Insolvency Statistics in Canada — July 2011
The total number of insolvencies (bankruptcies and proposals) in Canada decreased by 17.4 percent in July 2011 from the previous month. Bankruptcies decreased by 18.0 percent, whereas proposals decreased by 16.1 percent. Over the past 10 years, there were two years when the total number of insolvencies filed in the month of July was higher than the total number filed in June.
The total number of insolvencies in July 2011 was 15.2 percent lower than the total number of insolvencies in July 2010. Consumer insolvencies have decreased by 15.0 percent, while business insolvencies have decreased by 20.8 percent.
For the 12-month period ending July 31, 2011, the total number of insolvencies decreased by 10.5 percent compared with the 12-month period ending July 31, 2010. It is worth noting that the total volume of insolvency still remains 14.1 percent higher than the 12-month period (October 2007 – September 2008) preceding the recession.
Consumer insolvencies for the 12-month period ending July 31, 2011, decreased by 10.3 percent compared with the 12-month period ending July 31, 2010. Consumer bankruptcies decreased by 18.1 percent, while consumer proposals increased by 9.4 percent. For the 12-month period ending July 31, 2011, 96.4 percent of total insolvencies were filed by consumers.
Business insolvencies for the 12-month period ending July 31, 2011, fell by 16.6 percent compared with the 12-month period ending July 31, 2010. A reduction in the number of insolvencies among the transportation and warehousing; construction; retail trade; and professional, scientific and technical services sectors largely contributed to this decrease.
The volume of business insolvencies in all Canadian industrial sectors, as defined by the North American Industry Classification System (NAICS), fell over the past five years despite the period of recession and economic downturn. In 2010, the three sectors that experienced the largest decline in filings were manufacturing (-195), retail trade (-194), and transportation and warehousing (-194). In 2010, 36 percent of all business insolvencies were filed in Ontario, second only to Quebec (40 percent).
In each year between 2006 and 2010, the construction sector had the largest number of insolvency filings among all NAICS sectors. During the same period, the construction sector also experienced the largest decline in insolvency filings from 1363 in 2006 to 863 in 2010. In 2010, Ontario alone accounted for about three quarters (75.7 percent) of the decline in insolvency filings in the construction sector.
The proportion of consumer insolvencies that were proposals was 34.5 percent for the 12-month period ending July 31, 2011, compared to 21.6 percent for the 12-month period ending September 30, 2009. This increase may be an indication that consumers are taking advantage of changes to the Bankruptcy and Insolvency Act (BIA). The changes, implemented on September 18, 2009, allow consumers more flexibility in filing proposals.
Four Companies’ Creditors Arrangement Act (CCAA) proceedings initiated in July 2011 were filed with the OSB. Please refer to the CCAA records for additional details. Note: The Insolvency Statistics in Canada – July 2011 Report, which pertains to bankruptcies and proposals filed under the BIA, does not include CCAA filings.
Read the report Insolvency Statistics in Canada – July 2011.
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