Bankruptcies in Alberta up almost 10% in 2018

The number of Albertans who filed for insolvency rose in 2018, though corporate bankruptcies in the oil and gas sector declined significantly.

According to the Office of the Superintendent of Bankruptcy, 14,700 Albertans declared personal insolvency last year, a nearly 10 per cent increase from the year before.

The uptick can be attributed to the province’s unemployment rate, which remains elevated compared with pre-recession levels, as well as rising interest rates, said David Lewis, an Alberta-based board member of the Canadian Association of Insolvency and Restructuring Professionals.

“And those people who are going back to work are not necessarily getting paid the same amount as they were before,” Lewis said.

However, he said another reason for the decrease in 2018 may be that companies and their creditors were waiting on a crucial Supreme Court decision.

Last month, in a 5-2 decision, the Court sided with the Alberta Energy Regulator and the provincial government, ruling that the trustee for bankrupt Redwater Energy has the responsibility to pay the environmental cleanup costs for inactive oil and gas wells.

“Either the companies or their main creditors may have been holding off on doing anything, because until a decision on Redwater was made on whether you had to do a cleanup or not, it made a big difference on what they may receive as a payout,” Lewis said.