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It’s no secret that during quarantine, Covid-19 impacted nearly every aspect of our lives. For many Canadians these impacts extended to their financial resilience.

For some, the financial impact was positive: lockdowns led to cancelled travel plans and a drastic drop in discretionary spending, leading to many months of forced savings. For others — especially those whose incomes were affected by the pandemic — budgets were stretched to their limits, and savings were depleted. The government needed to spend a significant amount of money to help people manage through the crisis.

While daily life now looks more as it did pre-pandemic, research shows Canadians’ level of financial resilience hasn’t improved. In fact, in many cases, Canadians have lower levels of resiliency than they did during the pandemic.

When we at FP Canada discuss financial resilience, we’re talking about a household’s ability to get through the financial hardships, stressors and shocks that come as a result of unplanned life events. This definition comes from the Financial Resilience Institute, a non-profit dedicated to improving the financial resilience of all Canadians and global citizens.

As we’ve emerged from the worst of the pandemic, this crucial measure of financial health has worsened across the country. According to the Seymour Financial Resilience Index, which is used by the Financial Resilience Institute to measure and track households’ financial resilience in Canada, the proportion of households considered financially resilient has declined. It’s gone from 31.1% in June 2021 to just 22.2% in 2022.

This marked decrease is partly a reflection of Canadians’ return to pre-pandemic lifestyles — and the associated uptick in spending. Beyond that, surging inflation has played a big role. In fact, recent data from Statistics Canada revealed that inflation and other economic pressures led to a 6% drop in average household net worth in the third quarter of 2022, with lower-income households hit the hardest.

In addition, a recent StrategyCorp Institute of Public Policy and Economy white paper commissioned by FP Canada found that, as of June 2022, 86% of Canadians said the cost of living has outpaced any growth they’ve seen in their household incomes. Rising interest rates are a problem for 61% of Canadians, and 41% report experiencing significant financial hardship.

To put this issue in perspective, it’s important to understand what low financial resilience looks like day-to-day. For many, it means living from paycheque to paycheque. According to the Financial Resilience Index, a total of 28% of Canadians reported having a household savings buffer of less than three weeks. In lower-income homes, that number increases to 46%.

These statistics are worrying, and they reveal a need for change. Canadians across all income levels deserve the peace of mind that comes with financial resilience, but achieving it isn’t always easy. It requires an approach that’s both deliberate and multi-faceted. That’s where professional financial planning comes in.

The right financial planner can help clients see their comprehensive financial picture — and set them on a course toward meeting their long-term goals and achieving financial resilience. By working with a professional financial planner, Canadians can develop and implement a holistic financial plan to help ensure they are prepared to manage through unanticipated events.

Research backs this up, indicating that professional financial planners are particularly well-positioned to assist households in improving their financial resilience. According to FP Canada’s 2022 Financial Stress Index, for example, only 39% of those who work with a financial planner said the pandemic has impacted their financial stress, compared to 59% of those who don’t work with a planner. Despite this fact, our research shows only 4% of Canadians work with a professional financial planner.

The cost of financial planning is often seen as a barrier to seeking help, especially in low- and middle-income households. All too often, those who could benefit most from this type of assistance don’t feel they can afford it.

This isn’t an insurmountable obstacle. Currently, the federal government is working toward building a more resilient economy. These efforts present an opportunity for public policy solutions supported by government investment, which could help us address the perceived cost barrier that’s preventing many Canadians from seeking help.

Of course, investment alone isn’t enough. At FP Canada, we are undertaking many parallel initiatives aimed at improving financial resilience for Canadians. For example, we are developing pro bono financial planning programs and partnering with organizations dedicated to serving vulnerable people. We’re developing educational seminars designed to help new Canadians navigate the financial and tax systems. And through our Fintellect Initiative, we are working with industry partners to explore ways to leverage new and emerging technologies to enhance the practice of professional financial planning and increase its accessibility for Canadians.

To truly make a difference, this needs to be an industry-wide effort. And the profession must think beyond its existing clientele. We must remember that many lower- and middle-income Canadians believe a solid financial plan is out of reach — and that in many cases, their financial resilience is suffering because of it.

Enhancing financial resiliency is critical for individual Canadians and also leads to a stronger Canadian economy — and that’s good for us all. It means that next time Canadians face challenges like the ones we experienced during the pandemic, they will be better prepared — and won’t need to rely so heavily on the government for help. By working together, policy-makers and the financial planning profession can pave the way to a more financially resilient Canada.

Tashia Batstone is president and CEO of FP Canada.