriers that newcomers and refugees face in accessing financial information and tools. For example, participants reported services and workshops were not available in their preferred language, or were not culturally sensitive or easily accessible. Cultural beliefs and views about money strongly shape financial practices like taking loans, budgeting, donating to charity, and saving for retirement and children’s education. Data from the study pointed to the root causes of financial vulnerabilities and recognized that service and knowledge barriers facing newcomers are often linked to system factors such as:

• poverty
• unemployment, under-employment, or precarious employment
• unaffordable housing and income insecurity, and
• social exclusion.

The study also found that newcomers with precarious immigration status (refugee claimants, temporary work permits or visas, non-status) experienced these financial vulnerabilities and financial service barriers three to four times more often than newcomer groups who were permanent residents or citizens. This is concerning because, since the study was conducted, rates of poverty within Canada are still extremely high, with about 1 in 7 people in Canada living in poverty³, and residents in urban centres such as Toronto facing a housing crisis⁴. Therefore, we know that newcomers, particularly those with precarious status, are feeling the impacts of income insecurity even more deeply.

In addition, problematic government policies, like the Immigration Transportation Loan scheme that requires sponsored refugees to pay back their transportation and medical costs to come to Canada, still exist and further exacerbate financial vulnerabilities facing newcomer families.

In other words, no matter how much knowledge or information one has about managing your savings and debts, it will make little difference to your financial security if you are unemployed, cannot afford housing, and are struggling to pay back the debt to the government!