Canadians’ personal finances are starting to show their financial fragility.
According to the Office of the Superintendent of Bankruptcy Canada the total number of insolvencies (bankruptcies and proposals) in Canada increased by 22.7% in March 2021 compared to the previous month. Bankruptcies increased by 24.9% and proposals increased by 21.6%. This is the largest monthly increase in over a decade. This also happens to be the largest single month of new filing activity since the onset of the pandemic more than a year ago.
Is this the start of the free fall?
Debtors have mostly managed to keep their heads above water during the job loss and economic turmoil of the pandemic, artificially buoyed by government income support and lenders’ leniency allowing individuals to kick the inevitable can down the road.
Alberta saw the biggest increase in insolvencies, up 10.5% in the first quarter from last year, followed by British Columbia, up 7.2%, and Saskatchewan, 6.5%.