Worrying signs in relation to insolvency in Canada

The insolvencies of consumers jumped last year to the country, but the increase has been much lower in Quebec, according to data released Monday by the Office of the superintendent of bankruptcy of Canada.

In the country, there was an increase of 9.5% in 2019 compared to the previous year, but only 2.7 % in Quebec. The increases have been particularly strong in Ontario (15.4 %), Newfoundland and Labrador (15 %) and Alberta (14.6 per cent).

These records, which include bankruptcies and proposals to creditors.

The total number of insolvencies has increased to nearly 12 000 by report to 2018 to reach 137 178 in 2019. It is the highest total since 2009, according to the daily newspaper “Globe and Mail“.

This phenomenon is worrisome to economists.

“It is worrying to see that there has been an increase of cases of insolvency in a labor market health, said the economist of the TD Bank Ksenia Bushmeneva to the daily toronto, Tuesday. The increase of the insolvency is never a good thing.”

In Ontario, the increase of the debt to real-estate would be responsible for solvency problems, according to Scott Terrio, responsible for this file at Hoyes, Michalos Licensed Insolvency Trustees.

“Imagine what the rents and mortgages of ten years ago. I don’t remember anymore, but it is now a big difference,” he told the “Globe and Mail“.

On the corporate side, the number of insolvencies grew by 2.8% in the last year in Canada compared to 2018. In Quebec, the increase was 1.5 %.

At the national level, “the three sectors that registered the largest increase in this chapter are those of the manufacturing, services, professional, scientific and technical, and wholesale trade. The construction sector, the accommodation services and catering and the retail trade recorded the largest decrease in the number of insolvencies,” said the Office of the superintendent of bankruptcy of Canada by issuing a press release on Monday.

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