Canadian business insolvencies rise almost 42 per cent from last year

[CdnFox]

https://www.bnnbloomberg.ca/canadian-business-insolvencies-rise-almost-42-per-cent-from-last-year-1.1993675

Canadian business insolvencies were up 41.8 per cent from a year earlier in the third quarter, surpassing pre-pandemic levels. 

The Office of the Superintendent of Bankruptcy says 1,129 businesses filed for a bankruptcy or proposal in the third quarter, up 3.6 per cent from the second quarter.

That's compared with 827 filings in the third quarter of 2019.

Consumer insolvency filings were up 17.8 per cent from last year

 

There's some evidence already that this year may turn out to be even worse.

 

Here's the thing - Canada relies very heavily on small and medium sized businesses. As of 2021, small businesses employed 8.2 million individuals in Canada, or 67.7% of the total private labour force. By comparison, medium-sized businesses employed 2.5 million individuals (20.4% of the private labour force) and large businesses employed 1.4 million individuals (11.8% of the private labour force).

And when those small businesses collapse they take a lot of jobs with them that are not easily replaced.

Meanwhile immigration continues apace.

[herbie]

Look at the half empty glass why don't you? You're all for free enterprise, so they got hit with years of Covid, costs and debt.

Now's your chance to buy one of those businesses cheap and run it better without that burden. Or simply take over an abandoned market opportunity yourself from scratch. You adore a market economy and one of the basic principles is to make opportunity from someone elses misfortune.

They took the hit. No guarantees but you didn't.

[CdnFox]

5 minutes ago, herbie said:

Look at the half empty glass why don't you? You're all for free enterprise, so they got hit with years of Covid, costs and debt.

Years? How long did you think covid went on for?
 

Quote

Now's your chance to buy one of those businesses cheap and run it better without that burden.

But people won't. Why would anyone invest in canada right now? So the businesses don't get bought, They'll just vanish. Which means fewer jobs. And the remaining companies will tend to jack their prices.

So the economy slows down inflation goes up quality of life nosedives.

[Perspektiv]

3 hours ago, CdnFox said:

Meanwhile immigration continues apace.

Technically, a significant amount of immigrants, contribute to those small businesses.

My wife is from the Philippines, and is an entrepreneur through and through.

She is absolutely fearless in taking massive leaps of faith, and we work as I tend to think of the details she overlooked. She is just bold. Something you tend to see quite a bit, from someone who had to leave their countries due to a lack of opportunity.

Stopping immigration doesn't fix this issue.

Stop putting so many barriers towards small businesses. 

We have businesses in the Philippines, being run for us.

It's so much harder to start one in Canada. So much regulation. Salaries are through the roof. A significant portion of the workforce doesn't want to work anymore. Wants more money. More incentives.

Trudeaus policies are hollowing out his middle class, and make profit so much harder.

From increases in theft, to the simple costs of operating, explosions in salary demands and the like.

I have personally hired newcomers to Canada. They have been some of my best employees.

Immigration isn't the issue.

Allowing too many, and bringing in refugees that may not contribute to your economy, at rates that you just cannot afford.

Its not about closing doors, in my opinion. Someone knocks at your door, you assess who it is, before letting them in.

[herbie]

4 minutes ago, CdnFox said:

Years? How long did you think covid went on for?

 

4 minutes ago, CdnFox said:

Why would anyone invest in canada right now?

For a so called free enterpriser you show a total ignorance about business. You seem to think it's there to make jobs for you. Do you actually think WalMart "is in business to save you money"?

Your 2nd remark is not only dumb, it's traitorous.

[herbie]

6 minutes ago, Perspektiv said:

My wife is from the Philippines, and is an entrepreneur through and through.

As is my stepson's wife. She sews and makes outfits and sells them to the movie industry in Vancouver & Hollywood. Makes way more than I did owning a retail shop.
Like the Syrian guy and his chocolate business.
The Ukranian woman who took over a diner here and unlike thed 3 previous owners has the brains to be open at supper time because that's when customers will spend more.
The Korean guy that bought a failed cafe in the next town and opened a fantastic, profitable sushi place because there was none within 100 miles.
The guy from China who services networks in 2 towns here cuz we got old and retired.
The East Indian guy who took the risk there too and turned a failed Ricky's slop shop into a Tandoori place for the same reason.

See anything here? It's the immigrants that will take the risks and do the work and not our sons and daughters.

To make money. For themselves. Not waiting and whining for hand me down "hourly job jobs" from someone else.

 

[Michael Hardner]

24 minutes ago, Perspektiv said:

Technically, a significant amount of immigrants, contribute to those small businesses.

