New data shows debt pain for businesses exceeding pre-pandemic levels
Insolvencies in November were 5.1 per cent higher than in October, and 24.4 per cent higher than a year earlier.
The Office of the Superintendent of Bankruptcy says consumer insolvencies were up 24 per cent in November compared with a year ago, while business insolvencies rose 36.8 per cent.
The data, which takes into account proposals and bankruptcies, shows insolvencies for both consumers and businesses continued to rise from pandemic lows.
Business insolvencies rose 41.8 per cent year-over-year in the third quarter of 2023, surpassing pre-pandemic levels.
However, consumer insolvencies in the third quarter were still below pre-pandemic levels.
In November, that trend continued — business insolvencies were higher than in November 2019, while consumer insolvencies were a little lower.
On the heels of that data, MNP LTD, Canada’s largest insolvency practice, reported an all-time low in Canadians’ current debt perception.
Twenty-two per cent of respondents in an Ipsos survey commissioned by the firm saying they perceive their current debt situation as much worse compared to a year ago. Based on a five-year lookback, 28% saw a darkening in their debt picture.
The survey also revealed one in five Canadians (18%) have had to dip into savings, home equity, RSP, or other sources just to address their debt or essential day-to-day expenses.
“With the cost of living on the rise, those households who were already overextended may feel they have to take on more debt just to afford basic necessities,” said Grant Bazian, president of MNP LTD. “The results can be disastrous because they end up trying to fill a hole by digging another one.”
- with files from the Canadian Press
