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Mortgage Stress in Canada: Why Financial Resilience Matters More Than Rates

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By Keith Martin, Executive Director, Canadian Association of Financial Institutions in Insurance (CAFII)

Financial vulnerability isn’t just about payments — it’s about preparedness, clarity and understanding the insurance protection you actually have.

Mortgage stress isn’t just about rates — It’s about financial resilience

Interest rates dominate headlines for a reason. They affect monthly payments, budgets, and financial planning. But if you’re worried about mortgage stress, there’s a bigger question worth asking: What would happen if your income suddenly changed?

Rates matter. But resilience, your ability to manage an unexpected financial disruption — is often the factor that determines if a household weathers a challenge or faces serious strain.

The real test isn’t your payment. It’s your buffer.

Most conversations about mortgage pressure focus on numbers: interest rates, payment increases, renewal terms.

What often gets overlooked is the cushion behind those numbers.

Many Canadians are managing their finances carefully, but CAFII research shows that unexpected income loss would create difficulty for a large share of households. For some, it would take only a few months for a temporary setback to become a major financial issue.

That doesn’t mean people are irresponsible or unprepared. It reflects a reality many households share: rising costs, complex financial commitments, and limited room for surprises.

Why financial resilience matters more than ever

Financial resilience isn’t about predicting the future. It’s about understanding how prepared you are for it.

Life rarely changes on schedule. Illness, job transitions, caregiving responsibilities, or unexpected expenses can affect income at any time. When that happens, households don’t just rely on their income, they rely on:

  • savings
  • flexibility
  • financial plans
  • and protection they understand

The key word is understand.

What do we mean by “protection”?

In this context, “protection” refers to creditor insurance, which insures credit products, such as mortgage, loans, lines of credit or credit cards and is designed to pay down the outstanding balance if a covered event such as death, disability or critical illness occurs.

Understanding how this type of coverage works, including what events are covered and how benefits are applied, is an important part of financial preparedness. 

The gap most people don’t realize they have

One of the most important findings in CAFII’s research is that many Canadians feel confident in their financial protection but are less certain about the details.

Some people aren’t sure:

  • how much their coverage is for
  • what situations it applies to
  • or how it would support them, or those that depend on them, if something changed

That gap doesn’t necessarily mean people lack protection. It means many haven’t had reason to look closely at it yet.

But when uncertainty rises, as it often does during periods of economic change, clarity becomes essential.

Financial resilience isn’t about income level

It’s easy to assume that financial vulnerability mainly affects households with limited earnings. In reality, financial pressure can affect a wide range of Canadians.

Even higher-income households may face strain if income changes suddenly, especially when they’re managing mortgages, credit obligations, family expenses, and long-term savings goals.

Financial resilience is less about how much you earn and more about how prepared you are for disruption.

What helps people stay financially stable

When researchers look at what makes households more financially resilient, the answer is rarely a single product or decision. It’s usually a combination of factors, including:

  • knowing what financial protections you already have
  • understanding how long they would apply
  • having a plan for unexpected income changes
  • knowing where to find reliable information

In other words, financial resilience often comes from clarity rather than complexity.

A practical way to check your own financial resilience

If mortgage headlines have you thinking about your financial situation, you don’t need to overhaul your finances overnight. A few simple questions can provide valuable perspective:

  • What protections do I already have?
  • How long would they support me or my dependents if my income changed?
  • Would they cover my current financial obligations?
  • Do I know where to get accurate information if I have questions?

These aren’t questions people ask every day. Understanding the answers can make a meaningful difference in how prepared you feel.

Why this conversation matters now

Interest rates rise and fall. Economic conditions shift. Headlines change.

Financial resilience is what helps households navigate those changes.

That’s why conversations about mortgage stress shouldn’t focus only on rates and income. They should also focus on preparedness, on understanding what protections exist, how they work, and how they fit into a broader financial picture.

CAFII is the Canadian Association of Financial Institutions in Insurance. We represent and promote financial institutions in insurance and work to support an open, competitive marketplace that gives consumers expanded choice and access to insurance products and services. 

As Canada’s economic environment continues to evolve, CAFII believes clear consumer education and confidence-building must be central to the conversation.

Because mortgage stress isn’t just about interest rates.
It’s about financial resilience.

Are Canadians Really Protected? Understanding the Confidence Gap Around Insurance

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By Keith Martin, Executive Director, Canadian Association of Financial Institutions in Insurance (CAFII)

Many Canadians believe they have enough protection in place to weather a financial shock. But new national research suggests that confidence may not always match reality.

