Last week the Bank of Canada Governor Mark Carney warned Canadians no less than three times about their skyrocketing personal debt levels. As Canada’s leading credit education and counselling service, Credit Canada applauds Mr. Carney for raising the alarm in no uncertain terms.
Here’s the truth about personal debt levels in this country. The ratio of household debt-to-disposable income reached the highest on record in the third quarter of 2010, at 148.1 per cent, according to Statistics Canada. At this rate, many debt-ridden Canadians will soon stop treading water and start sinking.
Carney is right on the mark when he says that it’s time to wake up to the realities surrounding consumer debt. I believe a big part of that awakening has to do with credit education and financial literacy in general.
For the benefit of ourselves and our children, we must make credit-related educational programming and outreach a priority with initiatives specifically designed to address the issues.
We’re doing our part at Credit Canada through longstanding educational programs and initiatives for the new year that in particular take full advantage of online media. But so much more needs to be done, and can be done, both institutionally and individually.
To these ends, I also praise the federal government, the Finance Minister, and the Prime Minister for support of the Federal Task Force on Financial Literacy, which I joined as a member when it was formed last year. The task force is looking at Canada’s big picture in relation to financial literacy and will soon be coming forward with findings.
At Credit Canada, we foresee a future where government, the private sector, and organizations such as my own pool resources to institutionalize programs for financial literacy at all educational levels of society, with particular emphasis on young people before they enter college and the work force.
It’s blue-sky thinking right now, but it’s a start. We’re already heading in the right direction with joint private-public sector initiatives such as Credit Education Week Canada, which last autumn celebrated its fourth successful year running.
I have faith that we as a nation will tackle the problems we’re facing in areas of consumer debt. Canadians have never been shy about taking on new challenges, though admittedly the challenges sometimes have to reach crisis proportions before we act.
Now is the time. Part, and only part, of the responsibility rests with forces on high. Mostly it rests with informed individuals with the courage to face the facts of their financial lives and act accordingly. In this process, as I say, education is the key.