Businessman hand showing financial report on table

The insolvency business took a big hit in April along with the rest of the economy, according to the latest statistics from the Office of the Superintendent of Bankruptcy Canada (OSB).

The OSB reported that the total number of insolvency filings (including both bankruptcies and consumer proposals) plunged by 38.7% in April compared to the previous month. Bankruptcies fell by 41.5% and proposals declined by 37.2%.

Of course, the drop in filings came at a time when much of the economy was in lockdown, lenders were granting forbearance to troubled borrowers and governments were providing emergency assistance to struggling households and businesses and pushing back tax deadlines.

Notwithstanding the huge falloff in insolvency filing activity in April, the OSB reported that the total number of insolvencies in the 12-month period ended April 30 increased by 3.5% compared with the same period a year ago.

Consumer insolvencies were up 3.9% for the year ended April 30, led by a 12.7% increase in consumer proposals. Business insolvencies were down by 8.0% over the same period.

In April, five companies filed for bankruptcy protection under the Companies’ Creditors Arrangement Act (CCAA), the OSB noted.

That activity picked up in May, with 10 companies filing for CCAA protection, including major retailers Reitmans (Canada) Ltd. and Aldo Group Inc., and cannabis company Green Growth Brands Inc.