Alberta Insolvencies On The Rise

Alberta insolvencies on the rise
Job losses blamed for provincial spike

By Mario Toneguzzi
For the Calgary Herald
April 14, 2010

Insolvencies, which include bankruptcies and proposals for them, are on the rise in Alberta compared with a year ago — a trend at odds with what's happening in the rest of the country.

The total number of insolvencies in the province increased by 8.9 per cent in January from December and by 9.1 per cent from the year before.

In Canada, insolvencies fell by 6.7 per cent from December and by 2.7 per cent on a year-over-year basis.

“Compared to where we were six, nine months ago, things are still looking pretty good,” said Dan Sumner, economist with ATB Financial in Calgary.

As to why Alberta is moving in the opposite direction to the rest of Canada, he said, “The labour markets here have been a little bit slower to pick up.”

“We've been seeing pretty strong gains in employment nationally and not much provincially. And then last month we saw unemployment bop back up there to 7.5 per cent.”

According to Alberta Employment and Immigration, the province's unemployment rate in March jumped to 7.5 per cent from 6.9 per cent in February and 6.1 per cent in March 2009. Calgary's unemployment rate in March was 7.2 per cent, up from 7.1 per cent the previous month and 5.8 per cent a year ago.

The province's unemployment rate was the highest since 1996 and Alberta is the only province with an employment decline since July 2009.

Nationally, the unemployment rate in March remain unchanged at 8.2 per cent.

According to statistics released Monday by the Office of the Superintendent of Bankruptcy, there were 711 bankruptcies filed in January, a decrease of 3.3 per cent from January 2009, and there were 233 proposals for bankruptcy, which was up 79.2 per cent from a year ago.

Insolvencies filed by consumers in January in the province were 907 for an increase of 10.2 per cent from last year. That included 684 bankruptcies, down by 1.7 per cent, and 223 proposals, up by 75.6 per cent.

Insolvencies filed by businesses in January in Alberta were 37, down from 42 last year. That consisted of 27 bankruptcies, a decrease from 39 in January 2009, and 10 proposals, up from three last year.

At the national level, total insolvencies filed in January hit 10,480, down 2.7 per cent from January 2009. Bankruptcies, at 7,352, were down 12.4 per cent, while proposals, at 3,128, were up by 31.3 per cent.