Do new Canadians really understand our financial system?

GoEasy's Canadian Financial Literacy Trends survey reveals key insights into the challenges newcomers to Canada face in understanding the financial system.

The survey found that almost six out ten (59 percent) of respondents “very strongly agree” or “somewhat agree” that they had a good understanding of Canada's financial system when they arrived. This suggests a relatively high confidence level among newcomers regarding their initial understanding.

Generational differences were evident in the survey results. Gen Z (60 percent) and Gen X (79 percent) had a better understanding of financial systems and tools compared to Millennials (55 percent) and Baby Boomers (22 percent).

This suggests greater awareness and understanding among younger generations.

According to the survey, male newcomers reported higher levels of understanding the Canadian financial system than female newcomers.

Among men, 23 percent “strongly agreed” and 45 percent “somewhat agreed” that they understood the system, while only 16 percent of women “strongly agreed” and 34 percent “somewhat agreed.”

Higher education and income levels correlated with better understanding. 40 percent of respondents with higher education and 44 percent with higher income levels agreed that they had a good understanding of the financial system.

Respondents who identified as visible minorities reported additional challenges in understanding Canada’s financial system. Only 8 percent “strongly agreed” to have a good understanding compared to 28 percent of non-visible minorities.

Language barriers, cultural differences, and limited access to financial resources may contribute to these challenges.

The survey highlighted several challenges newcomers face when navigating Canada's financial system:

• Fear of making financial mistakes: more than half (58 percent) of newcomers feared making mistakes, with higher concern among females (64 percent) compared to males (53 percent).
• Understanding financial jargon: 46 percent reported difficulty understanding financial language, especially Gen X (50 percent) and Millennials (46 percent).
• Finding reliable information: 52 percent struggled to locate reliable or accurate information, with concerns more prevalent in Nova Scotia (67 percent) and Alberta (60 percent).

Newcomers rely on various sources for financial guidance:

• Friends and family: 61 percent relied on personal networks for advice, especially among Gen Z, Millennials, and Gen X.
• Online written resources: 53 percent used government and financial institution websites.
• Social media: About 29 percent, especially older demographics like Generation X, used social media groups to access information.

The survey also revealed areas where newcomers seek better understanding:

• Credit building: 48 percent wanted to know more about building credit.
• Taxes: 54 percent sought guidance on how to file taxes properly.
• Saving strategies: 51 percent wanted advice on growing their savings.
• Home purchasing: 42 percent were interested in learning about the process of buying a home and securing a mortgage.

These findings highlight the need for targeted financial education programs. Collaboration between government agencies, financial institutions, and community organizations can help newcomers navigate the country’s financial system, promote economic integration, and improve their financial well-being.