I was interested in your response because you are a business owner (I think?).

It's strange to me that Ontario has encouraged high-end "craft brewers" that are more expensive, more small scale at the price of the big operators ... but hasn't done that for other businesses.

Why do you think that is ?

I'm asking because I have zero clue as to why certain businesses are encouraged to be small, niche etc. and others are steamrollered by giants like Rogers, Bell, Amazon, Facebook and so on.

[ExFlyer]

How many of those going bankrupt are cannabis shops? In my area there were dozens and now it is down to only a few.

How many are restaurants? With the hike in prices and the tips suggestions being up to 20%, going out for dinner is less and less for most people.

How many of those are Mom and Pop shops that cannot compete with bigger stores?

While the headline is dramatic, the bottom line is there are hundreds and hundreds of bankruptcies and insolvencies every year. This year will be even more considering many businesses will have to pay back all the government loans (unless justin gives them all clemency to get votes)

[CdnFox]

40 minutes ago, Perspektiv said:

Technically, a significant amount of immigrants, contribute to those small businesses.

My wife is from the Philippines, and is an entrepreneur through and through.

It's quite true that immigrants often START businesses and that the failure of these small businesses is a problem,

But - i was more alluding to the fact that the smaller businesses is often a source of income for the new immigrant. They're more likely to give someone without an extensive track record a chance, they're often the ones with the more entry level jobs that immigrants can use to build a work history, they're often immigrants themselves (as you note) and more sympathetic or perhaps culturally similar so they can relate more.

So when those small businesses die - and yet immigration continues - we run into a problem. Lots of newer people who are going to have a tougher time getting started in the workplace in Canada.

Combined with inflation this often leads to frustration and anger and that's not what you want your immigrant population to be feeling.

[CdnFox]

Just now, ExFlyer said:

How many of those going bankrupt are cannabis shops? In my area there were dozens and now it is down to only a few.

How many are restaurants? With the hike in prices and the tips suggestions being up to 20%, going out for dinner is less and less for most people.

How many of those are Mom and Pop shops that cannot compete with bigger stores?

 

Doesn't matter.  They're jobs that are vanishing.

Quote

While the headline is dramatic, the bottom line is there are hundreds and hundreds of bankruptcies and insolvencies every year. This year will be even more considering many businesses will have to pay back all the government loans (unless justin gives them all clemency to get votes)

Nice attempt to blow it off - but that's just silly. The numbers are increasing, and reaching fairly historical highs, and saying "oh well there's always some" is trite and pedantic. 

If this trend continues it'll have a massive impact on our economy and "well i didn't like that buisness anyway" doesn't make it any better.

 

 

 

[ExFlyer]

36 minutes ago, CdnFox said:

Doesn't matter.  They're jobs that are vanishing.

Nice attempt to blow it off - but that's just silly. The numbers are increasing, and reaching fairly historical highs, and saying "oh well there's always some" is trite and pedantic. 

If this trend continues it'll have a massive impact on our economy and "well i didn't like that buisness anyway" doesn't make it any better.

 

 

 

Yup, jobs are being lost.. it is what is is.

Blowing nothing off.

Increased bankruptcies because no one is patronizing those places. Period.

Cannot pay your bills because no one uses your business, is they way it is.

I suspect many are insolvent because they know the upcoming government loans are coming due so they bail out now.

Can't compete, out you go.

 

[Michael Hardner]

12 minutes ago, ExFlyer said:

 

1. I suspect many are insolvent because they know the upcoming government loans are coming due so they bail out now.

2. Can't compete, out you go.

 

1. I heard that from my accountant.  She's seeing it all over.

2. There's no consumer spending for a huge part of the economy.  Buy everything from Amazon, Walmart or Costco.

[ExFlyer]

9 minutes ago, Michael Hardner said:

1. I heard that from my accountant.  She's seeing it all over.

2. There's no consumer spending for a huge part of the economy.  Buy everything from Amazon, Walmart or Costco.

Yes that is for sure. There are a dozen delivery trucks on my street every day.

I am also quite sure restaurants are going under as well. In my area there have been a dozen or more, even big chain places ( Montana's gone, Dunns gone, Earls gone, Joeys gone,)

[CdnFox]

56 minutes ago, ExFlyer said:

Yup, jobs are being lost.. it is what is is.

Blowing nothing off.

Increased bankruptcies because no one is patronizing those places. Period.

Cannot pay your bills because no one uses your business, is they way it is.

I suspect many are insolvent because they know the upcoming government loans are coming due so they bail out now.

Can't compete, out you go.

 

Sure - and every now and again there's a 'purge' where the weak businesses lose out and that's healthy for our companies from time to time.

