Trust the Media?
These days it is extremely hard to trust the media to report news accurately and unambiguously. Most news outlets have an agenda and a tendency to repeat soundbites without backchecking. This behaviour is rife across all platforms, and consumers of news must be guarded against believing what is read or viewed – as grandmother used to say, “believe none of what you hear and only half of what you see”.
Recent media reports have indicated that Canadian insolvency rates are approaching or even surpassing the peak levels of 2009. This is simply not true, in either case. Let’s look at the data.
|Year||Population of Canada||Consumer Insolvencies||Percentage of Population Filing|
Note: * = Projected population data and estimated number of consumer insolvencies to equal the percentage of 2009 filers.
The data for 2016, with a population of 35,150,000 and insolvency filings at 129,727, suggests that numbers are actually running flat (same percentage of filers as 2019) based on the percent of the population filing a consumer insolvency. It is doubtful, based on current trends, that 2020 will see 171,000 consumers file insolvencies, but that is the number required, adjusted for population growth, to equal the percent of 2009 filers.
Consumer insolvencies are trending slightly upwards, that is true, year over year, but they are still not keeping pace with the increase in credit volumes. The Canadian Bankers Association have yet to release their statistics on credit cards for 2019 but it would be fair guess, based on year over year (2017-2018) data that Canadians used their credit cards for over $600 billion worth of purchases in 2019.