Overcoming Financial Vulnerability among Newcomers

This community based research study provides valuable evidence on financial knowledge, vulnerabilities, practices and financial service needs among vulnerable newcomers in Toronto.

Our Research Goals and Methods
The 2009 Canadian Financial Capability Survey (CFCS) was the first time Statistics Canada began collecting routine national level data on financial knowledge (e.g knowledge about interest rates or retirement tools), financial vulnerabilities (e.g debt, ability to cover unexpected emergency costs), and financial practices (e.g keeping a budget, saving for children’s education) among Canadians. Thus, even at the national level, there is limited and only preliminary level evidence on these indicators in Canada. Evidence on financial knowledge, vulnerabilities and practices among recently arrived immigrants and refugees (i.e, newcomers) in Canada is even more limited. Crucially, we know very little about how these indicators intersect with economic determinants like employment and income or with socio-cultural factors like education level, immigration status, race/ethnicity, length of stay in Canada, culture and official language fluency to produce differential outcomes. To help fill this evidence gap, Access Alliance conducted this community based research study in 2014 with recently arrived immigrants and refugees (i.e. newcomers) in Toronto.

We used a mixed-method design consisting of a survey (n=200), in-depth interviews with 8 participants, and a day long focus group discussion with service providers. Our study design, sampling and recruitment strategy for the study was grounded on equity. We worked closely with peer researchers and community organizations to ensure that vulnerable and under-represented  newcomers were included in the study, including newcomers living in rental buildings in low-income neighborhoods, people who came to Canada as refugees, people who currently do not have legal immigration status, and people with limited English language fluency. While the findings from this research are not generalizable to all newcomers in Toronto, our study provides important insights about financial knowledge and service needs specifically for vulnerable groups of newcomers who tend to be under-represented in mainstream research.

Our Project Team Members
This study was conducted by the CBR team at Access Alliance (led by Yogendra Shakya and Axelle Janczur) with support from our Peer Outreach Workers team as peer researchers. Team members include: Megan Spasevksi , Ruth Wilson, Sehr Athar, and Tayyeba Darr. Peer researchers include Monica, Halimo, Waisal, Arezo, and Julie-Anna. Farah Islam conducted advanced statistical analysis and assisted with report writing.
Project advisors and partners include Miryam Zeballos (Financial Coaching and Advocacy Trainer , Neighborhood House), Jeanette Campbell (Senior Manager, United Way’s Product Development unit), Elena Jara (Director of Education at Credit Canada Debt Solutions Inc) and Shankari Belandra (Settlement Counsellor, Access Alliance), and at Catalyst Centre.

What we found
Study results show that vulnerable newcomer groups have limited (self-rated) financial knowledge and face barriers to acquiring this knowledge. Only 13% had taken a financial literacy workshop. They also face systemic barriers to information and tools to build savings and investments, and in managing debt. About half of survey participants said that they had no knowledge (“Not at all”) about RRSP and TFSA. A third of participants indicated that they had no knowledge about RESP. Crucially, the study found that vulnerable newcomer groups are at very high risk for retirement insecurity.

Four fifths of survey participants (84%) reported not currently saving for retirement. Three out of four participants (77%) did not expect to be financially able to retire.

Our study results also provide rich insights on the salient ways financial practices intersect with, and are shaped by gender relations (e.g prevailing gendered assumptions about financial knowledge and capacity) and culture (e.g. cultural beliefs about money, savings, or charging interest). In particular, we found that financial role, capacity and contributions of newcomer women tend to be overlooked at family and societal level. Study results show that cultural beliefs and views about money strongly shape financial practices like taking loans, budgeting, and saving for retirement and children’s education. While majority participants (89%) did their banking primarily in English, almost two thirds (59%) mentioned that they preferred to do banking in their first language.

Moreover, data from our study indicate that the root causes of financial vulnerabilities and service/knowledge gaps that newcomers face are linked to broader structural factors including the disproportionate socio-economic inequities that this group faces in terms of poverty, unemployment, under-employment, precarious employment, wage gap, housing and food insecurity, and social exclusion.

Our Knowledge Translation Goals
Drawing on study findings, we developed Financial Literacy workshop geared specifically at newcomers. We also developed a glossary of financial terms; this glossary is available in multiple languages. You can download workshop content and glossary from this link. We will continue use study results to advocate for sector and policy level changes.

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