Bankruptcies Down For Now

This may be the calm before the storm.

The number of bankruptcies in this province is down. The latest figures are from September and they are down significantly, a development that may come as a surprise given all the financial pressures generated by the COVID lockdown. Lost jobs, businesses closing and so on would, at first blush, seem to be a reason for more, not fewer, insolvencies. Yet, personal bankruptcies were more than 40-percent lower than at the same time a year earlier and business failures declined by nearly 70-percent.

But it was all the government programs – CERB and payment deferrals – that not only stemmed the tide of insolvencies, they reversed them.

However, a report by the economics unit at ScotiaBank warns that we may see yet another reversal – one where the number of bankruptcies goes up – following the end of some of these support programs. Back in March, the numbers fell because the offices handling insolvency applications were closed and by the time they re-opened support programs offered some relief. But with some programs coming to an end, they expect the numbers to begin trending upward.