More People Are Going Broke in Canada as Interest Rates Rise

An increasing number of Canadians can’t meet their financial obligations, another sign rising borrowing costs are taking a toll on household balance sheets, Bloomberg News reported. The number of consumers seeking debt relief jumped 5.1 percent to 11,320 in November from a year earlier, the Ottawa-based Office of the Superintendent of Bankruptcy reported on Jan. 4. October and November combined saw 22,961 consumer insolvency filings, the most for those two months since at least 2011. It’s a worrying sign for an economy that has relied so heavily on consumer spending and the housing market to drive growth. The Bank of Canada has lifted its key lending rate five times since mid-2017. Policy makers, who meet this week to determine their next move, are closely monitoring the impact of higher borrowing costs on the economy. “We’re seeing a bump, and in some provinces that bump is significant,” David Lewis, a board member at the Canadian Association of Insolvency and Restructuring Professionals, said by phone from Edmonton. Read more

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