Greater Vancouver is seeing insolvencies climb, not unlike the rest of Canada. Office of the Superintendent of Bankruptcy (OSB) filings show insolvencies increased in February. While the increase was in the double digits, the city managed a slower increase than the province as a whole.
Greater Vancouver Insolvencies Rise Over 10%
Greater Vancouver insolvencies are climbing by double digits these days. The region saw 401 insolvency filings in February, up 10.77% from last year. A breakdown of that number shows consumers represent 392 of those filings, up 9.50% from last year. Businesses represent the remaining 9 filings, up 125% from last year. To contrast, while this number is high – it’s lower than the average 13.4% growth for the province of BC.
Greater Vancouver Insolvency Filings
The number of insolvency filings made in February 2020, for both Greater Vancouver and B.C.
Source: OSB, Better Dwelling.
Consumer Liabilities In Filings Rise Over 4%
Greater Vancouver’s climbing consumer insolvencies helped push total liabilities higher. Households reported a total of $47.52 million in liabilities in February filings, up 56.55% from last year. The average liability per filer works out to $121,247, up 42.97% from last year. In other words, Greater Vancouver consumers have a lot more debt at the time of their insolvency.
Businesses Are Seeking Protection From Creditors Earlier
Greater Vancouver business insolvencies actually saw liabilities fall from last year. The total of liabilities in this segment came in at just $2.09 million in February, down 80.66% from last year. The average amount per insolvent filer works out to $232,576, down 91.41% from last year. It’s only a few businesses, but a lot fewer liabilities pushed them to insolvency.
Greater Vancouver Insolvency Growth
The percent change for insolvency filings made in February 2020, compared to a year before.
Source: OSB, Better Dwelling.
Rising insolvencies is a broad trend across Canada, and has been for the past year. The city (and province) overall have a low rate of insolvency, but numbers are climbing. It’s worth remembering the climb in these numbers is before the pandemic was declared.
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Interesting to see how small the number of filings are in contrast to Toronto. I’m guessing a lot of this has to do with home equity buying more time.
You do realize Greater Toronto has 3x the population of Greater Vancouver?
Watch this number explode higher when Vancouver has to hike everyone’s property taxes, against falling home values.
Why would property taxes “explode higher”?
City is “at risk of bankruptcy” but won’t go bankrupt… if they can only make one change.
https://vancouversun.com/news/covid-19-city-of-vancouver-at-risk-of-bankruptcy-says-mayor/
City’s cannot file for bankruptcy. And they are funded by the property taxes that the landlords and home owners have to pay. This is their biggest source of income and if the property owners are not able to pay because of loss of employment and or no business income due to the shutdown. Then the City has to increase the property taxes for those who are able to still pay.
This is how City’s eventually collaspe due to population migratio n due to high taxes, it is happening down south in various states such as Illinois, California and several others. People are leaving the states and moving to other places where their is no income taxes such as Washington, Texas, Florida etc.
Instead of reducing their expenditures to try and balance their budgets just like any other business has to do in order to survive during slowdowns in the economy. But instead the Municipality’s just want to maintain their highly paid low productivity unionized workforce and their massive pension contributions which take precedence over every other expense.
They will get bailed out by the Federal government at the expense of the tax payers…