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Business Briefing

Albertans going broke in ever-greater numbers Add to ...

Oil shock bites deep

The oil shock is taking an ever-greater toll on Albertans.

As unemployment spikes in the province, so, too do consumer insolvencies, as the latest numbers from the Office of the Superintendent of Bankruptcy Canada show.

“Alberta has witnessed a clear increase in the number of consumer insolvency filings in recent months, now pushing the highest in about five years,” said BMO Nesbitt Burns senior economist Robert Kavcic.

Insolvencies come in two forms: All-out bankruptcy, or what is known as a proposal, which is an offer to creditors to change the terms of repayment.

In Alberta, home to Canada’s oil industry, the number of filings climbed by almost 15 per cent in the 12 months ending last October, rising to 9,516 from 8,287 in the previous 12-month period, the latest numbers show.

Bankruptcies rose 4.4 per cent, and proposals almost 25 per cent.

In October alone, insolvencies surged 27 per cent from a year earlier, with bankruptcies up 9.6 per cent and proposals up almost 44 per cent.

“Note that insolvencies are still running well shy of levels experienced during the Great Recession, but with the jobless rate moving quickly toward 2009 levels, more Alberta consumers (who also carry more debt relative to income than other provinces) could run into trouble this year,” Mr. Kavcic said.

“Note also that regions of Canada not negatively impacted by lower oil prices (especially B.C. and Ontario) are seeing stability on this front.”

The gun club

It’s fascinating to look at the U.S. arms industry and President Barack Obama’s attempts to curb gun violence.

The President unveiled new measures in an emotional presentation today.

Just yesterday, meanwhile, Smith & Wesson boosted its outlook for the year. And today, its shares are surging.

The U.S. gun maker now expects annual revenue of between $650-million (U.S.) and $660-million, with earnings per share of $1.21 to $1.26.

That compares to its earlier forecasts of up to $635-million and $1.16 a share.

It also boosted the outlook for its third-quarter results.

“The company indicated that the sell-through rate of its products at distribution has been stronger than originally anticipated, resulting in reduced distributor inventories of its firearms,” Smith & Wesson said.

“The company added that Adjusted National Instant Criminal Background Check System (NICS) data for the month of December, which serves as an indicator of consumer purchases, reflected strong growth versus December 2014.”

Shares of Sturm Ruger also climbed sharply.

TV warnings

Major changes to the television industry are set to roll out later this year, but a new study warns that rules designed to unbundle large cable and satellite packages could cause nearly 7,000 job losses and take away about $400-million (Canadian) in funding for Canadian programs.

The 100-page report by consulting firm Nordicity and broadcasting consultant Peter Miller was commissioned by unions and advocacy groups representing creators and producers in the TV sector, The Globe and Mail’s James Bradshaw reports today.

The findings suggest the pain felt by an industry already under pressure from online video will be exacerbated by the new rules, chasing hundreds of millions of dollars in annual revenue out of the TV ecosystem.

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