As part of a new study commissioned by CAFII, Pollara Strategic Insights surveyed more than 3,000 mortgage and HELOC holders to understand how Canadians think about protection and how prepared they actually are. Across every age group, income level, and life stage, one theme emerged: many people feel confident, but most do not know how long their insurance coverage will last.

The Confidence Gap at a Glance

Several findings point to a disconnect between how protected Canadians feel and how protected they are:

  • Only 38% of mortgage holders feel confident they could keep paying their mortgage if the main income earner lost their job.
  • Half could not maintain their lifestyle for six months without income.
  • Many homeowners are unclear about the duration and scope of their creditor protection insurance and whether it keeps pace with their financial responsibilities as borrowing changes.

Even among people who consider themselves financially secure, the study shows that unexpected income loss could cause significant strain.

Why Confidence and Preparedness Don’t Always Match

The research highlights three key reasons many Canadians may feel more protected than they actually are.

  • Emotional confidence often replaces informed understanding – Many people assume their coverage is “enough” without knowing:
    • What type of policy they hold
    • How long the benefits last
    • How coverage interacts with debt, bills, or income replacement

This is particularly true for life insurance. Most homeowners believe they have adequate coverage, yet many don’t know how long that coverage would support their household.

  • Rising costs create new stress points – Even higher-income households face financial pressure:
    • 59% of those earning $120k–$250k worry about ongoing expenses
    • Nearly half would struggle to pay bills after an income loss

A bigger pay cheque doesn’t automatically translate into stronger financial protection.

  • Many rely on assumptions, not conversations. While half of Canadians say they use a financial advisor, only 20% regularly discuss insurance needs. This means gaps often go unnoticed until a crisis forces them to the surface.

Why This Matters

Understanding the confidence gap doesn’t mean that homeowners need more insurance. Instead, it highlights something more important:

Every Canadian deserves a clear picture of what protection they already have — and what risks might remain.

Real confidence comes from:

  • Knowing what your insurance covers
  • Understanding how long creditor insurance benefits would apply to covered loan or credit payments
  • Making informed choices about creditor insurance using current information about credit obligations and coverage, rather than assumptions

A Clearer Path Forward

A few simple questions can help homeowners strengthen their financial resilience:

  • What insurance protection do I currently have, if any?
  • How long would my creditor insurance help cover loan or credit payments if my income changed suddenly?
  • Can the current insurance coverage I have in place cover the financial responsibilities I have today?

At CAFII, we believe that clarity is the foundation of confidence. Clear information about creditor insurance, including how it supports borrowers as credit obligations increase, helps Canadians better understand the role these products play in managing financial risk.

Financial Vulnerability Is Growing: Why Many Homeowners Could be Months From Trouble if They Lost Their Income

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By Keith Martin, Executive Director, Canadian Association of Financial Institutions in Insurance (CAFII)

For many Canadians, owning a home represents stability, security and a step toward long-term financial wellbeing. But new national research shows that behind the scenes, a growing number of homeowners feel anything but secure.

CAFII partnered with Pollara Strategic Insights to survey more than 3,000 Canadians with a mortgage or a home equity line of credit (HELOC). The findings offer an important reality check on how prepared, or unprepared, many Canadian households are for a sudden change in income.

Many Canadians Could Only Manage for a Few Months

One of the clearest signals in the research is just how thin the financial margin is for many homeowners.

Half of those surveyed said they could only maintain their current lifestyle for less than six months if their primary income stopped. Half also said they would have serious problems paying their bills if the main income earner in their household could not work.

The survey suggests that a large number of Canadians are only a few disrupted paycheques away from difficult decisions about mortgage payments, credit card balances, groceries, or childcare.

Debt Levels Add to the Pressure

Homeownership often comes with significant debt, but the study shows just how heavy these obligations are for many families:

  • An average mortgage of about $221,000
  • An average HELOC balance of around $54,000
  • Nearly $40,000 in additional debts such as credit cards, car loans or personal loans

With rising living costs, interest rate fluctuations and economic uncertainty, it’s no surprise that 44% of homeowners say current economic conditions are making their finances worse.

Financial Stress Reaches Far Beyond Lower-Income Households

A key insight from the study is that financial vulnerability isn’t limited to those earning less.

Even homeowners with household incomes between $120,000 and $250,000 report similar pressures:

  • Difficulty saving consistently
  • Managing multiple types of debt
  • Worrying about job loss
  • Unsure how long they could manage without income

Higher income does not always translate into higher financial resilience. Many Canadians, regardless of income, are navigating the same financial uncertainties.

A Gap Between Worry and Preparation

Perhaps the most concerning finding is the disconnect between homeowners’ concerns and their level of preparedness.

