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November 30, 2020

Children’s literacy and the economy: Insights from Deloitte’s new analysis of low literacy in Canada

It’s no secret that the pandemic is causing the greatest economic and social upheaval of our generation. What may come as a surprise is the role that our kids’ literacy will play in addressing those enormous societal challenges.
 
A new report from Deloitte shows that investing in children’s literacy is a key dimension of supporting families who are struggling today, and of building a stronger and more equitable Canada for tomorrow.
 
An Economic Overview of Children’s Literacy in Canada, which Deloitte prepared for the Canadian Children’s Literacy Foundation, is the first report of its kind in nearly a decade. It paints a compelling picture of why investing in early literacy is the cornerstone of children’s health, education, future employment and income, and why it is critical for the future of Canada.
 
Strong literacy is more important than ever
In our knowledge-based economy, demand for highly skilled workers is rising. People with weak, or even fair, literacy skills will struggle to find work. On the other hand, a highly literate workforce puts Canada on a strong footing to compete globally and thrive economically.
 
Yet one million Canadian children under the age of 15 are estimated to have below grade-level literacy skills. That is about one in eight kids. And the percentage of 15-year-olds with the lowest levels of literacy has increased over the past decade.
 
Changing this trajectory would help all Canadians. Deloitte’s report indicates that a one per cent increase in adult literacy would create an economic benefit of $67 billion in gross domestic product for Canada per year. That could boost the standard of living for everyone.
 
Investing in the early years drives the best outcomes
So what is our best path to improving literacy in Canada? The answer lies in the early years. Deloitte’s analysis shows us that investing in early learning is highly effective and has a greater economic return than investments made when a child is older.
 
The quality of a child’s learning in the years before Grade 1 makes a massive difference to their ability to read, write and communicate later in life. But 27 per cent of kids start Grade 1 without some of the early developmental skills they need to be able to learn to read. While this includes children from all socioeconomic groups, Deloitte’s report notes that a disproportionate number come from low socioeconomic communities and/or households.
 
Some children never catch up.
 
Kids who lack early developmental skills are significantly more likely to be behind in reading by the time they reach Grade 3. In fact, Deloitte’s analysis shows that about 25 per cent of children can’t read at grade level by Grade 3. These are the children who are most likely to struggle in all school subjects because they don’t have the strong reading skills they need to be successful students.
 
Without a solid early learning foundation, children may face challenges throughout their lives
The report shows that children with gaps in their early learning are more likely to struggle with unemployment, poor health and other negative outcomes when they grow up. A child’s early years also affect their mental health throughout childhood and into adulthood.
 
Children’s verbal skills at age five, for example, are associated with better mental health outcomes and reduced mental stress in adults in their mid-thirties and forties. The important social, cognitive and self-regulation skills children develop in those crucial early years affect not only the child’s school readiness and learning outcomes but also their resilience. Families can help their children develop those skills by reading, speaking and singing with them from birth. These early literacy interactions help a child learn how to understand the world around them, form connections with others, and thrive.
 
Early literacy investments can foster stronger, more equitable pandemic recovery
Deloitte has crunched the numbers and we know that too many children are not developing the literacy skills they need to reach their full potential. We also know that literacy is foundational to both equity and economic competitiveness. That’s why we are working to strengthen opportunities for early literacy development for all children.
 
We believe that all children – and particularly those in low socioeconomic communities – will have a better start if their families have greater access to literacy resources in the early years. Deloitte’s report also highlights that Canada has incomplete and inconsistent data on literacy, particularly for children aged 0 to 5, and we need to rectify that in order to fully understand and address the issue.
 
As the report notes, investments in early literacy for all can help to create a more inclusive, equitable economic recovery from the COVID-19 pandemic and a higher standard of living in the long run. In the coming months, we will be building on the report’s recommendations and findings through our work. We look forward to discussing the report’s key takeaways and the gaps it reveals in literacy development across Canada. These ongoing conversations will help to inform our work as we continue to develop, champion and execute on programs that enable all children in Canada to have the literacy skills they need to achieve their full potential.
 
A note on methodology: Deloitte’s report draws on publicly available data, secondary literature, stakeholder consultations and a public opinion survey.
 
Please find the full report here.