“I think we’re still going to see a slight increase in 2020,” André Bolduc, an executive board member at the Canadian Association of Insolvency and Restructuring Professionals, said in a phone interview from Ottawa. “We’re hoping the economy stays strong so that the increases stay healthy and it doesn’t become a crisis.”
On the less alarming side, adjusting the number of insolvencies to account for population growth shows the increase isn’t as dramatic. As a share of total debt, the rate of filings also appears to be more stable.
In addition, the lion’s share of the increase in the past decade has been so-called consumer proposals, where the debtor agrees with creditors to pay back a proportion of what’s owed. Proposals are considered less severe than bankruptcies, the other form of insolvency reported by the Ottawa-based OSB.
Canada depends on exports to both the USA and China for its prosperity. The slowdown in US manufacturing as a result of the trade war will have had some impact which should now be moderating from the signing of the USMCA. However, the knock-on effect from China’s freezing of economic activity on commodity demand represents a significant challenge that is only now being considered.Click HERE to subscribe to Fuller Treacy Money Back to top