A woman walks past a shop with closing down sales signs. File photo by THE ASSOCIATED PRESS

A woman walks past a shop with closing down sales signs. File photo by THE ASSOCIATED PRESS

Canadian consumer and business insolvencies on track for large gains in 2019

TORONTO — Canada is on track this year to record the largest increase in consumer insolvency filings in a decade and the first increase in business insolvencies since 2001, says a national association of insolvency and restructuring professionals.

The total number of Canadian insolvencies increased 8.4 per cent over the past 12 months to September, according to a report from the federal government’s Office of the Superintendent of Bankruptcy.

The number of consumer insolvencies — which accounted for the vast majority of filings — increased to 8.5 per cent compared with the same period a year earlier, while business insolvencies grew by 4.1 per cent.

“We’re very confident that 2019 as a calendar year will also be the first increase in business insolvencies that we would have experienced since 2001,” says Grant Christensen, CEO of the Canadian Association of Insolvency and Restructuring Professionals.

Both consumer and business insolvency filings are expected to increase through at least 2020, he said in an interview.

“I think what you’ll find is that consumer insolvencies will start to level off come 2021 and similarly business insolvencies may have another slight increase next year but I expect that they will level off certainly after 2020 and maybe even have a slight decline,” Christensen added.

Insolvencies have risen amid a slowing economy and the lagging effect of higher interest rates that make it more difficult for borrowers to keep up with payments.

“There is a strong correlation between interest rate changes and consumer filings but we see a two to three year lag between rate increases and a growth in the number of insolvencies,” stated Andre Bolduc, an association board member.

“Sustained increases in living costs and debt servicing costs have created an environment in which more people are struggling to stick to their repayment terms.”

Consumer insolvencies for the 12 months to September increased the most in Alberta (15.2 per cent), Newfoundland and Labrador (14.8), Manitoba (13.1), Ontario (13.4) and British Columbia (9.5). More moderate increases were felt in Nova Scotia (6.2 per cent), PEI (3.2) Quebec (1.8) and Saskatchewan (1.6).

The mining, oil and gas extraction sector led the way on the business side, growing by 55.2 per cent, followed by information and cultural industries at 42.1 per cent. The finance and insurance sector was up 27.6 per cent.

Regionally, business insolvencies in the past 12 months rose almost 71 per cent in Newfoundland and Labrador, followed by 75 per cent in Prince Edward Island, 23.4 per cent in British Columbia and 9.9 per cent in Alberta. Ontario and Quebec together accounted for 83 per cent of total business insolvencies in Canada but each province experienced modest growth of 4.1 and 2.6 per cent respectively.

Saskatchewan was the only province to experience a decrease as the number of business insolvencies fell 14.9 per cent.

Just Posted

Red Deer South MLA Jason Stephan addressed the Rotary Club Red Deer East at Pidherney Curling Centre on Tuesday.
Photo by PAUL COWLEY/Advocate staff
Central Alberta MLAs comment on UCP members kicked out of caucus

A pair of central Alberta MLAs have commented on the two United… Continue reading

Contributed photo
Johanna Hannaford: Central Alberta designer offers inclusive clothing

By Stephanie Rhodes Local designer Johanna Hannaford’s inclusive clothing creations are smashing… Continue reading

Red life-ring with splash
Started from the bottom: How a family business started and grew in central Alberta

By Carina Moran We started our business in the basement of our… Continue reading

Shiree Appleman
Innisfail RCMP looking for missing woman

Innisfail RCMP is asking the public to help locate a woman who… Continue reading

Rotary Club of Red Deer logo.
Red Deer Rotary Club hosting tree planting event later this month

The Rotary Club of Red Deer will host a tree-planting event later… Continue reading

Bo’s Bar and Grill owner Brennen Wowk said the hospitality industry is looking for more clarity from the province around what conditions must be met to allow for restaurants reopening. (Advocate file photo)
Frustated restaurant owners want to know government’s reopening plan

Restaurant owners feel they are in lockdown limbo

Welcoming cowboy boots at the historic and colourful Last Chance Saloon in the ghost town of Wayne near Drumheller, Alta., on Thursday, Sept. 19, 2019. The bar and hotel are up for sale. THE CANADIAN PRESS/Jeff McIntosh
‘It was a going concern’: Remaining bar and hotel in Alberta coal ghost town for sale

WAYNE, Alta. — Built during the First World War, it survived the… Continue reading

A letter from a bottle that washed up in New Brunswick in 2017 is shown in an undated handout photo. A team of researchers from Université du Québec à Rimouski are trying to solve the mystery of whether a letter in a bottle that washed up in New Brunswick in 2017 was indeed from a young victim of Titanic shipwreck or simply a hoax. THE CANADIAN PRESS/HO, N. Beaudry, UQAR *MANDATORY CREDIT*
Real or hoax? Quebec scholars probe mystery letter allegedly from Titanic passenger

MONTREAL — Researchers from Université du Québec à Rimouski are trying to… Continue reading

Minister of Transport Marc Garneau takes part in a press conference on Parliament Hill in Ottawa on Tuesday, Nov. 26, 2019. Advocates, experts and opposition MPs say correspondence showing close communication between the federal Transport Department and the Canadian Transportation Agency regarding passenger refunds throws into question the independence of the CTA, an arm’s-length body. THE CANADIAN PRESS/Sean Kilpatrick
Emails reveal close communication between government, transport regulator on refunds

OTTAWA — Advocates, experts and opposition MPs say correspondence showing close communication… Continue reading

Pharmacist Barbara Violo shows off a vial of the Oxford-AstraZeneca COVID-19 vaccine in Toronto on Friday, March 12, 2021. Several family doctors and physician associations across Canada say they welcome questions from anyone concerned about second doses of Oxford-AstraZeneca or any other COVID-19 vaccine. THE CANADIAN PRESS/Nathan Denette
Family doctors say they can answer vaccine questions, after Trudeau recommends them

Several family doctors and physician associations across Canada say they welcome questions… Continue reading

The Olympic rings float in the water at sunset in the Odaiba section of Tokyo, Wednesday, June 3, 2020. A new Leger poll suggests Canadians are divided over plans to send athletes from Canada to the upcoming Olympic games in Tokyo as Japan grapples with climbing COVID-19 cases. THE CANADIAN PRESS/AP, Eugene Hoshiko
Canadians divided on sending Team Canada athletes to the Tokyo Olympic Games: poll

OTTAWA — A new poll by Leger and the Association of Canadian… Continue reading

Harley Hay
Harley Hay: Insert your name here

Back in the Paleolithic Era when a McDonald’s cheeseburger was 29 cents… Continue reading

Black Press file photo
Job search: Write a request that will get accepted

Last Thursday, when I logged into LinkedIn, I had nine connection requests… Continue reading

T-shirt with vaccine shot. (Contributed photo)
Letter: Hand out T-shirts with vaccine shots

I made myself a graphic T-shirt recently after getting my vaccine shot.… Continue reading

Most Read