2023-09-22 00:45:34
Nearly 1,900 businesses in Quebec are affected by bankruptcy, which represents 1,000 more than in Ontario. Some businesses fail to repay loans when they are due, meaning they reluctantly close their businesses, a decision that is certainly heartbreaking.
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In Quebec, what explains the bankruptcy of businesses is the size of the businesses. The proportion of businesses turns out to be much smaller with few employees. “Who says smaller, says more fragile,” explains the president of Jean Fortin and Associate of the bankruptcy union, Pierre Fortin, appearing on the “8:30 p.m.” show on TVA Nouvelles.
Between January and July, more than 1,900 businesses closed their doors. The emergency loan could be the reason behind these bankruptcies. “The debt burden has become much too heavy, compared to the financial capacity of the company,” specifies Mr. Fortin.
The president notes that certain SMEs with average sales of $500,000 per year have even more difficulty repaying when they receive a loan. “The cost of labor is higher, the cost of borrowing, rents remain high,” he adds.
Will the situation get worse?
Pierre Fortin confirms that the “situation will probably get worse.” However, some slowdown is expected.
As for personal bankruptcies, the figures remain more positive. “There are 60% fewer personal bankruptcies than before the pandemic in Quebec,” he specifies.
For homeowners before the pandemic, they became “richer”, even though the mortgage rate increased by 40%.
Whereas for those who purchased during the pandemic, they are hit by the significant increase in their home value and mortgage payment.
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