Impact of oil price drop a year ago still playing out in petroleum-producing provinces
TORONTO, July 8, 2016 /CNW/ - Licensed Insolvency Trustees (LIT) in Canada's petroleum-producing provinces are continuing to see sharp increases in consumer insolvencies, according to the Canadian Association of Insolvency and Restructuring Professionals (CAIRP).
The number of filings for bankruptcies and consumer proposals in Canada rose by 3.3 per cent in the 12 months ended April 30, statistics published recently by the Office of the Superintendent of Bankruptcy (OSB) show.
The national rise in insolvency was driven primarily by a dramatic jump in the number of bankruptcies and consumer proposals in Alberta, Saskatchewan, and Newfoundland and Labrador.
"There are thousands of Canadians affected by oil prices that bottomed out about a year ago, and trustees are seeing the impact of that," says Ian Schofield, CAIRP Board Secretary and a Saskatchewan Licensed Insolvency Trustee.
In Alberta, where the bulk of Canadian oil and gas is produced, the total number of consumer insolvencies filed in the 12 months ending April 30, 2016 rose 32.5 per cent compared to the same period a year before. In Saskatchewan, insolvencies were 22.5 per cent higher and Newfoundland and Labrador, which not only has its own oil and gas industry but is home to many workers who travel to the western provinces, saw a rise of 25.6 per cent.
"Loss of employment and insolvency are closely linked. When an industry that employs around 300,000 starts to downsize, layoffs are inevitable. Many people who are unable to find work for a prolonged period often find themselves without the means to make monthly payments," says Schofield.
"It takes time for the full impact of layoffs to be felt – that's why, a year after the drop in oil prices, we saw more than 11,000 people in Alberta enter insolvency proceedings, compared to just over 8,000 a year before."
CAIRP advises any Canadians who find themselves in serious financial difficulty due to the downturn to first visit a Licensed Insolvency Trustee to get thorough professional advice.
"We believe that the best option for Canadians in serious financial difficulty is to talk to a LIT," says CAIRP President and Chief Operating Officer Mark Yakabuski.
"They are professionals who can arrange for a stay of most creditor actions, and can provide Canadian consumers with advice on all of their debt repayment options."
CAIRP is the national association that represents nearly 1,500 Licensed Insolvency Trustees and associates. CAIRP is committed to providing consumers with better information about the options offered by Licensed Insolvency Trustees to assist consumers and businesses when they are insolvent, and to clearly distinguishing our members from unlicensed service providers.
Requests for interviews with CAIRP spokespersons can be arranged via the media contact below.
SOURCE Canadian Association of Insolvency and Restructuring Professionals (CAIRP)
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For further information: Andrew Flynn, Communications Manager, Canadian Association of Insolvency and Restructuring Professionals, 416-204-3242, ext. 3563, email@example.com