Consumer insolvencies also rose significantly year-over-year.
The combination of higher taxes, surging prices, and Canada’s stagnant productivity continues to do significant damage to our economy.
As a result, many Canadian businesses and individuals are finding themselves insolvent.
According to a new report, the total number of business insolvencies in November of 2022 (the last month of reported data) was 37.8% higher overall year-over-year.
And even that number downplays it.
Compared to November of 2021, business insolvencies in November of 2022 rose by a whopping 58.3%.
Consumer insolvencies were also up by 9.5% compared to a year before.
A nation becoming poorer
Through population increases and money printing, governments are able to give the impression that an economy is ‘growing.’
But what really matters is whether the economy is growing on a per-person basis.
Is each person becoming more productive on average?
Are wages outpacing price increases?
In Canada, the answer to both questions is ‘no.’
And that’s why people feel like they are falling behind.
They are.
Month by month, Canadians are – on average – becoming poorer.
And so, our nation is becoming poorer.
In this environment, a surge in insolvencies is to be expected.
A moribund private sector
Given that a large portion of Canada’s GDP ‘growth’ is from government spending and government hiring, the situation facing the country is in fact more dire than it appears.
Government-led growth tends to be far less productive than private sector growth.
That’s because a growing private sector is responding to price signals and consumer demand, and is thus constantly adapting and improving. The private sector is also the realm of competition, which fuels a drive for efficiency and productivity.
Meanwhile, the public sector – while certainly necessary in some respects – faces no competition and is generally far less efficient and innovative.
So, public sector-led growth is neither sustainable nor desirable in the long-run.
If a country is relying on government expansion of the public sector for growth, then that is a signal that the real economy is in serious trouble.
Thus, a surge in insolvencies is sadly not a surprise.
Amid all of this, the Liberal government is still going ahead with tax hikes, which will reduce consumption and push investment elsewhere.
This is what people are talking about when they say Canada feels broken.
Not every problem in our economy was caused by the Liberal government, but their ongoing policies are actively making the situation worse rather than providing relief to Canadians.
More and more, the disastrous results of federal government economic policies are impossible to ignore.
Spencer Fernando
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