Pandemic-era debt deferrals, government handouts and easy credit all worked to kick insolvency problems down the road. Now many are out of extend and pretend options.
Doug Hoyes, co-founder of Hoyes, Michalos & Associates, joins BNN Bloomberg to discuss the record number of consumer proposals in Canada. He says that the upward trend in insolvency is a continuation from before the pandemic and COVID-19 related debts only exacerbate the problem. Here is a direct video link.
See Consumer Insolvency Update, March 2023:
Canada-wide volumes were up 36.2% year-over-year and 27.6% higher than in February 2023. Year-over-year Ontario insolvencies increased by 31.6% and were 28.1% higher than in February.
The acceleration in consumer insolvencies is now reaching the higher end of our predicted overall growth of 20% to 30% for 2023. We would not be surprised to see insolvencies continue to grow at these, and possibly even higher rates in the coming months.
Homeowner insolvencies have now returned to pre-pandemic levels. Our Homeowners Bankruptcy Index was 3.9% in March 2023 and remains above 2022 levels.
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