An increasing proportion of Canadians are filing for insolvency due to the difficulty of paying off their accountabilities, according to the latest report by the Office of the Superintendent of Bankruptcy.
Year-over-year, filings in the October-November period spiked up in every province except Prince Edward Island, which exhibited flat growth.
Insolvencies increased the most in Alberta, registering an annual growth of 16% amid the province’s slow recovery from the oil price crashes of recent years.
And while Ontario’s filings only increased by 1% in 2018, this was after 8 straight years of decline. Hoyes, Michalos & Associates Inc. warned that the province’s insolvency rate will increase by “a minimum” of 2% to 5% this year, and may even go up by as much as 8% “if interest rates continue to rise and housing prices fall.”
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Overall, the number of Canadian filings rose by 5.1% year-over-year in November, up to 11,320. The OSB noted that October and November accounted for 22,961 consumer insolvency filings, which was the highest volume for those months since at least 2011.
Canadian Association of Insolvency and Restructuring Professionals board member David Lewis blamed increased borrowing costs, the recent interest rate hikes, and economic uncertainty as the main drivers of the trend.