Insolvency is becoming less of a problem among Canadian consumers and businesses but still hasn’t returned to pre-recession levels, says the federal agency in charge of bankruptcies.
Overall, insolvencies were down 11.5% last year compared with 2009 but still 20.6% higher than before the recession hit, according to the Office of the Superintendent of Bankruptcy Canada.
Insolvency is being unable to pay debts, while bankruptcy is a final, legal declaration that a person or a business cannot pay.
Businesses had the biggest reduction in insolvencies, seeing a 22.3% drop compared with 2009 as fewer companies in the manufacturing, retail, transportation, warehousing, accommodation, food services and construction sectors struggled.
Consumer insolvencies fell 11%, while bankruptcies fell 10.7% to 92,694. About 4,072 businesses filed for bankruptcy, a drop of 17.4%.
The office said more consumers filed proposals in an effort to settle their debts with creditors, likely due to changes in the law that allows more flexibility.
Ontario and Manitoba led the way in fewer insolvencies year over year, while Prince Edward Island actually saw more insolvencies than in 2009.
