Index Development and Methodology

Index Development Process and Model

The Index has been peer-reviewed by Statistics Canada and leading organizations, and is being used for research, impact measurement and multiple applications.

The Index was developed over more than five years based on an iterative process to regressing and evaluating over 35 potential indicators against self-reported “financial resilience” or “financial stress” measures, using the multiple linear regression technique. In the end, nine variables were determined to account for 62 percent of the variance in the financial resilience construct as of June 2022 and 64 per cent of the variance in the financial resilience construct as of February 2021. The regression model’s indicators (independent variables) are significant at a 95% confidence interval, with p-values less than 0.05.

 The regression model has been validated against all years of Financial Well-being studies data between 2017 and 2022. This has revealed consistency in results, represented by a strong R-squared as well and similar weights of the independent variables as predictors of financial resilience. Note: weightings for the model are based on their overall contribution to the dependent variable in the model and are not equal.

Based on 2017 and 2018 data, six of the nine index model independent variables were available, and in the 2019 data, severn of the independent variables were available. All nine variables are available based on the February 2020 Index baseline data. In July 2022, one of the two variables within the debt composite indicator was replaced.

There were five stages of index development and validation:

  • Identification of potential indicators
  • Data collection for Index development
  • Regression model development with different combinations of potential indicators
  • Indicator selection and
  • Model validation.

Index tracking is conducted at least annually, with tracking every four months in 2020 and 2021. Tracking is conducted based on the needs of our clients and partners, with the June 2022 Index to be published over the coming months.

Index indicators and data are part of longitudinal financial health, resilience and stress longitudinal data from the 2017-2022 Financial Well-Being studies, created by Seymour Consulting. This is a 15minute online survey conducted with 5,000 adult Canadians from a representative sample of the population by province, age, gender, and household income, with respondents recruited through the Angus Reid Forum, Canada’s most engaged and respected online panel.

The Financial Well-Being studies and Index build on the Financial Well-Being Framework developed by Seymour Consulting in 2016. 

Financial Well-Being Framework

Why we Created the Index

As the leading independent authority on financial health, our goal is to help build a financial resilient, inclusive and equitable Canada.

In our uncertain world, this is more needed than ever. We are passionate about the need to foster financial inclusion and financial empowerment, and help individuals, families, businesses and future generations to understand, maintain and/or improve their financial resilience through stressors and shocks in their life.

Seymour Consulting was the first organization to measure the impact of financial stress on different well-being elements of Canadians, with measurement and tracking dating back to 2017 through the longitudinal Financial Well-Being studies.

Index creation was motivated by results confirming that financial stress and financial vulnerability have been mainstream issues for many households since well before the pandemic.

For more information check out our Original Index Release Report 

Through the Financial Well-Being studies, households’ challenges and needs in terms of access to financial products, services, information, help and advice are tracked for Canadians and specific populations. We also track peoples’ needs, challenges and sentiments, reported consumer and financial behaviours, financial and debt stressors and the extent to which financial stress impacts the overall well‐being of households. The extent to which tier one Financial Institutions are helping to improve the financial wellness (and financial resilience) of their customers – and those who are more financially vulnerable – is also being tracked based on independent customer data.

 Customized studies and analytics allow for targeted research and measurement by organizations. Longitudinal benchmarking data allows for trended analytics and impact measurement over time.

Original Index Release Reports

Statistics Canada - Seymour Consulting Report

Low-Income Canadians Financial Vulnerability Report

C.D. Howe Intelligence Memo

Find out more about Index applications or contact us to learn more.