Many people fear the impact of a sudden job loss or illness, yet:

  • Only about one-third feel very knowledgeable about planning for the future
  • Many don’t fully understand what their current insurance covers
  • A significant number don’t know how long their life insurance would last if it were needed

This lack of clarity increases stress and can leave families more exposed to risk than they realize.

What Homeowners Can Do

While no one can predict the future, small, practical steps can help Canadians strengthen their financial safety net:

  1. Know your numbers: Take stock of your total debt, monthly payments, income sources and how long savings could support your household if income suddenly changed.
  2. Review your safety net: This includes emergency savings, employer benefits and any insurance you already have, such as life, disability, job loss or others.
  3. Ask clear, simple questions: If you’re unsure what your insurance covers, ask your financial institution or advisor to explain it in plain language, using real scenarios.
  4. Map out a “what if” plan: Thinking ahead about how you would handle a job loss, illness or unexpected expense can help reduce anxiety and clarify where your gaps are.

Moving Toward Greater Financial Confidence

At CAFII, we believe that informed decision-making starts with clear, accessible information. Financial vulnerability isn’t a personal failing, it’s often the result of rising costs, unpredictable economic conditions and the realities of modern life.

By shining a light on these trends, the Pollara study aims to help Canadians better understand their situation, ask the right questions and feel more confident about protecting their households.

Who Needs Protection Most? What the Five Consumer Segments Reveal

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By Keith Martin, Executive Director, Canadian Association of Financial Institutions in Insurance (CAFII)

When Canadian homeowners think about protecting their family’s financial future, many focus on mortgage payments, savings, and day-to-day budgeting. But new national research shows that people approach financial risk very differently. Some feel well-prepared for the unexpected. Others worry about making ends meet if a job loss, illness, or other income-disrupting life event were to occur.

To better understand these differences, CAFII partnered with Pollara Strategic Insights on the first Canadian segmentation study of Credit Protection Insurance (CPI) awareness, attitudes, and behaviours among mortgage and home equity line of credit (HELOC) holders. More than 3,000 Canadians participated.

Why this research matters

While the research identified five distinct population segments, one crucial finding stands out: financial vulnerability can affect anyone, regardless of age, income, or household stability. The study highlights that:

  • Half of mortgage holders could not maintain their current lifestyle for six months without their primary income.
  • Only 38% feel confident they could keep paying their mortgage if the main income earner lost their job.
  • Many homeowners do not feel confident that they fully understand the details of their  Credit Protection Insurance, such as when the coverage begins and ends.

These insights help set the stage for understanding the different groups of homeowners identified in the study and why protection conversations matter.

Five segments that reflect real Canadian experiences

The research identified five broad groups that capture the different financial realities and confidence levels among Canadian homeowners. These aren’t labels for individuals, but snapshots that help illustrate how differently people prepare for the unexpected.

Understanding which segment feels most familiar can help you think about your own financial resilience and the types of protection that may, or may not, fit your needs.

1. The Confident Planner
This group, representing roughly one-quarter of mortgage and HELOC holders, feels relatively secure. They typically have investments, manage their finances proactively, and think ahead to retirement. Despite their preparedness, many still carry concerns about job security or how long they could sustain their lifestyle if their income changed unexpectedly.

Why this matters: Even financially comfortable households can be exposed to risks they may not have fully considered, particularly around income loss and whether they have the right protections in place. For those without insurance, this may mean considering whether coverage is appropriate; and for those who already have it, assessing whether their existing protection is sufficient if their income were disrupted. 

2. The Anxious Realist
Anxious Realists live with frequent financial stress. They often carry higher levels of debt, feel unsure about their financial knowledge, and worry about managing bills if something went wrong. Many see value in financial protection but struggle with affordability and competing priorities.

Why this matters: This group’s financial stress and limited flexibility mean that even a small disruption could have immediate consequences. Affordability is a major barrier, so understanding which protections are within reach, and which supports they may already qualify for, can help them make informed decisions without adding pressure.

3. The Stretched Investor
Stretched Investors are in their peak earning years, often balancing multiple financial obligations such as mortgages, HELOCs, childcare costs, or secondary properties. Some already hold CPI but feel uncertain about whether it offers good value. Others simply haven’t revisited their coverage in years.

Why this matters: With multiple financial responsibilities, an unexpected income disruption could create real strain. Clear information about what Credit Protection Insurance covers, and how it helps maintain debt payments during a covered event,can help this group assess whether the protection they have, or are considering,meets their needs.

4. The Steady Builder
Steady Builders are financially engaged and focused on long-term stability. Some have CPI, some do not, and many sit somewhere in the middle, neither strongly supportive nor strongly opposed. They are cautious, and their views on insurance often hinge on clarity, trust, and how well they understand the product.

