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Financial Literacy

Canadians are now living longer than ever, so they need to provide for longer retirement. Systemic changes, such as the reduction of employment benefits and a move away from defined benefit pension plans towards defined contribution plans, will also affect Canadians in the future. We will need to acquire the knowledge to take even more responsibility for our personal financial well-being. However, research has found that financial knowledge is surprisingly low.

Financial literacy is particularly essential for self-employed Canadians and owners of small- and medium-sized enterprises (SMEs). Many business owners do not have access to employer pension plans, are financially dependent on professional earnings and savings, and are not financially well-diversified.  Moreover, research shows that poor financial decisions are a key factor underlying job-destroying failure of Canadian SMEs.  

What’s this research about?

“Financial knowledge has a positive impact on the welfare of business owners, of their employees, and on the positive and negative economic prosperity effects of firm growth and failure; however, research has not considered the state of financial knowledge among business owners or what forms of remediation might be needed if Canadians are to thrive,” explains Professor Allan Riding, the lead researcher of a project that has received an Insight Grant by the Social Sciences and Humanities Research Council of Canada (SSHRC).

To address this knowledge gap, Professors Riding, Barbara Orser, and Miwako Nitani from the Telfer School of Management (University of Ottawa) will assess the state of financial knowledge among the 2.2 million Canadians who are self-employed.

In order to do so, the researchers will:

  • compare the level of basic financial knowledge among self-employed Canadians with that of employees;
  • identify and measure domains of financial knowledge deemed most essential to SME owners;
  • correlate financial knowledge with financial practices; and
  • develop a benchmarking tool to guide remedial education of business owners.

Who gains?

Professor Allan RidingThe researchers hope to develop enhanced curricula for business education, enriched public discourse, and improved public policies that will benefit Canadian businesses owners.

Professor Riding and the team also believe that their research insights will complement the strategies and innovations of the Financial Consumer Association of Canada, the Chartered Professional Accountants Associations, and other private and public sector organizations that promote financial literacy in Canada.


The Telfer School of Management is committed to developing cutting-edge research in a variety of topics in management. As our faculty continues fostering research excellence, the Telfer School community and partners also benefit from valuable insights with impact. Over the next weeks, we will give an overview of the eight research projects that received the prestigious SSHRC Insight Grant in 2018. Click here to learn more about how to apply for a SSHRC Insight Grant.


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