According to Statistics Canada, consumer debt is rising in Canada, going from 181.7% to 184.5% of household disposable income in the first quarter of 2023. This means that, for each dollar of disposable income, Canadians had $1.84 in consumer debt.
As part of Financial Literacy Month, Éducaloi’s radio show Angle Droit recently hosted Julien Michaud, a financial education specialist with l’Autorité des marchés financiers (AMF or Quebec’s securities commission). Mr. Michaud explained that it’s not always easy for people to manage their finances well, especially in the current context of high grocery prices and mortgage rates. It’s therefore essential for people to be well informed and equipped to make the right decisions and to avoid — or at least reduce — their level of debt.
“Financial literacy is a combination of the knowledge, attitudes, and skills required to make sound financial decisions,” he explained.
Take the necessary time
Mr. Michaud explained that there are many ways to become informed about financial matters, citing, in particular, the websites of the Autorité des marches financiers and Éducaloi. “What’s missing, sometimes, is people’s interest and time, especially if they have children and many things to do. But it’s important to find the necessary time”, according to Mr. Michaud.
Of course, it’s important to obtain your information from reliable sources. “You have to verify the credibility of the person. Is what they’re saying too good to be true? If so, you should not rely on them”, he explained.
Mr. Michaud pointed out that people offering financial products and services have legal obligations, first and foremost that of being accredited by the AMF.
“Before either investing, or buying insurance, you should check if the person offering these products or services is authorized to do so. You can call us at the AMF or consult our website,” he explained.
It’s very rare for clients to be defrauded by people who are accredited by the AMF, he explained. “And it’s important to know that, the rare times it happens, there is an indemnity fund which can provide compensation of up to $200,000 when an accredited person commits fraud.”
Other obligations
People and businesses offering financial services and products have other obligations, including that of understanding the profile of their clients. “They have to know you well to advise you well. This is one of their most important obligations”, he explained.
They are legally obliged to put their client’s interests before their own, and must protect their clients’ personal information.
Finally, businesses that offer financial services and products must handle complaints from the public in a proper manner.
“When you have a problem with a representative or a business, you can file a complaint, and they will deal with it,” he explained.
For Youth
Mr. Michaud also discussed financial literacy classes offered to students.
“In Quebec, we have a Secondary 5 class which covers consumer rights, debt, savings, purchasing power, and even taxes. So, it covers a lot of ground. Students enjoy this course and find it very useful,” he noted, adding that the more ways to learn about financial matters, the better.
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Did you know? The AMF offers different tools to help you manage your finances: · Planning a successful retirement Visit their website to learn more. |