Why this matters: Many Canadians in this group are open to financial protection but want straightforward, jargon-free explanations to help them make informed decisions.

5. The Comfortable Traditionalist
This group is typically older, with more assets, fewer dependents, and greater financial confidence. They may not see CPI as necessary but remain attentive to protecting their retirement plans or maintaining stability later in life.

Why this matters: Even financially secure households can have blind spots, especially around income replacement, long-term planning, and how different types of insurance fit together.

Moving forward

At CAFII, we believe that empowering Canadians starts with straightforward, accessible information. By understanding the different experiences reflected in these five segments, consumers can better navigate their own path toward financial security, whatever that looks like for them.

Summary of Speech by Janet Sinclair, CEO of the Insurance Council of British Columbia, at CAFII’s December BOD Reception Event, hosted by CIBC

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Date: December 4, 2025
Location: CIBC Square – 81 Bay St., Toronto, ON M5J 0E7

On December 4, 2025, CAFII hosted its December Board Reception at the CIBC Tower in downtown Toronto. SVP and Head of TD Insurance Life, Health, and Credit Protection Business, and Chair of CAFII’s Board, Val Gillis, began the reception with a land acknowledgement. She thanked CIBC and then highlighted CAFII’s year-in-review. CAFII conducted its biannual regulatory tour, visiting every province in Canada. These meetings, numerous as they were, all fostered engaging discussions on regulatory initiatives, harmonization, financial literacy, and Artificial Intelligence. V. Gillis spoke about CAFII’s research initiatives, particularly the recently published research study with Pollara on CPI ownership among Canadian homeowners. In 2025, CAFII held six webinars, all of which saw strong attendance. V. Gillis concluded her speech by welcoming the AVP of Creditor Insurance at CIBC, and CIBC’s Board representative with CAFII, Konstance Allain, to make some opening comments.

On behalf of CIBC, K. Allain welcomed attendees. She discussed the bank’s long and notable history, emphasizing the importance of insurance and CIBC’s support for Canadians. K. Allain then spoke about CIBC Square and its enduring history. She also reiterated the significance of CIBC’s relationship with CAFII. She then asked Mark Hardy, Vice President of Insurance at CIBC, to introduce the night’s keynote speaker, Janet Sinclair, CEO of the Insurance Council of BC.

After a brief introduction by M. Hardy, J. Sinclair began her speech. She thanked CIBC and CAFII for the opportunity to talk to industry members about the Insurance Council of BC’s many regulatory initiatives and priorities. So, how does the Insurance Council approach regulatory issues? J. Sinclair explained that the answer can be found in the balance between industry and government, innovation and discipline. This dichotomy is crucial to the Insurance Council’s governance philosophy.

In 2025, the Insurance Council carried out numerous practice and compliance audits to assess whether all requirements were being met and to identify areas where licensees lacked understanding. These audits facilitated additional training and, when necessary, disciplinary action. The Insurance Council then used the results from its audits to create guidance.

J. Sinclair stated that the Insurance Council will keep working with industry to share vital information to promote success. Improving communication channels is very important to the Insurance Council.

In short, the Insurance Council wants to be proactive rather than reactive. It wants to move beyond disciplinary actions to provide supportive options.

As a regulator, the Insurance Council faces a few challenges. The rapid pace of change and the rise of AI require the government to reconsider its definition of effective regulation. The Insurance Council does not want to stifle innovation; however, it must maintain consumer protection. J. Sinclair asked how government can adapt to support industry and consumers without creating gaps in protection. She noted that, when done correctly, leveraging new technologies can help with risk management.

J. Sinclair stated that, as a regulator, there is always work to be done. This year, internal trade barriers have become a growing concern. Inefficiencies in the insurance industry are another issue. The Council is working closely with industry to ensure that government supports rather than hinders competition. Additionally, engaging stakeholders remains a key goal.

Harmonization continues to be a growing topic of interest across Canada. The Insurance Council understands this and is working to develop a clearer understanding of what it entails for the industry. Recently, the Insurance Council concluded a consultation on a set of rules that will be presented to the minister. J. Sinclair stated that when discussing harmonization, its challenges must also be acknowledged. Different jurisdictions have access to varying levels of resources; smaller ones often face greater difficulties in terms of finance and personnel. Supporting smaller entities is crucial to facilitating labour mobility. All of this requires the government to amend legislation to promote greater consistency and harmonization across the country.

The RIA Regime is another area of interest. J. Sinclair mentioned that it has been a work in progress for six years, with the Insurance Council responsible for its development and implementation. Government must determine which businesses and insurance policies are covered under the regime. The regime needs to be comprehensive. While there is no official publication date, the Insurance Council anticipates a one-year implementation timeline. Once finalized and approved, the Council is confident it can roll out the Regime quickly.

