A growing number of Canadian individuals and businesses are filing for bankruptcy.
In fact, Canada is on track this year to record the largest increase in consumer insolvency filings in a decade and to see the first increase in business insolvencies since 2001, according to a new report by the federal government's Office of the Superintendent of Bankruptcy.
The total number of Canadian insolvencies has increased 8.4% over the past 12 months through the end of September, according to the federal report. The number of consumer insolvencies – which accounted for the majority of filings – increased to 8.5% compared with the same period a year earlier, while business insolvencies grew by 4.1%.
Both consumer and business insolvency filings are expected to increase through 2020, notes the Office of the Superintendent of Bankruptcy. 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.
Consumer insolvencies for the 12 months to September increased the most in Alberta (15.2%), 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%), 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%, followed by information and cultural industries at 42.1%. The finance and insurance sector saw insolvencies rise 27.6%.
Regionally, business insolvencies in the past 12 months rose almost 71% in Newfoundland and Labrador, followed by 75% in Prince Edward Island, 23.4% in British Columbia and 9.9% in Alberta. Ontario and Quebec together accounted for 83% of total business insolvencies in Canada. Saskatchewan was the only province to experience a decrease as the number of business insolvencies fell 14.9% so far in 2019.
