撸奶社区

Skip to content

B.C. insolvencies highest in more than three years

Trend is the similar across Canada
bankruptcygetty2
A man works on his finances

Higher interest rates appear to be having an effect on British Columbians' finances, according to new data from the Office of the Superintendent of Bankruptcy. 

The province saw 974 insolvencies in November, more than in any month since October 2019, when there were 1,077 insolvencies – the federal government office said this morning. The number includes consumer and business insolvencies.

Insolvency is a financial state where someone cannot meet debt payments on time. It can lead to bankruptcy, which is a legal process that happens when someone declares that he or she can no longer pay back debts to creditors.

The insolvency data, however, includes bankruptcies as well as consumer proposals, which are settlement agreements that creditors have agreed to, explained Michelle Statz, a licensed insolvency trustee at Bromwich+Smith.

She told BIV that she has seen the trend of higher insolvencies in her practice.

The years-high number of B.C. insolvencies in November followed the Bank of Canada hiking its policy interest rate to 3.75 per cent, up from 0.25 per cent in March. The Bank of Canada has since increased its policy interest rate a further 0.5 percentage points, to 4.25 per cent.

Financial institutions often provide loans at rates that are in a range of about two per cent higher than the Bank of Canada's policy interest rate. 

Realtors have told BIV that the interest-rate hikes have wreaked havoc on homeowners' finances, particularly those who have variable-interest-rate mortgages that change when interest rates do. 

"If you've got a three-bedroom property in Vancouver or North Vancouver, your minimum cost would be $1.5 million," Oakwyn Realty realtor .

"You've probably got a $1 million mortgage. Your monthly payments are probably up about $2,400 or $2,500 [compared with the start of the year.] That's a lot of money. I don't know many people who have $2,500 per month of disposable income after tax."

Bankruptcies in B.C. have also been creeping up. 

The province had 185 consumer and business bankruptcies in November 2022, which is the highest number in a month since September 2021, which also had 185. The last time that there were more bankruptcies in B.C. was July 2021, when there were 192.

The trend is the same across Canada.

The country had 9,784 insolvencies in November, which is more than any month since March 2020, when when governments started putting into effect COVID-19 restrictions that closed a wide range of enterprises. In March 2020, there were 11,198 consumer and business insolvencies across Canada. 

[email protected]

 

push icon
Be the first to read breaking stories. Enable push notifications on your device. Disable anytime.
No thanks