A non-profit organization that helps low-income Canadians achieve self-sufficiency is applauding the federal budget’s plan to boost financial literacy among Canadians.

Toronto-based Social and Enterprise Development Innovations, or SEDI, which focuses on financial literacy, asset-building and entrepreneurship, called upon the federal government to develop a national strategy for financial literacy in September 2008.

While the federal government’s plan to improve financial literacy was a low-profile feature of the 2009 budget, SEDI called it a critically important component of any long-term economic recovery plan for Canada.

“To create a national strategy, we need leadership, people, ideas, and a mechanism,” said Peter Nares, executive director of SEDI. “We applaud the Canadian government for its leadership on this issue.”

According to the organization, financial literacy is an issue that matters to all consumers of financial services, including lower-income Canadians.

Throughout the financial crisis, the role and impact of low financial literacy levels among Canadians has been overshadowed by access to credit and other large financial concerns, according to SEDI. It says the inability of many consumers to make informed financial decisions is a contributing factor to rising personal debt and personal bankruptcies, increased use of fringe financial services and lower savings for longer term goals such as post secondary education, retirement, homeownership and starting small businesses.

The creation of a national strategy for financial literacy will equip Canadians with the tools and the continuing supports they need to better manage their income, savings, and investments, SEDI says.

In November 2008, SEDI launched the Canadian Centre for Financial Literacy, which involves partnerships with businesses, governments and communities across Canada, aiming to increase the financial literacy of over 230,000 low income Canadians by 2013.

The group adds that the national financial literacy initiative is similar to those adopted in the United Kingdom, the United States, Australia and New Zealand.

IE