Relevance to Canada
A financially resilient individual is able to withstand financial setbacks such as sudden loss of income or unanticipated expenses. Low levels of financial resilience are a strong predictor of financial stress and financial stress can lead to more serious health problems. Financial stress is alarmingly widespread among the Canadian population. If a large fraction of Canadian households is financially fragile, Canadian Society is less able to withstand unexpected shocks.
The events of 2020 and the economic impact of COVID-19 give increased urgency to the topic of financial resilience. The financial cost on all levels of government for financial countermeasures to COVID-19 are becoming apparent. A better understanding of the prevalence and type of financial fragility in Canadian households may allow more targeted policy interventions. In an update to the National Payroll Institute research, the number of Canadians falling into the financially stressed category doubled over the first 6 months of 2020. There is clear value in helping financially stressed individuals understand the root of their financial challenges. This includes providing them with advice (tailored to their specific circumstances) on the steps they may be able to take to change their situation and alleviate their financial stress.