The federal government finally has appointed a chief to lead the Sisyphean task of improving financial literacy in Canada. The initiative is well intentioned, but it’s also doomed to fail.

You need only contemplate the overstretched balance sheets, the excessive debt and the dearth of retirement savings for the average Canadian household to see the critical need for greater financial sophistication. The job of the new national Financial Literacy Leader, Jane Rooney, is to co-ordinate the vast array of disparate, inchoate efforts at improving financial literacy in this country and to come up with a national strategy for addressing the problem.

However, it would be a mistake to suppose that a national literacy strategy is any kind of solution to the perilous state of household finances in this country. The problem goes much deeper than can be solved by simply providing better explanations of financial terminology and concepts.

For a start, the problem is less an issue of literacy and more one of numeracy. Too many people simply don’t understand numbers, or basic mathematical principles. So, it’s difficult to translate financial abstractions, such as interest rates or risk and return metrics, into meaningful, real-world results that allow people to make well-informed decisions.

We are all subject to a host of cognitive and behavioural biases that weigh against sound financial decision-making. Endowment effects, hyperbolic discounting and a host of other logical fallacies impair our judgment. Even people who would be counted as being thoroughly financially literate and numerate can have a hard time overcoming these blind spots.

There’s no reasonable prospect that these deep-seated failings can be overcome by a lone bureaucrat with a modest budget and a host of good intentions – particularly in the face of the billions of dollars that are spent each year by marketers to push people into poor financial decisions.

More robust consumer protection rules could help. Better yet, policy-makers should be reforming the retirement savings system to bolster Canadians’ future financial security, thereby reducing the most severe consequences of the bad financial choices that many Canadians make today.

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