In addition to labour mobility and the RIA Regime, the Insurance Council is developing a travel insurance-only license. Consumers want to buy a complete package rather than multiple individual policies; the Council seeks to facilitate providing this to BC residents.

J. Sinclair concluded her speech by noting that the insurance industry is dynamic and constantly evolving. The Insurance Council recognizes this dynamism and wants to honour it.

V. Gillis thanked J. Sinclair, emphasizing the commonality between government and industry.

At this point, the Q&A session began. The first question was asked by CAFII’s Executive Director, Keith Martin, who inquired about how the insurance council might use AI and new technologies. J. Sinclair responded that, although emerging technologies are increasingly incorporated into the workplace, the Insurance Council always relies on humans to verify any AI work. She explained that the regulator employs AI for investigative tasks; when dealing with a document hundreds of pages long, AI can assist with sorting and summarizing relevant information. Drafting extensive reports is another area where AI is beneficial. Finally, it can increase the organization’s capacity to support employees.

An attendee asked about the seemingly prescriptive approach to the drafted RIA Regime and if J. Sinclair could comment on this decision. J. Sinclair explained that the Insurance Council consulted the four other RAI regimes already in place to assess what has been successful and what has been burdensome. It concluded that standardized training must be mandatory and that the regulator must establish those necessary standards. Consistent principles across training are essential to maintain consumer protection.

V. Gillis thanked J. Sinclair. She then pulled names for the holiday draw. The evening resumed with drinks and appetizers.

Summary of CAFII’s Virtual Fireside Chat with Dr. Manon Bombardier, Deputy Commissioner, Research, Policy and Education at the Financial Consumer Agency of Canada (FCAC)

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Date: November 27, 2025

On November 27, 2025, CAFII hosted a webinar titled A CAFII Virtual Fireside Chat with Dr. Manon Bombardier, Deputy Commissioner of Research, Policy, and Education at the Financial Consumer Agency of Canada (FCAC). CAFII’s Executive Director, Keith Martin, began the webinar by thanking all attendees and introducing CAFII’s Research Analyst, Robyn Jenning, who then introduced Dr. Bombardier, the Deputy Commissioner of the Research, Policy, and Education Branch at FCAC. Dr. Bombardier leads the Agency’s efforts to enhance financial consumer protection through evidence-based policy, strategic research, and public education initiatives. Prior to joining FCAC, Dr. Bombardier served as Assistant Deputy Minister for the Pest Management Regulatory Agency at Health Canada, where she oversaw the Agency’s operations and transformation agenda, driving regulatory modernization and data-informed decision-making. She previously led the Agency’s business transformation strategy, enhancing transparency, public trust, and regulatory effectiveness. Dr. Bombardier also held senior leadership roles at Health Canada, including Acting Associate Assistant Deputy Minister in the Health Products and Food Branch, where she played a key role in regulatory oversight during the COVID pandemic. She holds a PhD in Environmental Toxicology and an MBA.

After introducing Dr. Bombardier, R. Jennings extended a special welcome to several VIP guest attendees, including CAFII’s 14 member companies, 14 Associates, allied industry associations such as the Canadian Life and Health Insurance Association (CLHIA), the Travel and Health Insurance Association of Canada (THIA), and representatives from various insurance and financial services regulators and policy-making authorities, including the following:

  • The Insurance Council of BC
  • The British Columbia Financial Services Authority, or BCFSA
  • The BC Ministry of Finance
  • Alberta Insurance Council
  • Government of Alberta
  • The Financial Services Regulatory Authority of Ontario, or FSRA
  • The Financial Consumer Agency of Canada, or FCAC
  • The federal Department of Finance, Government of Canada
  • The OmbudsService for Life and Health Insurance, or OLHI

R. Jennings began the webinar by asking D. Bombardier to explain FCAC’s role in financial literacy and how it collaborates with ecosystem members to promote it. Dr. Bombardier thanked CAFII for the opportunity to speak to stakeholders and then outlined FCAC’s organizational roles and responsibilities. She explained that FCAC is an independent federal regulatory agency. Its mandate is to protect consumers. It achieves this in two ways: by supervising federally regulated financial institutions to ensure compliance with consumer protection laws and by enhancing Canadians’ financial literacy and well-being. FCAC does this by partnering with various stakeholder organizations to provide reliable, impartial information and resources to Canadians. FCAC also conducts regular research to better understand the challenges Canadians face.

FCAC believes that an informed consumer is a better-protected consumer. When Canadians understand their financial products, they feel more confident in their decision-making. FCAC’s goal is to build a system that gives Canadians the knowledge, confidence, and tools to make sound, informed financial decisions.

