Canadian bankruptcies registered their largest monthly drop on record in October, with declines among both consumers and businesses.
Bankruptcies tumbled 27.7 per cent in the month from September's levels, the Office of the Superintendent of Bankruptcy Canada said Tuesday. Part of the reason may stem from changes to federal bankruptcy laws, which made it more costly to file for personal bankruptcy, and caused a rush of filings before the Sept. 18 amendments.
Consumer bankruptcies, which have been soaring for much of this year, fell 28.4 per cent. Business bankruptcies fell 11.9 per cent from a month earlier.
The total number of insolvencies – which include bankruptcies and proposals – in Canada fell 19 per cent in October from the previous month, its largest monthly decrease in nearly two years. Proposals increased 15.4 per cent in the month.
“It was only the second time in the past 10 years where insolvencies filed in October were lower than in September,” the federal office said in its monthly report.
Insolvencies remain higher than they were a year ago. The total number of insolvencies in October was 7.3 per cent higher than the same month last year. Consumer insolvencies have increased 8.5 per cent in that period while business insolvencies have fallen 13.8 per cent.
The October increases in the number of consumer insolvencies were the lowest, year over year, since August of last year.
Total insolvencies have been climbing in the year through to October “entirely due to an increase in consumer insolvencies,” the report said.
Business insolvencies for the 12-month period ending in October are down 7.7 per cent compared with a year earlier. A drop in insolvencies in the construction, transportation and warehousing, agriculture and forestry, and retail trade sectors contributed to the decline.
