The trend is feeding into greater consumer anxiety surrounding monthly finances
The sharp recent increase in Canadian insolvencies mainly stemmed from Ontario, Alberta, and British Columbia.
Data from the Office of the Superintendent of Bankruptcy indicated a 19.3% annual upsurge in insolvencies nationwide last September, for a total of 11,935 filings. Consumer proposals had a 30.6% year-over-year increase for a total of 7,222 filings, while bankruptcies had a 5.3% gain during the same time frame to reach 4,713 filings.
Ontario impelled much of this upward trend, with provincial insolvencies growing by 28.5% annually for a total of 3,870 filings in September. Consumer proposals accounted for 2,614 filings (41.6% year-over-year gain), while bankruptcies represented the remaining 1,256 filings (1.6% decline).
Alberta’s pace came not too far behind with a 25.5% annual increase in insolvencies, for a total of 1,411 filings. Normally stable British Columbia posted the third fastest growth rate in September, with a 17.5% year-over-year gain to reach 992 filings.
And although Quebec’s increase during the period was a relatively modest 13.9%, the province had the greatest number of insolvencies, reaching 3,902 filings in September.
The late-October edition of the MNP Consumer Debt Index showed that more than half (54%) of Canadians harboured deep anxieties about obligations like mortgage payments. On average, after bills and debt payments, Canadians were found to be left with only $557 by month’s end.
“Many Canadians don’t have enough to cover all their expenses let alone put anything away for rainy day savings,” MNP LTD president Grant Bazian said. “The reason this is alarming is because it is often unexpected expenses that force people to take on more debt they can’t afford and that begins a cycle of increasing servicing costs, and eventual default.”
