Canadian bankruptcies hit all time-low but the economy looks shaky

Dated: February 12 2019

Views: 85

Canadian bankruptcies hit all time-low but the economy looks shaky

View photos
(Getty)

Far fewer Canadians filed for bankruptcy in December, according to the Office of the Superintendent of Bankruptcies.

The total number of insolvencies (bankruptcies and proposals to settle debt under conditions other than the existing terms) fell 20 per cent compared to the previous month.

“Canadian consumer bankruptcies hit a new all-time record low as a share of the adult population,” says Derek Holt, head of capital markets economics at Scotiabank, in a research note.

“Even proposals dipped in December and while they’ve risen over time, they really haven’t budged over the past year.”

View photos
Bankruptcies hit a new all-time record low as a share of the adult population

There is a fly in the ointment though. Total insolvencies in December were 3.8 per cent higher compared to the same time in 2017. There’s also a seasonal effect.

“December traditionally sees lower insolvencies as people generally wait until after the holidays to evaluate their situation. Therefore, it’s not the best month to gauge the overall picture,” Laurie Campbell, CEO at Credit Canada Debt Solutions, told Yahoo Finance Canada.

Campbell notes insolvencies have been extremely low since the financial crisis in 2009.

“However, the outlook for 2019 appears to indicate that insolvencies will rise due to a number of key factors: interest rates rising, consumer indebtedness at an all time high and the slowing of the housing market, all resulting in a shakier economy,” says Campbell.

Ontario had the most insolvencies while Nunavut had the fewest.

Business insolvencies fell 0.8 per cent compared with the 12-month period ending December 31, 2017. The biggest decreases were in manufacturing, mining, along with oil and gas extraction. The biggest increases were in construction; and real estate and rental and leasing.

Blog author image

Steven Axford

Steve is a award winning Realtor in Victoria BC, with his listings selling faster and for top dollar! Growing up in Victoria, BC and has always been active in his community. Steve is a Victoria Couga....

Latest Blog Posts

´╗┐The 2021 Victoria real estate market year in review

The 2021 Victoria real estate market year in reviewA total of 438 properties sold in the Victoria Real Estate Board region this December, 30.6 per cent fewer than the 631 properties sold in December

Read More

No change on the horizon for the Victoria real estate market

December 1, 2021  A total of 653 properties sold in the Victoria Real Estate Board region this November, 17.9 per cent fewer than the 795 properties sold in November 2020 and 12.3 per cent

Read More

A greater commitment to development required to balance local housing market

October 1, 2021  A total of 761 properties sold in the Victoria Real Estate Board region this September, 23.1 per cent fewer than the 989 properties sold in September 2020 and 8.4 per cent

Read More

CMHC says annual pace of housing starts in Canada slowed in July

OTTAWA — Canada Mortgage and Housing Corp. says the annual pace of housing starts in July fell compared with June.The national housing agency says the annual pace of starts fell to 272

Read More