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

Dated: 02/12/2019

Views: 48

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 Axford grew up in Victoria, BC and has always been active in his community. Steve is a Victoria Cougars Hockey Team alumni as well as a Victoria Shamrocks (intermediate) alumni. During his time....

Latest Blog Posts

Weekly mortgage applications point to a remarkable recovery in homebuying

If mortgage demand is an indicator, buyers are coming back to the housing market far faster than anticipated, despite coronavirus shutdowns and job losses.Mortgage applications to purchase a home

Read More

Rent is due: worries about being able to pay

Property managers, landlords and building owners are bracing for bad news today, as the COVID-19 pandemic’s effect on the economy is expected once again to disrupt the property rental market

Read More

As sales decline, some home and condo prices increase

Despite a global pandemic that has decimated economies around the world, Victoria’s real estate market continued to chug along in April, albeit at a much slower pace.Selling prices in some

Read More

Victoria Spring market far from the usual as real estate continues to react to pandemic

A total of 287 properties sold in the Victoria Real Estate Board region this April, 58.8 per cent fewer than the 696 properties sold in April 2019 and 52.8 per cent fewer than the previous month of

Read More