While total insolvency filings in Canada declined 1.1% in August 2013 compared to August 2012 and are down 2.7% over the past 12 months, significant regional differences continue.
Ontario and Quebec together account for more than 70% of all bankruptcy and consumer proposal filings in Canada. Yet the difference between the two regions is striking. Ontario, creeping it’s way through the economic recovery, experienced an 8.4% decline in consumer filings in August. This is contrasted sharply with a 10.6% rise in Quebec insolvencies.
Four other provinces reported an increase in bankruptcy and consumer proposals in August – Manitoba, New Brunswick, Nova Scotia and PEI.
Overall Levelling Out
On a year to date basis, total insolvencies reached 80,683 in 2013, compared to 80,052 in 2012. It is likely that insolvencies are reaching a near normal level in 2013. We are not expecting to see the level of overall reduction we have seen since the peaks of the last recession. In fact, it is more likely that there will be upward pressure whenever interest rates begin to rise.