At last, Canada appoints financial literacy leader

New position aims to empower consumers to manage money, cut confusion over services

Jane Rooney, Canada’s new financial literacy leader, was supposed to unveil a new series of educational videos on money management for young people in Toronto April 15.

Instead, she stayed in Ottawa to appear with Kevin Sorenson, minister of state for finance, as he named her to a job that has been talked about for more than three years. The new financial literacy leader comes from — and will report to — the Financial Consumer Agency of Canada (FCAC).

This is an independent body set up in 2001by the federal government to strengthen oversight of consumer issues and expand consumer education in the financial sector.

Rooney joined the FCAC in 2002, soon after its creation. She’s been director of financial literacy and consumer education since 2008.

I know her as someone who is passionate and keen to spread the message through all kinds of delivery channels — whether in printed publications, online guides, videos, social media and interactive tools.

“She will hit the ground running,” says Lucie Tedesco, commissioner of the Financial Consumer Agency of Canada, who looks forward to working with her in this expanded role. So, what is financial literacy? Jim Flaherty, the late federal finance minister, was an advocate. He wanted to see Canadians more engaged with managing their money, instead of ignoring it or handing off the job to others. In 2009, he appointed a financial literacy task force, which came up with a definition I love to quote: “Financial literacy is having the knowledge, skills and confidence to make responsible financial decisions.”

Financially literate people will try to cut the confusion of conflicting claims and buy products and services suited to their needs.

Financially literate people will plan ahead for major life events, such as education, marriage, childbirth, home ownership, retirement and old age.

Financially literate people will bring critical judgment to the information and advice they get from friends, relatives, professionals and the media. In its report in February 2011, the task force made 33 recommendations. Chief among them was finding a person with great connections to champion the cause. In March 2013, the Financial Literacy Leader Act received royal assent. And in November 2013, Sorenson announced at a Financial Literacy Month event that the leader would be named imminently. I’m relieved the long wait is over. With a high level of household debt and low level of retirement savings in Canada, it’s time for Flaherty’s strategy to come together. The task force was loaded with executives, including chair Donald Stewart from Sun Life and co-chair Jacques Menard from BMO. I’m happy to see a leader who is independent of the financial services industry. Large financial institutions are good at providing information to customers. But as sellers of products and services, their disclosure is often inadequate and slanted in favour of their own interests. The new leader’s focus must be on changing the behaviour of Canadians, said Tom Hamza, president of the Investor Education Fund, an organization set up by the Ontario Securities Commission to sponsor research on Canadians’ personal finance and investing habits. Part of this effort will require consumers “to be more questioning of financial products offered to them,” Hamza added. “We need to focus on reaching people with these messag- es in a way that the government has not reached them before.”

Large companies already dominate the airwaves, disseminating messages that suit their purposes. Let’s use public funds to give Canadians the ability to look behind the attractive ads and find their true meaning. Disclosure: I was the last-minute stand-in for Rooney at the Toronto event, since I helped create the Financial Basics workshop on which they are based, along with the FCAC and Ryerson University’s Chang School.

I also hosted the English-language videos, found at the FCAC website and its YouTube channel. Ellen Roseman writes about personal finance and consumer issues. You can reach her at eroseman@thestar.ca or ellenroseman.com