Albertans were happy to say, “Hasta la vista, baby,” to 2016. But while the economy wallowed in recession for a second straight year, we still managed to see the lowest rate of business bankruptcy in the country.
According to the Office of the Superintendent of Bankruptcy Canada, 127 Alberta businesses filed for bankruptcy last year, and another 47 filed proposals. A proposal is an offer to creditors to settle debts under conditions other than the existing terms and is often a precursor to bankruptcy.
In per capita terms, Alberta was the best performer among the provinces. Total bankruptcies and proposals numbered fewer than 40 per 100,000 people. Even British Columbia—the province with the strongest economy last year—saw a higher number. Bankruptcies and proposals in Quebec were by far the highest in the country at 264 per 100,000 people.
Alberta had the weakest economy, but the lowest business bankruptcies. Part of that could be explained by impaired businesses in Alberta refinancing debt to avoid the worst outcome. Troubled business operators may have also been able to find buyers, liquidate their businesses, and exit the market without a technical default.
While Alberta did see the fewest per capita, the rate of increase in the number of bankruptcies over the previous year was among the highest. Compared to 2015, bankruptcies and proposals spiked by 25 per cent last year—that was the second highest rate of increase in the country. Most provinces saw declines. So even though Alberta’s rate is low compared to the rest of the country, the recession still took a serious toll on business operators last year.