OTTAWA – The rise in interest rates seems to have adverse consequences on the finances of Canadians, because the total number of insolvencies filed under the bankruptcy and insolvency act has increased from 5.2 percent in November compared to the same month of the previous year.
According to the Office of the superintendent of bankruptcy, the number of insolvencies of consumers increased by 5.1 percent, while the number of insolvencies of firms increased 8.9 percent.
The Bank of Canada raised its key rate director five times since the summer of 2017.
The number of insolvencies decreased by 2.5 percent in November compared with October, the number of bankruptcies fell by 8.2 per cent and the proposals increased by 2.1 percent.
During the period of 12 months ending on 30 November, the number of bankruptcies and proposals has increased by 2.0 percent. The consumer bankruptcies decreased by 5.0 per cent and the proposals have increased by 8.4 percent. The deposits of insolvencies of consumers accounted for 97.2 percent of the total cases.
For their part, the insolvencies of businesses declined by 0.6 per cent. The sector of mining and oil and gas and manufacturing have experienced the most significant decline in the number of insolvencies, while groups of the construction and retail have experienced the greatest increases.
The number of insolvencies has increased in November, compared to the same period of the previous year in all provinces except Nova Scotia. In Newfoundland and Labrador, they have increased by 11 per cent, followed by Alberta with an increase of 8.3 percent. In Quebec and Ontario, the increases have been less than one per cent.