Personal bankruptcies falling in Canada; so what

The Office of the Superintendent of Bankruptcy (OSB) recently reported that nationally bankruptcies in April 2014 fell by 8.8% compared to a year earlier.  While Alberta filings fell by 20.9% New Brunswick realized an increase of 48.5%.  Although touted as good news by the OSB via mainstream media one must recognize that comparing a one month data set from one year to the next nary is a trend confirmed.

Although eternal optimists may point to the fact that Alberta’s low unemployment rate, strong labour market and increasing weekly earnings are helping stave off bankruptcies the writer would suggest that the Bank of Canada’s insistence of maintaining an ultra-low interest rate policy since September 2010 has a little more to do with it.

While borrowers continue to be supported by the Bank of Canada in order to keep the game going a little bit longer the savers out there will continue to be punished via their forced subsidization of borrowers with cheap money, however in the long run, the futures of the fiscally prudent will shine in comparison.