‘Flying Blind’: Canadians Face Complex Financial Landscape with Limited Know-How

November 11, 2025 – Earlier generations of retirees fared well despite limited financial literacy thanks to simpler pension systems. But what used to be a relatively simple flight plan has turned into a far more complicated journey for today’s Canadians, who face a self-directed financial landscape, according to a new report by the C.D. Howe Institute.

In “Learning to Fly: How Canadians Can Navigate a More Complex Financial Landscape,” authors Pierre-Carl Michaud and Bernard Morency warn that Canadians, especially in the private sector, are partially left to their own devices for their financial futures as employer-defined benefit pension plans diminish and reliance on private savings steadily grows. With many Canadians lacking even basic financial literacy, the authors argue that individuals urgently need better guidance to navigate the expanding range of financial products and decisions they face.

“Choice architecture can help overcome inertia, especially when people are essentially flying blind through their financial decisions,” said Pierre-Carl Michaud, economist and professor at HEC Montréal. “But without understanding why saving more matters, people simply won’t do it. At the core, there is a financial literacy problem. Education and architecture are complements.”

The report highlights, based on existing research, that many Canadians are effectively flipping a coin when choosing between a TFSA and an RRSP. While Canada benefits from strong first and second pillars of retirement income, the environment surrounding private savings has changed dramatically. Household net worth more than doubled from 1990 to 2024, yet access to private registered pension plans has fallen sharply. This shift highlights the growing risks of a system that places more responsibility on households, who often struggle to determine which savings vehicle best suits their needs.

“Canadians live longer, often 20 years or more after turning age 65,  but few know how much savings they will need or how to transform their savings into reliable income to supplement the guaranteed, inflation-protected retirement benefits they will receive from public pensions programs like Old Age Security, Guaranteed Income Supplement and Canada and Québec Pension Plans,” said Bernard Morency, co-chair of the C.D. Howe Institute’s Pension Policy Council. “It is as if Canadians have been moved from passengers to pilots in their own financial airplanes, with many having little flight training.”

The report explores how financial education, financial advisors and artificial intelligence can help. It calls for governments to take a more active and coordinated role. Policy interventions should include using choice architecture to improve saving incentives, establishing a minimum baseline of financial literacy through targeted education and responsibly deploying AI to both strengthen financial literacy and support the supply of financial advice.

Read the Full Report

For more information, contact: Pierre-Carl Michaud, Professor, HEC Montréal; Bernard Morency, Co-Chair, Pension Policy Council, C.D. Howe Institute, and Adjunct Professor, HEC Montréal; and Raquel Schneider, Communications Officer, C.D. Howe Institute, 647-805-3918, rschneider@cdhowe.org.

The C.D. Howe Institute is an independent not-for-profit research institute whose mission is to raise living standards by fostering economically sound public policies. Widely considered to be Canada’s most influential think tank, the Institute is a trusted source of essential policy intelligence, distinguished by research that is nonpartisan, evidence-based and subject to definitive expert review.

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