Insolvencies were on the rise in February, before the Covid-19 outbreak rocked the Canadian economy.
According to new data from the Office of the Superintendent of Bankruptcy Canada (OSB), the total number of insolvencies, which includes both bankruptcies and consumer proposals, rose by 2.1% in February compared with the previous month. Insolvencies were up by 9% from February 2019.
Bankruptcies increased by 0.9% month over month, and consumer proposals were up by 2.7%, the OSB said.
Year over year, consumer insolvencies increased by 9.2% in February, and business insolvencies rose by 1.9%.
For the 12-month period that ended Feb. 29, the total number of insolvencies was up by 9.9% compared with the 12 months to Feb. 28, 2019.
Consumer insolvencies were up by 10.1% in that period, driven by a 19% increase in consumer proposals. Business insolvencies rose by 3.1%.
“The three sectors that registered the biggest increase in the number of insolvencies were manufacturing; wholesale trade; as well as arts, entertainment and recreation,” the OSB said.
The economic impact of the Covid-19 pandemic started to emerge in the last week of February, so the data largely reflect prior activity.