FINANCE: Bankruptcies are up 47% over 2008

The recession continues to exact a heavy toll on financially strapped Canadians, sending 12,305 more individuals over the brink of bankruptcy in September.

The number has soared 47.4 per cent from a year ago and adds to a continuing series of high consumer bankruptcy levels since the downturn took the economy in its grip, according to a report from the Office of the Superintendent of Bankruptcy.

The near-term trend was also negative, with the number of consumer bankruptcies rising 29 per cent from the month before.

Companies have been largely exempt from the carnage, a trend that continued into September, as the number of business bankruptcies fell 0.4 per cent.

B.C. saw consumer bankruptcies rise 33.3 per cent to 1,109 between August and September. Business bankruptcies in the province rose 25 per cent to 30.

Across the nation, the wave of consumer bankruptcies has risen along with the number of Canadians shunted on to the unemployment lines, BMO Capital Markets economist Robert Kavcic said. Those "lagging indicators"rise even after the economy returns to growth, and as such, "there's more pain ahead," he warned.

As a share of the economy, the 12,000-plus new consumer bankruptcies are a mere sliver, Kavcic noted. "But at the margin [the rise] does have an impact on consumer confidence and spending."

The Office of the Superintendent of Bankruptcy also releases data on the broader category of "insolvencies" -- which includes bankruptcies as well as proposals to settle debt. On that basis, consumer filings rose 45.5 per cent to 15,465 in September from a year earlier, and were 28.5 per cent higher than in August when insolvencies totalled 12,033.

Ontario and Quebec continue to lead the country in consumer bankruptcies.

Consumer filings jumped in Ontario by an annual rate of 45.3 per cent in September, to 6,819. That's up 28.6 per cent from the 5,303 recorded a month earlier. Quebec had 4,120 insolvencies in September, a 32.3 per cent rise from 3,113 the same time last year, and up 29 per cent from 3,193 in August.

(prepared by John Morrissy/Financial Post/Vancouver Province)