But we need to look at it as part of the larger picture. With our situation the way it is,  that's a very bad sign for the economy.  We are losing jobs and businesses at a time when we're importing people at a record pace and our debt servicing is through the roof and we're already taxed to the max.

You are kind of blowing this off - that is the recipe for long term economic weakness, much like the stagflation we saw in the 80's. That's not just "oh well a few businesses went under'.

[herbie]

Try living somewhere that the MoneyMart went tits up!
Loan sharks go broke...

at one point two hookers were out by the gaas pumps underbidding each other.....

waited out competition with a fancier shop and accredited employees cuz their overhead was a killer and I was training local kids with grant money and much lower rent. Bought all their entire stock for $900 as he would've lost money to pack and haul it away.

bugged my cousin to move her cappuccino shop up here, they'd just built a new University and no one else sold that there. She could've charges a dollar more than on Hastings St. and customers would be grateful to get it. But of course UNBC was too far, too cold, not a place for convertibles, couldn't go see Mick Jagger perform in Depends for $200 or haunt the malls in Bellingham... She eventually gave up trying to market by selling for a dime less than the other 5 shops on the block.

I'll tell you again that you live in the best country on Earth with limitless opportunities. You just have to adapt

[CdnFox]

7 minutes ago, herbie said:

Try living somewhere that the MoneyMart went tits up!
Loan sharks go broke...

Is there such a place? During these times i expect they're all booming

Quote

at one point two hookers were out by the gaas pumps underbidding each other.....

The jokes write themselves     you really should be more careful about what you say

 

Quote

waited out competition with a fancier shop and accredited employees cuz their overhead was a killer and I was training local kids with grant money and much lower rent. Bought all their entire stock for $900 as he would've lost money to pack and haul it away.

Was this before or after you tripled your home value with your credit card? (LOL - thought i'd forgot didn't you)

 

Quote

bugged my cousin to move her cappuccino shop up here, they'd just built a new University and no one else sold that there. She could've charges a dollar more than on Hastings St. and customers would be grateful to get it. But of course UNBC was too far, too cold, not a place for convertibles, couldn't go see Mick Jagger perform in Depends for $200 or haunt the malls in Bellingham...

I feel like you wandered off topic there towards the end...

Quote

I'll tell you again that you live in the best country on Earth with limitless opportunities. You just have to adapt

You b*tch about this country incessantly.

And we don't live in the best country on earth these days by far.  You can get by. You can survive.  but most other major countries have better qualitiy of life than we do. ANd it's getting worse - i'll be fine and likely you will too (as long as you have your magic credit card) but the kids today are going to live a lower quality of life and it's hard to get around that.

[Perspektiv]

11 hours ago, CdnFox said:

Combined with inflation this often leads to frustration and anger and that's not what you want your immigrant population to be feeling.

I have spoken to quite a few newcomers, and the cost if living, is often cited as the main hurdle some just weren't prepared for.

I have seen a few immigrant business owners be forced to sell their business, or close their business.

The issues seem to be the same, all the time. Citing the strain the massive cost increases have done to their business.

Or if you consider one of my favorite restaurants in my city that serves Taiwanese food, they have a prime location downtown, but have been hit by vandals seeking cash for drugs.

Another immigrant business owner nearby, has been hit by so many shoplifters, the have had to hire multiple security guards, along with putting dozens more CCTV cameras.

All of which they likely weren't prepared for, as the latter were added later, meaning likely adding massive strain to their bottom line.

Vehicular thefts are through the roof. I know someone who runs a few car rental branches, who haven't had cars stolen in a while (they invested in clubs for their steering wheels), but worse. Their big ticket vehicles, have had their transmissions cut out, due to the precious metals that can be found in them.

Very reason I wouldn't buy a push button start car. Its like I want to make it easier for thieves to take my car.

All these unforeseen pressures, is enough to put many small businesses out of business. Many are clinging by a thread.

I don't blame those here, choosing to leave in droves.

[Perspektiv]

11 hours ago, herbie said:

See anything here? It's the immigrants that will take the risks and do the work and not our sons and daughters.

Exactly. 

I love my nieces and nephews to death like they were my own kids, but hearing kids like my eldest niece talk, reinforces your point.

She refused to work, unless she made my salary, or better.

She didn't understand my college education, vs her still being in high school. My heavy handed experience. Management experience. She knew what she was worth, and wasn't going to work for a penny less.

This is a common sentiment I see in youth. The high entitlement to salary levels which don't come close to reflecting their lack of experience, or skills.

Many immigrants who are newcomers, are more than happy to fill that void and give their all.

