Financial Literacy in Canada: Is Our Education System Doing Enough to Keep Canadians Out of Debt?

43% of Canadians say they need help to get out of debt, according to an Ipsos survey. Whether it’s inflation or high interest rates, Canadians are struggling with their monthly budgets and debt payments.

In addition, many don’t understand how to balance the budget, manage a credit card, or fill out income taxes. This raises a pertinent question: Is our education system preparing Canadians to deal with the economic realities of today?

In this article, we’ll explore the state of Canadian financial education and how we can improve the financial literacy in Canada.

What Financial Literacy Means

Financial literacy is the capacity to understand and use financial skills. It’s not just about balancing a chequebook—it’s smart decision-making that impacts long-term monetary health.

That can include a broad range of practical skills, from understanding how interest accumulates to completing income taxes and recognizing the risks of borrowing. It also involves planning ahead—saving for retirement and unexpected expenses—while learning to budget wisely.

Without financial literacy, small mistakes (like carrying too much credit card debt) can have serious repercussions such as insolvency or Bankruptcy.

The Current State of Financial Education in Canada

Over the past years, provinces have made efforts to include financial literacy within schools. Ontario, for example, has mandatory career study and math courses in its curriculum. Other provinces have bookkeeping and accounting electives. Is it enough? Financial topics continue to change, and sometimes practical money management and other core life skills can fall through the cracks.

Today, rising inflation means the cost of food and other everyday essentials continues to climb, making it easier for households to slip into debt. At the same time, higher interest rates increase the share of income needed to cover debt payments. Combined with already high household debt—Canadians now owe over $1.75 in credit market debt for every dollar of income—these factors create growing pressure on financial stability.

Better education could help Canadians adjust to these pressures and build stronger financial futures.

Gaps in the Education System

Investing in the future financial literacy of Canadians could start with a standardized curriculum, ensuring that all high school students receive essential financial education. Many Canadians also only seek guidance after accumulating debt, a problem that could be avoided with early instruction. Even when financial education is offered, it can be limited in scope, leaving students unprepared to manage everyday finances.

How Better Education Could Help Canadians

If every Canadian student graduated with a solid foundation in basic money skills, we believe the long-term benefits could be substantial.

1. Cut Down on High-Interest Credit Card Use: Those with a strong understanding of personal finance may rely less on high-interest credit and avoid mounting debt.
2. Prevent Debt Collection Notices: Early financial education could equip young adults to manage their obligations responsibly, reducing the likelihood of receiving debt collection notices.
3. Lower Insolvency and Bankruptcy Rates: Better money management skills can help individuals avoid severe financial crises, decreasing the number of Bankruptcy filings.
4. Promote Healthier Saving Habits: Learning to budget and plan ahead encourages consistent saving and stronger financial safety nets for the future.
5. Improve Credit Scores: With sound financial habits, Canadians can maintain better credit scores, making loans and other forms of borrowing more affordable.
6. Accessible Help: Similarly, teaching individuals about debt settlement, Consumer Proposals, and Bankruptcy as measures of last resort would de-stigmatize the need for professional assistance.

The Role of Professional Advice

While a benefit, financial literacy is not a guarantee. Life can be unpredictable—job loss, sickness, or an unexpected bill. When debt gets out of hand, seeking professional help is the way to go. In Canada, many professionals can provide guidance and support, from debt advisors and credit counsellors, to the only professionals federally regulated in Canada: Licensed Insolvency Trustees.

Knowing that help exists is one of, if not the most important, aspect of financial literacy. Most Canadians do not know that legal barriers under consumer protection laws exist that can help them get a fresh start.

Canada’s Future: Building a Financially Literate Nation

To truly prepare Canadians for the realities of personal finance, we think education should focus on three key pillars:

• Mandatory: Financial education should be included in all high school curricula.
• Practical: Lessons should focus on real-life skills: budgeting, managing debt, and navigating everyday financial decisions.
• Ongoing: Financial literacy should extend beyond the classroom through community programs and initiatives (e.g. financial literacy month).

The Bottom Line

Canada is becoming increasingly financially savvy, but there’s still a distance to travel. Together, we can reduce family debt, help individuals establish improved credit, and keep more Canadians out of Bankruptcy.

At Adamson & Associates, we believe financial literacy is the path to financial freedom. However, if debt is stressing you out, our Licensed Insolvency Trustees are here to guide you toward a fresh start. They can help you navigate debt settlement, Consumer Proposals, and Bankruptcy, so you can get out of debt and achieve long-term prosperity. Contact us today for a free consultation.