Consumer insolvencies
BC’s overall consumer insolvency rate held steady between 2014 and 2015, at three out of every 1,000 adults (aged 18 and older); still, this rate is
63.9% lower than in 2010 (see Table 4). Personal bankruptcies in BC and across North America increased after the global economic recession in
2009, but lower lending rates, improved economic conditions, and prudent consumer borrowing practices have helped improve the long-term
trend in personal indebtedness.
The composition of consumer insolvency has also changed. Over the past five years, the share of personal bankruptcies in BC has declined,
dropping from 76% of all insolvencies to 49%, while the share of consumer proposals15 has risen accordingly.16
The Nechako and Thompson-Okanagan development regions were the only ones to see a decline in consumer insolvency rates last year, dropping
by 29.2% and 2.9%, respectively. Southwest BC and Vancouver Island/Coast saw no changes in this indicator, but the Kootenay and Cariboo development regions experienced increases, with rates going up by 3.3% and 7.7%, respectively. The greatest spikes, however, occurred in the North
Coast Development Region, which increased by 18.2%, and in the Northeast, which increased by 29.4%; these increases demonstrate the impact
of a slowing resource industry on our economy.
Table 4: Annual Consumer Insolvency Rates* per 1,000 Adults (Aged 18 Years and Older),
All Development Regions, 2010 to 2015
Percentage
change
Region
2010 2011 2012 2013 2014 2015 5-Year 1-Year
2010-15
2014-15
Cariboo
Kootenay
Mainland/Southwest
Nechako
North Coast
Northeast
Thompson-Okanagan
Vancouver Island/Coast
4.7 4.0 4.0 3.9 3.9 4.2 -10.6% 7.7%
3.5 2.9 3.3 3.3 3.0 3.1 -11.4% 3.3%
3.1 2.9 2.8 2.9 2.7 2.7
-12.9%
0.0%
4.3
2.3
1.8
2.0
2.4
1.7 -60.5% -29.2%
3.6
1.9
2.2
1.2
1.1
1.3
-63.9%
18.2%
4.4 2.2
2.4
1.7
1.7
2.2 -50.0% 29.4%
4.5 4.2 4.0 3.7 3.4 3.3 -26.7% -2.9%
4.0 3.8 3.8 3.9 3.8 3.8 -5.0%
0.0%
British Columbia
3.5 3.2 3.2 3.2 3.0 3.0
-14.3%
0.0%
Sources: Office of the Superintendent of Bankruptcy Canada and Statistics Canada.
*Insolvency rate calculations include both bankruptcies and proposals.
The forecast for 2016
Given the strong connection between the Canadian dollar and the price of petroleum, any significant change in the global oil market—or in the
political state of our biggest trading partner, the US—could have a significant impact on BC’s future prospects. However, with optimistic expectations for the housing market, a comparatively diverse economy, and the trading advantage conferred by a weakened Canadian dollar, BC is
well positioned to continue building on the successes seen in 2015.
Detailed reports available online
Full versions of the CPABC Regional Check-Up reports are available at bccheckup.com. For more information about the reports, contact Vivian
Tse, public affairs specialist, at [email protected].
Marlyn Chisholm is the principal of Chisholm Consulting and the lead economist on CPABC’s annual BC Check-Up report, a summary of which
will appear in the November/December 2016 issue of CPABC in Focus.
A consumer proposal is an alternative to personal bankruptcy that enables indebted consumers to negotiate to keep their assets while repaying
15
part of their debt.
Office of the Superintendent of Bankruptcy Canada and Statistics Canada. Data not included in Table 4.
16
20 CPABC in Focus • July/August 2016