Of course and mercifully,  not all youth are like this, but its a growing trend am seeing as an employer. IE interviewing a youth, and having the most demanding and arrogant person across the desk from me demanding to see our credentials. Our safety measures. Me being humble enough to comply, not humbling them--making them more demanding (from asking if mental health days are tolerated, to demanding more money than what range was listed on the add with no experience), and then having the nerve to call to ask if they were selected or not o_O

I will take a humble immigrant and deal with the slight headache of their lack of knowledge of our standards, and just bring them up to speed if needed, vs most youth, any day of the week.

They aren't the issue.

Politicizing immigration to virtue signal, and overwhelming our systems, is.

[Perspektiv]

12 hours ago, Michael Hardner said:

Why do you think that is ?

I honestly couldn't tell you why.

All I know from the business owners I talk to, is that seems like you are either struggling, or are in the right business, and a thriving, when I consider the many small and medium business owners that I regularly talk to.

I know a materials business owner, who increased his business 400%. 

Many people can't afford contractors, so DIY purchases, are skyrocketing for him  to the tune of him no longer needing to close his business during the winter months. This is not normal for his industry.

Nothing is normal anymore. You just roll with the punches.

All I can see is many small businesses struggling, and seemingly hung out to dry by our government.

12 hours ago, Michael Hardner said:

I'm asking because I have zero clue as to why certain businesses are encouraged to be small

I would be equally curious to finding out why. I couldn't tell you why other than assuming and speculating from my vantage point.

Knowing why, would be better.

[Michael Hardner]

27 minutes ago, Perspektiv said:

1. All I know from the business owners I talk to, is that seems like you are either struggling, or are in the right business, and a thriving, when I consider the many small and medium business owners that I regularly talk to.

2. Many people can't afford contractors, so DIY purchases, are skyrocketing for him  to the tune of him no longer needing to close his business during the winter months. This is not normal for his industry.

3. Nothing is normal anymore. You just roll with the punches. All I can see is many small businesses struggling, and seemingly hung out to dry by our government. I would be equally curious to finding out why. I couldn't tell yo u why other than assuming and speculating from my vantage point. Knowing why, would be better.

1. There are fewer and fewer "right businesses" though, when you think of it.  The effects of an aging population, immigration and tech are macroeconomic tidal waves with one-time impacts that are devastating us.  How many entire sectors were wiped out or are at risk ?  And the money goes offshore to tech behemoths ?  Facebook does not pay taxes in Canada.  Is that right ?  Now, I consulted for advertising companies in the period where Facebook was rising and they were decimated.  Who's paying attention to this ?

Amazon, yes THAT Amazon - the one that has laid waste to innumerable mom & pop stores in Canada - pays $430 MILLION in taxes.  Practically nothing.  https://www.theglobeandmail.com/business/article-amazon-canadian-taxes-disclose/

This is why I have spoken about the massive problems facing Poilievre and how a new approach is needed because an open economic system does not work when you have tech behemoths literally owning you buying household goods, or controlling your conversations with your family.

All the profits go offshore, while a handful of tech people make money but sometimes only to get the services up and running.  

The governments have responded by subsidizing things that they hope will go big, like electric vehicles, and of course making the housing industry into what it has become.  This is why they don't want to kill it... it's a big business.  

And a populace that has never paid attention to economics outside of prices, crises and things that are immediately obvious is understandably confused.  What happened to the economy, they ask ?  

[ExFlyer]

2 hours ago, Michael Hardner said:

1. There are fewer and fewer "right businesses" though, when you think of it.  The effects of an aging population, immigration and tech are macroeconomic tidal waves with one-time impacts that are devastating us.  How many entire sectors were wiped out or are at risk ?  And the money goes offshore to tech behemoths ?  Facebook does not pay taxes in Canada.  Is that right ?  Now, I consulted for advertising companies in the period where Facebook was rising and they were decimated.  Who's paying attention to this ?

Amazon, yes THAT Amazon - the one that has laid waste to innumerable mom & pop stores in Canada - pays $430 MILLION in taxes.  Practically nothing.  https://www.theglobeandmail.com/business/article-amazon-canadian-taxes-disclose/

This is why I have spoken about the massive problems facing Poilievre and how a new approach is needed because an open economic system does not work when you have tech behemoths literally owning you buying household goods, or controlling your conversations with your family.

All the profits go offshore, while a handful of tech people make money but sometimes only to get the services up and running.  

The governments have responded by subsidizing things that they hope will go big, like electric vehicles, and of course making the housing industry into what it has become.  This is why they don't want to kill it... it's a big business.  

