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Wednesday, November 8, 2023

Canadian business bankruptcies up >40%

More than 1,100 Canadian businesses filed for bankruptcy in the third quarter of 2023 (2023/3), up more than 40% from 2022/3, 

Business insolvencies in Canada up 42% | True North | Quinn Patrick: 


Closed businesses in Montreal, 2020. CTV News.

November 5, 2023 - "Canadian business insolvencies shot up by 41.8% in 2023 when compared to the third quarter of last year. 

"According to the Office of the Superintendent of Bankruptcy, a total of 1,120 businesses filed for bankruptcy, up 3.6% from the second quarter. 

"Those numbers far surpass the amount of bankruptcies filed before the pandemic. In the third quarter of 2019, for example, only 827 businesses filed for bankruptcy. 

"The Canadian Association of Insolvency and Restructuring Professionals (CAIRP) believes businesses are struggling to stay afloat due to a combination of economic challenges. Businesses no longer have support from government Covid-19 benefits, [while] record high interest rates, and a dip in consumer spending are all contributing factors. 

“'Many companies emerged out of the pandemic already over-leveraged and now they have the added pressures of higher borrowing costs, less access to capital, and high inflation leading to increased costs. It is inevitable that some will be significantly challenged, especially those in consumer-facing sectors,' said CAIRP chair André Bolduc in a press release. 

"Bolduc warns that the current insolvency estimates are conservative at best as many businesses will choose to close up shop and walk away without going through the insolvency process. 'The official statistics don’t reveal the full scale of serious indebtedness because many wait years before they consider legal debt-relief options,”'said Bolduc.... 

"In September, the Bank of Canada announced that it would retain its key interest rate at 5% until it sees the full effect of a stricter monetary policy permeate through the economy."

Read more: https://tnc.news/2023/11/05/business-insolvencies-up-42-2/

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