More than three million people in Canada are living with low incomes and significant financial hardship, according to new research from Prosper Canada funded by Co‑operators – a finding with clear implications for insurers, intermediaries and other financial services providers.
The report, Closing the Divide: Solutions for Canada’s Financial Help Gap, found that 61% of low-income Canadians, or about 3.08 million people, are in serious financial stress.
On average, they carry $34,539 in "negative savings" and were the only income group whose savings fell between 2023 and 2024. The authors argued that the core problem is not a lack of financial products, but a lack of access to trustworthy, practical financial help that reflects people's real circumstances.
“The report highlights a deeply concerning gap that affects the financial security of people in Canada and the strength of our communities,” said Jessica Fisher, associate vice president, citizenship at Co‑operators. “Millions of people with low-income lack access to trusted financial help and advice tailored to their needs, threatening financial security at a community level. There is an urgent need to expand access to community-based financial support services and improve the availability of government benefits. By acting now and working together, we can build a future where every Canadian has the support and resources they need to thrive.”
Prosper Canada’s analysis points to structural barriers that prevent many low‑income households from using supports already available to them.
The report estimated that roughly one in five low‑income Canadians are missing key tax credits and benefits, often because they do not file tax returns at all or self‑file in situations that are too complex for them to manage confidently. A lack of trust in mainstream financial providers and advice that feels generic or product‑driven are cited as important factors behind this under‑utilization.
The solution framework sets out a series of proposed actions, including expanding free or low‑cost financial planning and coaching, implementing automatic tax filing for straightforward cases, investing in community‑based financial help, and reviewing the accessibility of existing services. The emphasis is on making guidance and benefit access more inclusive and easier to navigate, particularly for people who are already under financial strain.
“Our research in Closing the Divide highlights a significant societal issue that disproportionately affects underserved communities,” said Elizabeth Mulholland, CEO of Prosper Canada. “This comprehensive solution framework, developed with Co-operators, provides a clear approach for governments, financial institutions, and community organizations to work together. By addressing these barriers and fostering collaboration, we can help ensure every person in Canada has equitable access to the financial tools and support crucial for their well-being and a more financially resilient future.”
The findings come against a wider backdrop of elevated household stress.
Canada’s household debt‑to‑income ratio was about 176.7% in late 2024, meaning households owed roughly $1.77 for every dollar of disposable income. Consumer insolvencies have also climbed: Canadians filed 140,457 consumer insolvencies in 2025, a 2.3% increase on 2024 and above the pre‑pandemic peak in 2019. While the growth rate has moderated, the Canadian Association of Insolvency and Restructuring Professionals has described insolvency volumes as “historically elevated.”
In this environment, Prosper Canada and Co‑operators argued that simply extending more credit is not the answer. They call instead for measures that stabilize cash flow, reduce avoidable debt and connect people to public supports that often go unclaimed.
For Co‑operators, the work aligns with its broader positioning as a purpose‑driven financial co‑operative with a focus on resilience and inclusion. The Guelph‑based group has set targets to allocate a growing share of its investment portfolio to impact, climate transition and resilience assets by 2030 and has framed financial inclusion as a core business priority rather than a side‑line corporate social responsibility initiative.
Prosper Canada’s report complements the charity’s Resilient Futures program, a four‑year, federally funded $60 million initiative delivered through community partners. That project aims to help one million low‑income Canadians access an estimated $2 billion in benefits and tax refunds through free tax filing assistance, benefits navigation and financial coaching, effectively creating localized “financial help hubs” across the country.
While the report did not prescribe specific insurance solutions, it sketched a landscape in which insurers, co-operatives, brokers and MGAs are likely to be judged not just on capital strength and claims performance, but also on how effectively they help customers build basic financial security and navigate shocks.
Thus, the “financial help gap” identified in the report is not just a social policy concern; it is increasingly a strategic and reputational issue for the sector itself.
