Canadians need help when it comes to finances.

Recently reported numbers from Credit monitoring firm TransUnion has found that Canadians’ consumer debt load at the end of 2012 surpassed $27,000 (not including mortgage debt), a 6% increase over 2011. With numbers like this, it’s no surprise that only half (49%) of Canadian workers ages 40 to 65 describe their personal financial situation as positive as they approach retirement, as per an online employee survey conducted by Pollara.

Take those stats and combine them with findings from a recent CIBC-sponsored poll, which found that 17% of Canadians indicated debt reduction as their No. 1 priority for 2013, and the math doesn’t work out, especially if interest rates go up. “People are simply going to borrow more money to get out of debt,” said Elena Jara with Credit Canada Debt Solutions, speaking last week at the CPBI’s panel on retirement.

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Debt stress, she added, can lead to mental and physical illness in your employees.

“There have been reports of people actually suffering strokes and heart attacks due to the long-term stresses caused by money worries,” she said.

The other panellists shared their thoughts on how why it’s important to keep that stress to a minimum.

Derek Dobson, CEO of the CAAT Pension Plan (read more about CAAT’s strategy in Dynamic Dual), says the plan is looking to improve its FLIQ—financial literacy intelligence quotient. CAAT wants financially literate members and looks to have 10% of its members to be ambassadors for the plan. “We rely on the ‘water-cooler chat,’” he said.

Improving financial literacy among employees helps employers, simply because the more literate their staff is, the more engaged and less stressed they are, explained Dobson.

As a whole, he continued, Canada can benefit from a financially literate population. “Financial literacy doesn’t mean being able to run a pension plan; it’s having enough basic financial knowledge to have a conversation.”

“It’s someone who understands the fundamentals, budgets, the basics of investment,” added Jara, “so they can make smart decisions.”

Making smart decisions is key, agreed Penny Shore of Shore Publishing. “With reduced pension and savings, rising personal debt load and a slow economy, people are now concerned they might outlive their wealth,” she said. “It’s all about education.”

But should employers be responsible for that education?

“There’s a cost to employers for not doing it,” said Carmine Domanico of Cristal International, citing an example of an employee who sued his company for not providing enough for his retirement.

Then there’s productivity.

“Other than the altruistic reason [for helping employees become financially literate], productivity is a strong one,” said Dobson.

“Individuals are stressed when they’re not financially well; they’re worried about getting their next paycheque—and that can affect the workplace,” Domanico added.

And debt? Who’s responsible for educating employees about debt?

According to Jara, everybody. “If we don’t educate the consumer who will? An indebted consumer who is not going to be productive will hold us back economically—and [Canada] can’t afford that.”

Debt problems, financial planning and financial literacy—these are issues that are not going away, but if employers can help to educate their employees, that can only help employers’ bottom line.

Copyright © 2020 Transcontinental Media G.P. Originally published on

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