FCAC oversees the development and implementation of the National Financial Literacy Strategy, which establishes a shared vision for improving economic outcomes and resilience among Canadians. The National Strategy is currently under review as it is up for renewal in 2026. Collaboration remains a vital element for the strategy’s success. Since FCAC launched the current strategy, it has connected with hundreds of organizations across the country, including industry, non-profit, community groups, and academic institutions.

FCAC is heavily focused on research and collaboration. In 2022, FCAC launched a measurement plan to track collective impact. Organizations can adopt and integrate the plan into their own frameworks to collect data, which is then shared with partners. FCAC also created the Research and Data Exchange, or RDX, which is available online. The RDX is a centralized hub where every partner on the strategy can access and share research and data. FCAC recently published four data stories on its survey findings, including those on preparing for early retirement, fraud, financial advice, and saving for post-secondary education.

R. Jennings then asked Dr. Bombardier to discuss the roles of provincial and federal partners in increasing financial literacy and their interaction. Dr. Bombardier explained that financial literacy is a shared responsibility. The federal government, through the FCAC, sets a national vision in consultation with industry organizations and stakeholders. The provinces and territories have a crucial role in this. FCAC’s National Strategy aims to provide a common framework for everyone. It enables accurate data collection to ensure consistency and, ideally, to create a greater impact across Canada. The provinces and territories are essential in implementing the national approach, and some, like Quebec, have their own literacy strategies. Provinces, such as Ontario, have also integrated financial literacy into school curricula. In summary, the collaboration between federal and provincial governments is truly cooperative and complementary; the success of the National Strategy depends on this.

Before continuing the conversation, R. Jennings congratulated FCAC on the 15th anniversary of Financial Literacy Month this November. She then asked if Dr. Bombardier could provide some background on the campaign and how it aligns with the FCAC’s mandate. Every November, FCAC brings together organizations across Canada to help Canadians build financial resilience and literacy. The theme for this year is “Talk Money.” The campaign focuses on action and normalizing financial conversations. It reflects one of the FCAC’s core principles: that financial literacy is a shared responsibility. Everyone has a role to play. Dr. Bombardier explained that more than half of Canadians have said that they are struggling to keep up with their financial commitments. When money feels stressful, people tend to remain silent; this can worsen the issue. Research has found that openly talking about money boosts confidence and leads to better financial outcomes. FCAC conducted a study with young Canadian women that found sharing their experiences reduced stress and fostered positive financial habits, such as saving and paying down debt. This month, FCAC wants to challenge Canadians to start the conversation.

An additional focus for FCAC this month was youth, specifically young adults ages 15 to 30. People make significant financial decisions during these years, often with limited knowledge and support. FCAC aims to meet Canadians where they are, including younger generations who are beginning to make important financial choices. Additionally, FCAC’s research has shown that younger generations often turn to family members, friends, and social media for financial advice. As social media and AI-generated content increase, so do the risks. FCAC is working with partners to ensure consumers receive accurate information.

R. Jennings asked Dr. Bombardier if she could discuss some of the initiatives that FCAC is currently developing in financial literacy across Canada, especially as they relate to vulnerable groups such as young people, lower-income Canadians, or newcomers. Financial literacy is not a one-size-fits-all approach. FCAC aims to develop initiatives that meet vulnerable groups where they are, addressing their specific challenges and circumstances. It does this by using behavioural science to better understand the factors that influence financial confidence and positive habits. One example is FCAC’s research study with Carleton University on girls and young women aged 16 to 25. The study found that women often have financial knowledge comparable to men, but they report lower confidence. This gap matters: lower confidence will affect how you make decisions and which opportunities you pursue. During the research partnership with Carleton University, FCAC tested online activities which encouraged participants to challenge stereotypes, share personal stories, and define financial concepts in their own words. At first, women underestimated the accuracy of their responses to the financial literacy questions by 24%. In other words, women had much higher financial knowledge than they thought they did. Through their participation in the online activities, however, the women’s confidence increased. Additionally, financial worries decreased, particularly among those from lower-income backgrounds, while positive behaviours, such as saving and repaying debts, increased across all groups. This highlights that creating spaces where women can talk openly about money will boost confidence and foster positive financial habits.

Next, Dr. Bombardier discussed the other research projects currently underway at FCAC. She clarified that research is essential to fulfilling FCAC’s mandate. By understanding the challenges Canadians face, FCAC can better determine how best to assist. One area of particular interest is consumer debt and indebtedness. It is a growing concern. FCAC has a monthly well-being monitor on its website that currently shows that 1/3 of Canadians are borrowing money to cover their daily expenses, and 40% say that their debt has increased month by month. These are clear signs of vulnerability. Another area of interest is credit cards, which are a significant point of financial stress for many. FCAC partnered with Queens University and Rochester University to determine whether a minor, behaviorally-informed digital intervention, such as an alert, prompts people to pay down their debts faster. Using the Optimity Healthy Lifestyle app, FCAC sent an electronic “nudge” to 25,000 participants about their debts. The results found that those with credit card debt reduced their balances by 25% more than the control group after receiving the alert. The results have not yet been published but will be available soon.

