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.