Based on numbers recently released by the federal Office of the Superintendent of Bankruptcy (OSB), total insolvency rates in Alberta spiked 43.5 per cent over the twelve-month period ending in the first quarter of this year. In contrast, the country-wide rate of increase during the same period was 3.7 per cent
Business insolvency rates holding steady
In a 2014 review of Canada's insolvency laws, Industry Canada reported that, unlike other countries experiencing severe business meltdowns in the years following 2008, Canada emerged in comparatively better financial shape, enjoying some of the healthiest job creation and growth rates among G7 nations.
The country's business insolvency rates - some of the lowest among comparable nations - dropped a whopping 70 per cent from 2002 through to the time of the report.
However, recent trends show a levelling off in this decline, and perhaps increasing disparity between provinces. According to statistics compiled by the OSB, to the end of the first quarter of this year, business insolvencies were down 4.7% year-over-year, with a wide range among the provinces from PEI with 31.6% fewer insolvencies and Saskatchewan with 35.4% more.
Consumer insolvency rates continue to rise
Numbers on the consumer side stand in contrast, with Canadians shouldering one of the highest consumer debt-to-income ratios in the G20. And according to a May 31 report from the OSB, so far this year across Canada, consumer bankruptcies were up 33% over last year.
The reasons behind the contrasting trends in business and consumer insolvencies are not clear. But stakeholders continue to look to legislators for ongoing reviews of and adjustments to Canada's insolvency regime as economic conditions continue to evolve over time.