Financial literacy and fraud are two topics of significant focus for FCAC, Dr. Bombardier explained. The goal, however, remains the same: to use the available evidence to create practical, relevant, and timely tools to help Canadians. FCAC does this through partnerships across industry.

R. Jennings asked whether Dr. Bombardier could speak further about specific themes related to particular groups of Canadians and their financial literacy gaps. Debt and fraud are recurring themes that FCAC sees. Scams have increased significantly in recent years. R. Jennings asked if FCAC’s research has found that certain groups are particularly vulnerable to fraud. She mentioned FCAC’s finding that women tend to lack confidence in their financial knowledge, regardless of how accurate it actually is. Dr. Bombardier explained that FCAC is currently looking into this, though it has been an area of interest since 2019.

How does the FCAC measure impact and track its progress? Dr. Bombardier emphasized that measuring and monitoring efforts are essential. It’s not enough to run interventions; we must determine if these efforts are producing positive results. If not, FCAC needs to adjust its approach. Dr. Bombardier added that this is done in a few ways. The National Strategy Measurement Plan, the first of its kind in Canada, helps organizations across the ecosystem consistently measure outcomes and share data, enabling us to measure collective success. FCAC also conducts national surveys and then publishes the data on its website, including the financial well-being survey, which is fielded monthly. Another measurement tool is the Financial Resilience Index, or FRI, which is currently in testing. FCAC is developing a baseline for the FRI to measure longer-term impacts. The FRI intends to provide additional insight into how Canadians access resources and apply their skills and knowledge when making financial decisions. During difficult or particularly expensive financial times, how are Canadians managing their expenses and the daily cost of living? This tool will be released soon.

A key goal of the National Strategy is to reduce barriers and foster a more inclusive country. Despite high financial inclusion rates in Canada—most Canadians already have access to bank accounts and digital payment systems—R. Jennings inquired about what additional steps are necessary. Dr. Bombardier responded that, although Canada performs well globally on inclusion and financial literacy, there is still room for improvement. Approximately 98% of Canadians have a bank account, whether physical or digital, thanks to a strong legislative framework that guarantees the right of all Canadians to one. Access is only the beginning; having suitable products, understanding them, and comparing options are essential. Dr. Bombardier also mentioned legislation introduced in 2022 that requires banks to consider customers’ circumstances before offering and selling products and services, thereby reducing the risk of inappropriate or unnecessary consumer purchases.

Another example of inclusivity, FCAC has reached an agreement with the financial sector and a number of financial institutions to modernize their commitment to provide low-cost or no-cost accounts for consumers. This was done to ensure that all Canadians have access to modern, basic banking services, with targeted groups benefiting from the no-cost accounts. This has an implementation date of December 1st, 2025.

R. Jennings asked if FCAC knew who comprised the 2% outlier group or what still prevents 2% of Canadians from accessing a bank account. FCAC did not have a specific answer to this question, though Dr. Bombardier speculated that it would likely comprise rural communities with limited internet access or people who did not want to open an account.

How does Canada rank globally in financial literacy? In short, Dr. Bombardier mentioned that Canada performs quite well. The OECD regularly conducts surveys on financial literacy among adults and young people, which have shown that Canada ranks highly internationally. That being said, Canada should not become complacent; there is always room for improvement. Plus, averages hide gaps; youth and indigenous communities tend to be more financially vulnerable, thus scoring lower. These gaps matter because they translate into real-life challenges. Canada leads globally in its national, ongoing commitment to improvement. National commitment does not mean merely engaging the ecosystem broadly; it means continuing to build upon Canada’s already strong foundation with coordinated,  targeted action.  

FCAC works with international partners to identify opportunities to share best practices and learn from one another. R. Jennings asked Dr. Bombardier if there were any international jurisdictions with which FCAC works. She replied that each jurisdiction has its own particularities, which is something to consider. Dr. Bombardier mentioned the Nordic countries, which score highly on financial literacy. They utilize multi-year action plans that they actively monitor and adjust. Agility is important. Estonia is a country making strides for financial literacy; the government uses “finfluencers” to share trusted financial information with the public. These “finfluencers” become a network. Canada’s financial resilience index is considered cutting-edge globally. Furthermore, the fact that Canada is on its third iteration of its national strategy, while some countries are just starting to develop a plan, speaks to Canada’s leadership role.

