man at work on his laptop while suffering from a headache.

A new study by national charity Prosper Canada, undertaken with funding support from Co-operators, finds that Canadians with low incomes are increasingly financially vulnerable but lack access to the financial help they need to rebuild their financial health.

The report, Missing for those who need it most: Canada’s financial help gap, shows that affordable, appropriate and trustworthy financial help for people with low incomes is a critical but missing piece in Canada’s financial services landscape. People with low incomes are unlikely to find help when they need it to plan financially, develop and adhere to a budget, set and pursue saving goals, file their taxes outside of tax season, and access income benefits.

All Canadians are facing increased costs of living, related to inflation. However, for people with low incomes, who spend a much higher proportion of their incomes on basic needs, this has led to a financial crisis, which is undermining an inclusive recovery from the pandemic. Not only are people with low incomes experiencing increased levels of financial vulnerability and stress, but they are also unable to find the support they need to help them with their finances and financial challenges.

The report highlights key barriers preventing people from accessing the help they need. These include:

  • People with low incomes have distinct circumstances and challenges that impact their ability to access and afford financial help services.
  • People with low income are less likely to trust financial professionals, and people who are low-income and Indigenous or racialized do not always feel respected by them.
  • Mainstream financial information, guidance and advice is often not appropriate for people with low incomes because it fails to consider their distinct circumstances, and there are few appropriate financial help services for this population.
  • There is no strong commercial business case for seeking and serving clients with low incomes due to limited profit generation opportunities.

While there are a small number of community organizations across Canada that provide a full range of local financial help services, they lack the resources and geographic reach to meet the needs of Canada’s low-income population more broadly.

“We all benefit from quality financial help, but every day, Canadians with low incomes are left to navigate a complex array of financial products and services on their own, many of which are not appropriate to their needs or, in some cases, undermine their financial health. Government benefits and credits that can help them to build their financial health are often also very hard to navigate and access effectively,” said Elizabeth Mulholland, CEO of Prosper Canada. “When we fail to ensure people with low incomes have access to affordable, appropriate and trustworthy help to safely navigate these financial services, the result is widespread and unnecessary financial stress, hardship, and crisis.”

“At Co-operators, our core purpose is to provide financial security for Canadians and our communities. There is no question that for people with low incomes, this security is increasingly elusive,” said Chad Park, Vice-President of Sustainability and Citizenship at Co-operators. “The findings in today’s report highlight a critical societal gap and an ill-met need that has been largely left unaddressed by the financial sector. Equipped with this research, financial services providers can and should take necessary steps to build a more inclusive and resilient financial system for all Canadians.”

Research shows that receiving financial help is associated with increased financial health and resilience, but 800,000 low-income Canadian households were unable to access financial help in 2022.1 These households are among millions whose financial health has plummeted since the onset of the COVID-19 pandemic and who have not recovered.

The report’s findings were informed by the participation of financial help providers from all sectors – including retail banks, insurers, credit unions, financial planners, credit counsellors, commercial tax preparers, governments and non-profit community organizations. Prosper Canada invites governments, financial service providers, and community organizations to join us in the next phase of our work – finding solutions to fill this critical market gap so that everyone can get the help they need to build their financial health.