Financial literacy a skill all Canadians could get better at

In the last decade, Alberta's share of Canada's immigrants has almost doubled reaching nearly 12 per cent of Canada's total. And in Calgary alone there are more than 3,000 refugee claimants. Alberta and the West are increasingly a destination for immigrants.
It is no real surprise that the Canadian West is a becoming a bigger magnet for international immigration.
The relative health of our economy and strength of the job market makes places like B.C., Alberta, and Saskatchewan very attractive destinations. We need immigration, especially skilled workers, to help fuel continued economic growth.
To this end, Citizenship and Immigration Canada has plans for 42,000 to 45,000 people to arrive in Alberta next year through the Provincial Nominee Program.
Most Canadians think immigration is a positive force in our country. A poll released by the Trudeau Foundation earlier this month reveals that Canadians say, by a three-to-one margin, immigration is making the country a better place. The question, then, is how best to prepare and equip new Canadians to flourish in their adopted home.
Among the top challenges facing recent immigrants is money and financial literacy. Indeed, the same Trudeau Foundation poll found that six-in-10 say immigrants should be required to become economically self-sufficient in their first year in Canada.
Money and financial literacy is a big issue for a lot of Canadians, not just newcomers. The debt-todisposable income ratio has risen steadily over the last 20 years reaching 148 per cent in 2010. Momentum, a local organization that provides financial literacy programs for lower-income Calgarians, notes that more than half of Canadians say they need help with financial management skills.
Financial concerns rank even higher among immigrants. The most recent Signposts survey prepared for the City of Calgary and United Way found that while 18 per cent of Calgarians born in Canada are concerned with not having enough money for food, 29 per cent of immigrants are concerned about the same.
Recent immigrants have particular challenges when it comes to money. Earlier this year, the Minister of Finance's Financial Literacy Task Force noted that while recent immigrants are doing better keeping track of finances, they are struggling making ends meet, choosing financial products, planning ahead, and staying informed. New Canadians tend to have strong financial support from family, be resourceful, and are relatively thrifty. Recent immigrants, however, also tend to struggle with language barriers as well as with loans, credit, interest, and budgeting.
This challenge hit home a few weeks ago. A good friend volunteers her time helping a large number of refugees who arrived in Calgary over the last few years. She helps them find jobs and homes, prepare their taxes, visit doctors, figure out schools for their children, as well as deal with winter. She received a call from one of the young men recently. He excitedly told her that he bought a new truck and wanted her to come along to pick it up.
The papers were all signed and finalized; he had purchased a brand-new truck for $56,000. He now faces $800 monthly payments for the next seven years, $400 a month for insurance, and every tank of gas costs more than $100. He makes $17 an hour. This young man was frankly thrilled with his new truck, but he does not seem to understand the financial burden he has assumed.
He ultimately bears responsibility for his decision, but concepts of budgeting, loans and interest are totally unfamiliar to him, his friends, and family. He has little direct or indirect experience with buying a car, along with the options and negotiations usually associated with the process.
When my friend confronted the dealership, the salesman saw nothing wrong with the sale. The car salesman could have just as easily sold a base model or used truck, but instead was more than willing to take advantage of this young man's inexperience.
Canada needs these new Canadians, and we should want them to succeed in their new home. What, then, can be done to help improve financial literacy, especially among recent immigrants?
Minister Jim Flaherty's Task Force on Financial Literacy established a good framework. Edmontonarea MP James Rajotte has continued the effort with a motion in the House of Commons. Their efforts should be encouraged. Likewise, local organizations like Momentum should be supported in their work to encourage financial literacy.
Finally, newcomers to Canada also learn from the behaviour and example of other Canadians. Among us, there had better be more kindly volunteers teaching and modelling Canadian values than there are shady car salesmen.
Nicholas Gafuik lives and works in Calgary. His column appears the last Sunday of each month.


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