Published On: Mon, Aug 1st, 2016

Alberta’s recession hitting home for unemployed workers


Alberta's recession hitting home for unemployed workers

At the beginning of the year, Spencer Bownes and his wife each had a steady job as they cared for their two children, aged seven and four, at their Evergreen home.

Just seven months later, the family home is on the edge of foreclosure and their banks have called in their debts.

Even after handing out countless resumes, Bownes hasn’t found work after he was laid off from Husky Energy in February.

“We’re going to be renting a house in the interim,” said Bownes, a human resources professional who didn’t get any severance because his position was considered temporary.

“It could be 10 years before we fix our credit. We’re just taking it one day at a time. We’re trying to rebuild in this new world.”

Alberta’s recession is dragging rising numbers of consumers like Bownes into the throes of financial ruin.

In May, the province posted 1,150 personal insolvencies — cases where people couldn’t pay their debts — which marked a 37% increase over the same month a year ago, according to the Office of the Superintendent of Bankruptcy Canada.

About 670 Albertans were in the same position as Bownes: creditors forced them into an arrangement called a consumer proposal, where a trustee oversees repayment of a percentage of their debt.

“Unless numbers for employment change, we’re going to see more filings and more difficulties with individuals right now,” said Vicky Samuels, an insolvency trustee with MNP Debt.

Samuels said she’s seeing greater numbers of Albertans looking for a way out of their insurmountable debt.

The oil and gas industry has been a major source of her clients throughout the recession, but she also also seen unemployed restaurant workers and cab drivers suffering the trickle-down effects of tighter consumer spending.

Reduced worker pay in Alberta is expected to be another driver behind personal bankruptcies in the coming months, according to MNP Debt.

Average weekly earnings in the province slid to $1,150 in May, still the highest among the provinces but 4% lower than what they were a year earlier, according to Statistics Canada.

Alberta is also struggling through a period of high unemployment. Its jobless rate last month, 7.9%, was the highest among all provinces west of Atlantic Canada.

Nationally, personal insolvencies rose by 11% in May compared to the same month a year earlier, hitting 11,400 cases, while 338 businesses became insolvent, a 9% jump from a year earlier.

In Alberta, 10 business insolvencies were reported, a slight drop from 12 posted in May 2015. These numbers don’t include companies forced into creditor protection.

The Credit Counselling Society, which provides bankruptcy assistance and other financial help, has seen a 25% increase in the number of Alberta clients it helped so far this year, compared to the same period in 2015.

News Source Calgary Sun

About the Author

Syed Ammar Alavi

- is Lahore (Pakistan) based journalist & writer with 25-year experience in print, wire and broadcast forms of journalism. His major fields of interest are politics, film,tv,sports, climate change and technology