826 businesses filed for insolvency in Q3.
There has been a surge in Canadian business, but not a good one.
The number of businesses going bankrupt in Canada jumped by 4.1% in the third quarter of the year. There was a 5.9% increase in companies filing proposals to pay part of the debt they owed. In September alone, the number of bankruptcies/proposals surged by 17.5%.
It’s the biggest jump in insolvency filings in six years.
Alberta, Manitoba, and Quebec saw the biggest increases of business going bankrupt.
According to BNN Bloomberg, the sectors with the biggest increase in bankruptcies were manufacturing, construction, retail trade, and transportation.
Insolvencies had been declining on a long-term trend since around 2012, so the reversal is quite a concern. It also comes at at time when debt repayment costs for Canadian households (the most indebted in the world), are rising as interest rates go up. The negative impact of taxes also can’t be ignored, as rising taxes are taking another bite out of consumers pockets, which also hurts businesses.
And on top of all that, there is an investment collapse, as investors turn to other countries instead of investing in Canadian businesses.
All of that adds up, and we’re seeing the consequences.
Welcome to the Trudeau economy.
Photo – YouTube