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Bankruptcy in Canada is on the Rise, But Are Party Leaders Taking Notice?

During the final weeks of the federal election, the economy appeared to be a primary focus for major party leaders, with many suggesting that it could, in fact, be the decisive issue for voters. But what about the issue of consumer debt? With the average Canadian now owing $1.65 for every dollar that  they earn and the number of individuals filing for bankruptcy in Canada on the rise, it’s clear that consumer debt should have been a key focus of this election campaign. According to a pre-election poll, Canadians identified debt as one of the top five issues they would like to see discussed by party leaders. On a related note, the rising cost of living was identified as the top issue Canadians wanted party leaders to talk about.

Although several leaders did identify debt as a concern and suggested a few short-term strategies for tackling the problem, including lowering credit card interest rates and offering student loan debt assistance, there didn’t appear to be a solid, long-term plan presented by any party aimed at helping Canadians manage their finances and avoid debt problems.

Although consumer debt is a complex problem requiring a complex, multifaceted solution, improving financial literacy should be an integral element of any long-term strategy.  According to the Financial Consumer Agency of Canada (FCAC), being financially literate means possessing the “knowledge, skills and confidence to make responsible financial decisions” and is a key contributing factor to the prosperity and well-being of Canadians, as well as the well-being of the Canadian economy.

However, when it comes to financial literacy, it seems that most Canadians admitted they could benefit from an improvement in this area. Recent statistics also suggest this is the case, with 29 per cent of Canadians admitting that they have never created a household budget and three in 10 Canadians admitting they increased their debt load this past summer, despite the threat of a technical recession and an uncertain job market.

Recognizing the need to improve the financial knowledge of the average Canadian, the FCAC has created a national campaign aimed at strengthening financial literacy across the country. The program seeks to help Canadians make smart and responsible financial decisions by teaching them about making wise choices as consumers, budgeting, debt reduction strategies and planning ahead for the future. The FCAC needs the support of other organizations, however, as well as the federal government, in order to effectively convey this message and help Canadians improve their financial knowledge and skills.

With the average household debt burden reaching a new record and the number of individuals filing for bankruptcy in Canada on the rise, the issue of consumer debt in this country can no longer be ignored.  It’s time for party leaders to recognize the need to address this issue in a long-term, strategic way, by focusing on financial literacy, supporting and creating programs aimed at providing Canadians with the knowledge and opportunities to become more financially literate.

Now that the election is over, how should the newly-elected members of government address the need for financial literacy? Share your thoughts with BDO Barrie using the hashtags #LetsTalkDebt #BDOdebtrelief

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