Alberta insolvency rate jumps 34% as upward trend continues

Consumer insolvencies in Alberta were up more than 34 per cent in 2016 over the previous year, according to the latest figures from the Office of the Superintendent of Bankruptcy Canada.

In 2015, 9,810 consumers filed for insolvency while 13,170 did so in 2016.

The agency's report for 2016 showed that personal bankruptcies were up about 26.8 per cent, while consumer proposals — a legally binding process, administered by a trustee, where debtors make an offer to creditors to pay back a percentage of what is owed — increased by 40 per cent over 2015.

Consumer insolvencies increased in both Edmonton and Calgary, the report showed.

In Edmonton, there was a 40.5-per cent spike in insolvencies from 2,913 in 2015 to 4,093 in 2016. That included 37.1 per cent more bankruptcies and 43.3 per cent more proposals.

In Calgary, insolvencies rose from 3,695 in 2015 to 4,746 in 2016 — a 28.4-per cent increase that broke down as 13.9 per cent more bankruptcies and 38.2 per cent more proposals.

Businesses also feeling the pinch

Business insolvencies also rose in Alberta between 2015 and 2016, from 134 to 168 — a 25.4 per cent increase.

The report said 27.4 per cent more businesses declared bankruptcy and 20.5 per cent more filed proposals.

In the business category, Calgary saw the biggest jump in insolvency rates in Alberta, with a 52.7-per cent increase overall — including 108.3 per cent more proposals and 37.2 per cent more bankruptcies.

Province-wide, retail businesses saw a 300-per cent spike in insolvency rates from 2015 to 216 and mining and oil and gas extraction companies saw a 48 per cent rise.

The insolvency rates in Alberta have been well above the national average since the start of the economic downturn brought on by the collapse in oil prices, but the increases posted in Friday's report are more modest than a year ago.

Sectors that showed evidence of an economic rebound included manufacturing, which saw 25 per cent fewer insolvencies, construction, where insolvencies were down by 10.8 per cent, and the real estate and rental sector, which saw 40 per cent fewer insolvencies.

Consumer confidence up nationally, depressed in Alberta

In another report released Friday, the Conference Board of Canada says while national consumer confidence is up this month, Alberta's index is still well below what it was before oil prices crashed

"Consumer sentiment remains depressed in Canada's energy-producing regions," the board said in a release.

On a positive note, the board says Alberta did see wage increases last month, and a greater share of Albertans feel that their household finances have improved in the last six months.

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