B.C. led the way in the sharpest decline in the number of business bankruptcies in 2010.
According to a report by CIBC World Markets, B.C. business bankruptcies fell 43.4% for the year ending October 31, 2010. That compares to the 26.6% average decline in business failures across Canada.
The declines broke records on several fronts. Only 3,500 firms went insolvent during the first 10 months of 2010, less than half the average number over the past 20 years. At an average of 3.4 bankruptcies per 1,000 businesses, 2010’s level was the lowest on record.
The 2008-2009 recession also marked the first downturn on record that saw the number of business bankruptcies fall during an economic contraction.
CIBC’s Benjamin Tal said the low bankruptcy rate will contribute to one of the strongest growth prospects following any recession on record. While revised employment figures from Statistics Canada suggests the country is still 30,000 jobs short of returning to pre-recession levels, it should only take a few more months to close the gap based on the current rate of job creation.
By comparison, Tal estimated it would take 55 months, or another four and a half years for U.S. employment to return to its pre-recession peak.