Consumer insolvencies
BC’s overall consumer insolvency rate9 declined by 6.3% in 2014, down to 3.0 per 1,000 adults. This indicator has seen steady declines since 2009,
which suggests a general improvement in the state of personal finances across most of the province. Lower unemployment rates, positive job
creation, and a historically low interest rate have all contributed to this improvement. In addition, the composition of the insolvency rate has
changed dramatically over the past five years, with the personal bankruptcy rate declining by 43.3% and the proposal rate10 growing by 85.7%.
The Kootenay and North Coast Development Regions experienced the biggest drops in 2014, with consumer insolvencies decreasing by 9.1%
and 8.3% respectively. The Thompson-Okanagan and Mainland/Southwest Development Regions were not far behind, with decreases of 8.1%
and 6.9% respectively. And despite its significant job losses in 2014, the Vancouver Island/Coast Development Region also experienced a decrease
in its insolvency rate, which dropped by 2.6%. There was no change in the Cariboo Development Region, but Nechako saw a substantial increase
of 15%.
Table 4: Annual Consumer Insolvency Rates per 1,000 Population Aged 18 Years and Older,
All Development Regions, 2009 to 2014
Percentage
change
Region
2009
2010
2011
2012
2013
2014
5-Year
2009-14
1-Year
2013-14
Cariboo
Kootenay
Mainland/Southwest
Nechako
North Coast
Northeast
Thompson-Okanagan
Vancouver Island/Coast
5.3
3.4
3.3
3.2
3.1
3.0
4.4
4.2
4.7
3.5
3.1
4.3
3.6
4.4
4.5
4.0
4.0
2.9
2.9
2.3
1.9
2.2
4.2
3.8
4.0
3.3
2.8
1.8
2.2
2.4
4.0
3.8
3.9
3.3
2.9
2.0
1.2
1.7
3.7
3.9
3.9
3.0
2.7
2.3
1.1
1.6
3.4
3.8
-26.4%
-11.8%
-18.2%
-28.1%
-64.5%
-46.7%
-22.7%
-9.5%
0.0%
-9.1%
-6.9%
15.0%
-8.3%
-5.9%
-8.1%
-2.6%
British Columbia
3.7
3.5
3.2
3.2
3.2
3.0
-18.9%
-6.3%
Source: Office of the Superintendent of Bankruptcy Canada and Statistics Canada.
*Insolvency rate calculations include both bankruptcies and proposals.
Outlook for 2015
BC is expected to enjoy a real GDP growth rate of 2.6% in 2015, due to a depreciating Canadian dollar and a strengthening US economy.11 Both
of these factors will attract foreign visitors, boost tourism, and encourage export activity. In addition, manufacturing is expected to continue
on an upward trajectory, and stalled investment in the Alberta oil sector will likely send workers to BC throughout 2015, thereby boosting
consumer spending in this province.
Overall, while capital investment in BC has slowed, our indicators show that BC remained a good place to live, work, and invest in 2014, and
that the prospects for 2015 are encouraging.
Full reports available online
Full versions of the CPABC Regional Check-Up reports are available at www.bccheckup.com. For more information about the reports, contact
Vivian Tse, manager of public affairs at [email protected].
Marlyn Chisholm is the principal of Chisholm Consulting and the lead economist on CPABC’s annual CPABC Check-Up report, a summary of which
will appear in the September/October 2015 issue of CPABC in Focus.
efined as the number of personal financial insolvencies per 1,000 adults.
D
9
consumer proposal is an alternative to bankruptcy whereby an indebted consumer negotiates to repay only a part of their debt. This allows
A
10
the debtor to keep their assets as long as they continue to make payments on any loan secured by those assets, such as a home mortgage.
D Economics, Provincial Economic Forecast, April 10, 2015. (www.td.com/document/PDF/economics/qef/ProvincialEconomicForecast_