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Northern Ontario has seen its share of high-profile insolvency cases with Validus Power in 2023, Pure Gold Mining in 2022 and Laurentian University, and Harte Gold in 2021. The final outcomes in court often did nothing to improve the fortunes of shareholders and unsecured creditors in the supply and service economies.
In its newsletter, Insolvency Insider polled professionals in the insolvency field about the volatility and high volume of activity in 2023. Rising interest rates and a slowing economy pushed many companies into restructuring proceedings.
Insolvency Insider posted a summary of the 250 insolvency filings in 2023, sorted by filing type, industry, location, trustee and counsel. Real estate led the way among all industries with 38 filings. Manufacturing had 27 filings with cannabis at 18.
By province, Ontario had 122 filings mentioned, with 41 in Alberta, 35 in British Columbia, and 31 in Quebec.
It shows a wide variety of struggles across many sectors, including retail, print media, mining, energy, construction, transportation, and the technology sectors due to competition, higher taxation, shareholder disputes, disposable income, overseas supply chain issues, among other factors.
Experts polled predict, more or less, insolvency activity will persist in 2024 with some optimism expressed that a lesson has been learned and better corporate and financial fundamentals will emerge.
In a reader poll, 53.7 per cent of respondents expect more than 60 CCAA filings across Canada in 2024.
"So many potential negative variables," replied one reader. "Wars, shipping disruptions, interest rate resets, U.S. elections, government deficits, insurance costs, climate, and the lists goes on."
Others think there will be casualties among those businesses started during and after the pandemic. New and increased taxation make for a tough environment for businesses to operate in.
"Public media and government policy have created a toxic environment for the real estate market and other industries," was another comment.
