Financial Hardship Deepens for Millions: New Report Charts Path to Inclusion

TORONTO, ON – November 21, 2025

A Growing Divide

A sobering new report from Prosper Canada paints a stark picture of financial vulnerability across the country, revealing that over 61% of low-income Canadians are experiencing significant financial hardship. The report, Closing the Divide: Solutions for Canada's Financial Help Gap, details a troubling trend of decreasing wages and dwindling savings for those already struggling, exacerbated by persistent inflation and rising interest rates. The findings underscore a widening gap between those who can weather economic storms and those who are increasingly swept under by them.

“The situation is particularly concerning,” said one financial counselor working with low-income families. “We’re seeing more and more people who previously managed to stay afloat now needing assistance with basic necessities. The rising cost of everything, coupled with stagnant wages, is creating a perfect storm.”

The report highlights that households in the bottom 20% income bracket experienced a 3.3% decrease in wages between 2023 and 2024, while their savings decreased by 2.7% over the same period. Simultaneously, the average debt held by these households remains stubbornly high, at approximately $34,539. These figures are not simply statistics; they represent real people facing impossible choices between food, shelter, and healthcare.

Charting a Course for Financial Inclusion

Closing the Divide doesn’t simply identify the problem; it offers a comprehensive roadmap for action. The report outlines a framework for collaborative efforts between governments, financial institutions, and community organizations to expand access to affordable, appropriate, and trustworthy financial help services. Key recommendations include increased funding for financial literacy programs, streamlined access to social assistance benefits, and innovative solutions to address the debt burdens of low-income Canadians.

The report's recommendations are closely aligned with the goals of Canada’s National Financial Literacy Strategy, particularly its emphasis on strengthening financial knowledge, skills, and confidence. However, experts argue that more robust and sustained investment is needed to truly make a difference. “Financial literacy is important, but it’s not a silver bullet,” said a policy analyst specializing in poverty reduction. “People need access to affordable credit, debt counseling, and meaningful employment opportunities. It requires a multi-faceted approach.”

The report also underscores the importance of addressing systemic barriers that disproportionately impact vulnerable populations, including Indigenous communities, racialized individuals, and people with disabilities. Targeted programs and culturally sensitive services are crucial to ensure that everyone has the opportunity to achieve financial well-being.

A Model for Collaborative Action

Co-operators played a significant role in supporting the development of Closing the Divide, providing both financial resources and expert guidance. Their involvement reflects a growing trend of corporate social responsibility, with businesses recognizing the importance of investing in the communities they serve. “We believe that financial well-being is a fundamental right, not a privilege,” said a spokesperson for Co-operators. “We are committed to working with partners like Prosper Canada to create a more equitable and sustainable financial system.”

The partnership between Prosper Canada and Co-operators serves as a potential model for other businesses looking to make a positive social impact. By combining financial resources with expertise and a shared commitment to social responsibility, they are demonstrating that it is possible to create meaningful change. This collaborative approach is particularly crucial in addressing complex challenges like financial hardship, which require the combined efforts of multiple stakeholders.

The impact of this collaboration extends beyond the funding of the report. Co-operators actively participated in the research process, providing valuable insights and helping to shape the report's recommendations. This level of engagement demonstrates a genuine commitment to addressing the root causes of financial vulnerability and creating lasting solutions. “It’s not just about writing a check,” said one community advocate. “It’s about being a partner in the process and working alongside those who are most affected.”

The current economic landscape, with lingering inflationary pressures and a slowing economy, further amplifies the urgency of addressing these challenges. While inflation has eased somewhat, the cost of living remains high, and many low-income households continue to struggle to make ends meet. Rising interest rates, while aimed at curbing inflation, have also increased the burden of debt for many Canadians. This creates a vicious cycle of financial hardship, making it even more difficult for vulnerable populations to achieve financial stability.

Addressing this crisis requires a coordinated and sustained effort from all stakeholders. Governments need to invest in social safety nets, expand access to affordable housing, and create meaningful employment opportunities. Financial institutions need to offer responsible lending practices and innovative financial products that meet the needs of low-income Canadians. And community organizations need to continue providing vital support services and advocating for policies that promote financial inclusion. The path forward is challenging, but it is essential to ensure that all Canadians have the opportunity to thrive in a fair and equitable financial system.