November 24, 2019

Surge in number of Canadians who can’t pay their debts has economists worried — and scratching their heads

Nearly 2,000 Canadian consumers filed for insolvency in September, a 19 percent increase from a year ago. This represents a potentially worrying development for the nation’s household debt landscape. Economics professor Stephen Gordon calls the data “perplexing” given the favorable economic landscape. Indeed, other data related to household debt – such as mortgage arrears – is more positive. Others have pointed out that the number insolvency filings is low as a proportion of the entire Canadian workforce (0.06%). Nonetheless, if next month’s insolvency data shows a worsening trend, that could be a troubling sign.

“While the increases are coming from low levels, the trend is a worrying development that suggests cracks are starting to appear in Canada’s household debt landscape.”

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