Canadians May Feel the Pinch, But Bankruptcies Are Actually on the Decline

Consumer insolvencies are rising at the sharpest rate since mid-2016, according to a report by CIBC Capital Markets breaking down delinquencies across various types of credit, Yahoo! Finance reported. Benjamin Tal, the bank’s deputy chief economist, found the portion of Canadians who find themselves unable to meet their financial obligations is climbing 4.5 per cent on a year-over-year basis. “It is reasonable to expect that the recent interest rate hikes by the Bank of Canada will lead to further moderate increases in the insolvency rate, as the negative impact of increased debt financing costs offset any positives on the unemployment front,” Tal wrote in the report on Wednesday. The CIBC report comes on the heels of an Ipsos poll released on Monday by MNP Ltd. that found 46 per cent of respondents come within $200 of insolvency every month.  Thirty-nine per cent said rising interest rates could move them towards bankruptcy, a five point increase since September. The math seems simple. Many Canadians have a lot of debt. The Bank of Canada makes it tougher to service that debt. Indebted Canadians feel the pinch. Read more