There has been an uptick in the number of Canadians becoming insolvent according to a report from CIBC. The mortgage lender says that although bankruptcies are down, by 4.7 per cent, there has been a 9 per cent rise in the number of proposals to creditors, which can now include debts up to $250,000 of non-mortgage debt. Insolvencies increased by 1.2 per cent in the six months to the end of February, the first rise since the recession.
There was a sharp rise in Manitoba and Saskatchewan, where rates of insolvency were up 11 per cent, and in Alberta they rose 6.5 per cent. In Ontario there was a 7 per cent decline. CIBC economist Benjamin Tal wrote that the cutbacks in the oil industry may well bring further increases in the months ahead especially in Alberta. There is also the spectre of higher interest rates with Tal noting that insolvencies could be moderately increased.
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