While it’s positive that Canada participates in international discussions on financial literacy, it is essential that these conversations also occur locally among Canadians. R. Jennings asked Dr. Bombardier if she finds it more challenging to communicate the importance of financial literacy to Canadians, considering the increased stress and the flood of information they face. What are the main challenges in improving financial literacy levels? Dr. Bombardier explained that Canadians are overwhelmed with information, some of which is incorrect or malicious. She mentioned that engaging Canadians on this topic has been challenging, especially given the growing financial stress. The data shows this: 40% of Canadians have seen their debt increase. These factors hinder long-term financial focus. Therefore, FCAC’s biggest challenge is to cut through the noise and deliver clear, practical, accurate, and relevant guidance. People don’t want theoretical solutions; they want concise answers for their concerns. Other factors limit conversation, such as language barriers, limited digital access, and cultural barriers. Even when people know what to do, action can be difficult, especially when stressed. FCAC aims to provide Canadians with information in a timely and accessible manner. It is about empowering people.

R. Jennings then asked whether Dr. Bombardier could speak generally about strategies she would recommend to someone aiming to stay on top of their finances and improve their financial outcomes. It is best to start with the fundamentals: budgeting, saving, and paying down debt. Budgets don’t need to be complicated; Canadians can start with just a piece of paper. Budgets help assess spending habits, track earnings, and determine how much can be saved. FCAC’s research found that 70% of people who budget, even at a basic level, meet their financial commitments, compared to those who do not budget at all. There is a psychological barrier to budgeting; some people feel overwhelmed or intimidated by the idea of regularly monitoring their finances. When it comes to saving, Dr. Bombardier recommended starting small and early. Saving early builds financial resilience and can reduce stress later if a crisis occurs. It’s important to talk about money and share experiences with family and friends. Discussing paying down or off debt, saving for a vacation, or reducing spending habits are excellent and motivating conversations to have with those around you. Lastly, if you are facing financial challenges, remember that you are not alone. From financial advisors to credit counselling to your community’s emotional support, many options are available to help Canadians in need. Plus, Canadians have the right to shop around and compare products and services to find what is best for them.

On the positive side, does Dr. Bombardier see opportunities for new technologies, such as AI, to assist with financial literacy? She responded that innovation often breeds skepticism and hesitancy. AI has tremendous potential, especially in financial literacy. What industry and government must do is protect consumers so that these innovations do not cause more harm than good. Detection, protection, and mitigation are key.

FCAC recently hosted a workshop with various organizations on AI and consumer protection. It examined ways to foster innovation while maintaining adequate safeguards. AI tools can be very effective in interactive learning and real-time support, which helps build confidence. However, there are downsides: privacy concerns, data security, misinformation, and algorithmic bias. Despite its potential benefits, regulators must ensure that new technologies do not widen the digital divide for those with limited digital literacy. FCAC is collaborating with its partners to assess the risks and opportunities associated with AI to ensure consumer protection.

An anonymous attendee asked whether FCAC deliberately chose not to hold a kickoff event at the start of November to mark financial literacy month, and whether this will happen in 2026. Dr. Bombardier replied that she was uncertain whether a commencement event would take place in 2026, though she will speak with her FCAC colleagues.

As the webinar wrapped up, R. Jennings asked Dr. Bombardier if she had anything else to add or discuss. She thanked CAFII for the opportunity to speak on such an important topic. She compared financial literacy to driving a car on a busy digital highway; you don’t need to understand how the engine works, but you do need to know the rules of the road and use a GPS to navigate traffic. Therefore, knowledge is essential; without it, accidents can happen. If you lack financial literacy, you may be unprepared for a financial mishap. Along with knowledge, we need systems that protect us. Building the GPS and guardrails for driving is like the ones required for financial literacy and financial well-being. It’s also something that cannot be done alone; provincial and federal governments must work together with industry to serve Canadians.

R. Jennings thanked Dr. Bombardier and asked K. Martin to conclude the webinar. He joined the discussion and asked whether FCAC’s research with international jurisdictions is publicly available. Dr. Bombardier explained that FCAC aims to create a space for academic institutions, regulators, and provincial governments to share research and information. She emphasized that sharing and collaboration are essential to prevent duplicate efforts.

K. Martin then asked whether Canadian universities are doing any work to understand financial literacy gaps. Dr. Bombardier explained that FCAC published papers from four students on financial emergencies. FCAC regularly conducts student competitions in partnership with other government departments. She noted that this is probably not happening as much as it should, so further work is needed.

K. Martin thanked Dr. Bombardier for her time and concluded the webinar.