And a populace that has never paid attention to economics outside of prices, crises and things that are immediately obvious is understandably confused.  What happened to the economy, they ask ?  

Most of the manufacturers of products we buy every day do not pay taxes in Canada either.

Amazon is like every big (and smart small) company in Canada, pays as little taxes as they legally can.

The populace has always gone to where they can get the best price for their products and services.

Cdnfux can cry we are "blowing it off" but the fact is, if you can not compete and sell cheaper, you will go under.

 

[Michael Hardner]

12 minutes ago, ExFlyer said:

1. Most of the manufacturers of products we buy every day do not pay taxes in Canada either.

2. Amazon is like every big (and smart small) company in Canada, pays as little taxes as they legally can.

3. The populace has always gone to where they can get the best price for their products and services.

4. Cdnfux can cry we are "blowing it off" but the fact is, if you can not compete and sell cheaper, you will go under.

 

1. Ok but we have reciprocity in trade with the US, and agreements which are mostly mutual beneficial.  Not so much in tech media.  There is no Canadian Facebook, Twitter, Uber, Air BnB or Amazon for example.  We do have local companies that have been decimated by these monopolistic behemoths.
2. Agreed.
3. Obviously.
4. Governments tend to get involved in such cases.

[ExFlyer]

11 minutes ago, Michael Hardner said:

1. Ok but we have reciprocity in trade with the US, and agreements which are mostly mutual beneficial.  Not so much in tech media.  There is no Canadian Facebook, Twitter, Uber, Air BnB or Amazon for example.  We do have local companies that have been decimated by these monopolistic behemoths.
2. Agreed.
3. Obviously.
4. Governments tend to get involved in such cases.

1. Bottom line, if you cannot sell to the Canadian public cheaper, they will not buy from you and away you go. I also use restaurants as businesses going under...folks are not going to pay the prices to go out and then asked to tip 20% on top.

2.

3. So obvious that business go under.... is anyone surprised?? No.

4. Yes, governments have bailed out businesses for a long time but now, they are wanting to be repaid and the business quit and go under because the owners want to get out with as much as they can.

[Michael Hardner]

45 minutes ago, ExFlyer said:

1. Bottom line, if you cannot sell to the Canadian public cheaper, they will not buy from you and away you go. I also use restaurants as businesses going under...folks are not going to pay the prices to go out and then asked to tip 20% on top.

1. Ok but as I said it's not business as usual with big tech monopolizing certain sectors.

[CdnFox]

2 hours ago, ExFlyer said:

Most of the manufacturers of products we buy every day do not pay taxes in Canada either.

Amazon is like every big (and smart small) company in Canada, pays as little taxes as they legally can.

The populace has always gone to where they can get the best price for their products and services.

Cdnfux can cry we are "blowing it off" but the fact is, if you can not compete and sell cheaper, you will go under.

 

LOL - awww are you still butthurt?

You're wrong of course.  Only someone devoid of business experience would think "competing" means offering the lowest price.  No wonder you were a failure at air force procurement.

There are a lot of ways that smaller businesses can better satisfy a customer's needs than a larger one and more ways than price point.  Talent for example.  If it were all about price supercuts would be the only hair styling place out there but because people tend to find a stylist they like and are willing to pay for it the 'cookie cutter' approach doesn't work.

Lots of industries require trust, and that's not something that you can just 'sell for less money'. People will pay a premium for flexibility in many cases.

Smaller businesses tend to be more flexible and have less overhead as well. I've seen a few plumber start ups for example, guy goes on his own with a few clients working out of his basement with maybe 2 or 3 employees - that guy will have an advantage over the bigger name companies.

There's a reaosn smaller businesses makes up the vast lion's share of our economy. The most jobs and most money by far it's not even close.

But - They are more vulnerable to inflationary issues..  That plumber i mentioned and others like him are going to seriously be hurt by the increase we're about to have on gas prices for example. And they buy stuff for big jobs on credit - they buy their vehicle on credit, etc so when rates go up it really clobbers them more than the big guys.

Small businesses are also less easily adapted as a rule - if changes require new gear or reworking of the business they may not have the funds or the knowledge to make that happen right away.

 

So yeah - you're blowing it off.  It shows an ingorance of business to simply say 'if you can't sell cheap you can't compete"

The problem is - The job of the federal gov't isn't to create jobs but it IS to create a fertile environment where business can grow. They have done the opposite. remember when trudeau called small business owners "tax cheats"?  He's passed a number of laws which hurt them disproportionally,  and his current policies make it worse. 

This is a real problem for Canada right now. And instead of leading to more competative and stronger business which most tough times tend to it's going to lead to a general weakening of our economy and a slower recovery.