A growing number of Canadians are finding it difficult to pay off their financial accountabilities, according to a report by the Office of the Superintendent of Bankruptcy late last week.
In its latest analysis, the bureau found that the proportion of Canadian seeking debt relief went up by 5.1% year-over-year in November, up to 11,320.
Taken together, October and November accounted for 22,961 consumer insolvency filings, which the OSB stated was the greatest number for those months since at least 2011.
“We’re seeing a bump, and in some provinces that bump is significant,” Canadian Association of Insolvency and Restructuring Professionals board member David Lewis told BNN Bloomberg.
Lewis attributed the trend to the rising costs of borrowing stemming from interest rate hikes, along with sustained economic uncertainty and weaker housing prices.
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On an annual basis, October-November filings increased in every province except Prince Edward Island, which registered flat numbers. Alberta, which is still recovering from the worst effects of the oil price crashes, saw the greatest growth in the number of insolvencies at a year-over-year rate of 16%.
Red-hot Ontario saw its filings increase by 1% in 2018, after 8 consecutive years of decline in this metric. Hoyes, Michalos & Associates Inc. estimated that insolvencies in the province 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.”
“Increased proposal filings may represent the tip of the wave,” licensed insolvency trustee and firm co-founder Ted Michalos said. “The people that want to be pro-active file first, the rest of the folks that are in trouble are still to follow.”