As indicated in Snapshot 15, consumer bankruptcies were up by an unprecedented 34.6% year over year in first-quarter 2009. In comparison, they increased by just 2.9% year over year in first-quarter 2008.

In British Columbia, consumer bankruptcies rose by 58.8% in first-quarter 2009, the largest increase in the country. The smallest increase was in Newfoundland, where consumer bankruptcies were up 27.2%.

In contrast, business bankruptcies for the country as a whole have continued to trend lower in 2009, as they have done since early 1996. This news comes despite eroding investor confidence, tighter credit conditions and precipitous declines in corporate profits,

In first-quarter 2009, business bankruptcies were down 13.8% year over year. In fact, seven of the 10 provinces saw significant reductions in the business bankruptcy rate.

In Manitoba, business bankruptcies declined by 68.6% in first-quarter 2009, the largest drop in the country. The smallest decline was in Newfoundland, where business bankruptcies were down 1.1%.

From an industrial perspective, the number of reported bankruptcies declined on a year-over-year basis in all but four major industries: mining and oil and gas extraction (+80%); real estate and rental and leasing (+37.5%); arts, entertainment and recreation (+37%); and finance and insurance (+3.8%).

In line with the pattern of overall business bankruptcies, the number of bankruptcies in the construction industry was down by 7% year over year in the first quarter. This figure marks the industry's largest year-over-year drop since first-quarter 2008.

Looking forward, although consumer bankruptcies will probably remain high into the second half of the year, their rate of increase should slow as economic conditions strengthen.

Bankruptcies in Canada: Consumer, Business and Construction

Data source: Statistics Canada, Office of the Superintendent of Bankruptcy.
Chart: Reed Construction Data — CanaData.