Nova Scotia consumer insolvencies up due to Alberta wildfire, oil industry: experts

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WATCH ABOVE: People in Nova Scotia are feeling the effects of Alberta's slumping oil prices and the devastating Fort McMurray wildfire, specifically when it comes to insolvencies. Global's Steve Silva has the statistics – Aug 12, 2016

The economically-suffering Alberta oil industry and this year’s wildfire in Fort McMurray have resulted in more consumer insolvencies filed in Nova Scotia this year, according to experts.

“It’s not all that surprising,” said Mark Rosen, senior vice-president of BDO Canada in Halifax.

According to the Office of the Superintendent of Bankruptcy Canada, between June 2014 and May 2015, there were 5,208 insolvencies filed in Nova Scotia; a year later, that number jumped to 5,497 in the same 12-month time period. That’s about a 5.5 per cent increase.

READ MORE: Insolvency filing spike in Nova Scotia ‘alarming’: expert

Rosen said he’s seen an increased number of filings from clients who work in Alberta.

“Most of them are young individuals, young males, who went out from Nova Scotia, primarily Cape Breton, went out to the oil patch to make money, and they were making excellent money out there,” he said.

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In May 2015 and May 2016, there were 414 and 573 consumer insolvencies filed, respectively; an increase of about 34.8 per cent.

“I don’t know that that trend will continue. There’s certainly an expectation that the situation in Alberta won’t correct itself until late 2017, and the economic impact of that may not be felt until early 2018,” said Rob Hunt, a partner at Grant Thornton.

READ MORE: Surviving the Slump: how to retire without debt

He said it’s important that people pay attention to early warning signs of financial insecurity and, should those signs arise, consult the right professionals. The process may cost money, but it can lead to long-term savings.

“Our recommendation for people is to deal with budgets, and to have a budget, and to think about what might happen if something should transpire in your life that would cause you to lose your source of income,” Hunt added.

Rosen said it’s important that people struggling seek the help of a financial professional because, while it may not be enjoyable, sometimes filing for bankruptcy, among other options, is necessary to move on.

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