The number of Albertans filing for consumer insolvency has increased by 15 per cent in the first quarter of 2019.
The rate of insolvencies in Calgary has reached the highest level since the late 1990s, according to federal statistics.In a city still struggling from a downturn in the energy industry and from major changes in that sector, insolvencies among Calgary adults in 2018 were filed by 4.3 people per thousand — the highest level since 1997 when the number sat at 4.8, according to figures supplied by the Office of the Superintendent of Bankruptcy Canada.The national average in 2018 was also 4.3 per thousand people.Since the downturn hit in late 2014, those numbers have only gotten worse, with 443 insolvencies recorded in the city last March compared to 225 about five years ago, said Donna Carson, a licensed insolvency trustee with MNP Ltd.“That number has gone up by 10 per cent, year over year,” said Carson, whose company helps those struggling with debt get back on the right fiscal track.“I have never seen it this high.”Much the same trend can be seen throughout the province, she said.In 2004, there was an average of 990 insolvencies a month in all of Alberta, a number that’s grown to 1,455 this year.There’s a widening variety of people claiming insolvency, said Carson.“It is so many different walks of life — students who can’t find work, workers who have lost hours or been laid off,” she said. “We’re now seeing more owners of different businesses. It’s not just the oil and gas industry that’s affected, it’s what (is) impacted by its problems.”
A national survey conducted by Ipsos for MNP showed 32 per cent of Albertans lack confidence that they’d be able to handle an unexpected expense, such as a car repair, and at 45 per cent, are least optimistic among Canadians in their ability to cope with a loss of employment.When debts come due, Albertans, at 48 per cent, were also the least likely to have the cash to cover them, while 44 per cent say they owe more in debt than they’re worth.“A lot of people who are severely indebted are unable to make any kind of meaningful reduction in their principal debt and, in fact, continue to take on more, especially if they encounter unexpected expenses,” said Carson.A bright spot for Albertans compared to other Canadians is that more of those finding themselves insolvent make proposals to dig themselves out of the situations before heading into bankruptcy, she said.“People do have some assets and with equity, we can restructure their debt,” she added.Last month, StatsCan reported Calgary’s unemployment rate was 7.6 per cent, the highest among Canada’s larger cities.Last March, an Equifax Canada report tagged Alberta with the highest non-mortgage personal debt level in Canada, at an average of $23,520 in late 2018, a figure that had increased by 4.1 per cent from a year before.BKaufmann@postmedia.comon Twitter: @BillKaufmannjrn