About 1,900 businesses in Quebec were affected by bankruptcy, 1,000 more than in Ontario. Some businesses fail to repay loans when they are due, which means they reluctantly close their businesses, which is definitely a heartbreaking decision.
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In Quebec, the size of the businesses is explained by the bankruptcy of the businesses. The proportion of businesses with few employees becomes very small. Jean Fortin and Pierre Fortin, associate president of Bankruptcy Union, appeared on TVA Nouvelles’ “8:30 p.m.” show, explained, “Whoever says less, says more fragile.”
Between January and July, more than 1,900 businesses closed their doors. Emergency debt can be the reason behind this bankruptcy. “The debt burden has become too heavy compared to the financial capacity of the company,” said Mr. Fortin stated.
The president noted that certain SMEs with average sales of $500,000 a year have more difficulty repaying a loan. “Labor costs are high, borrowing costs are high, rents are high,” he says.
Will the situation get worse?
“The situation will probably get worse,” confirmed Pierre Fortin. However, some slowdown is expected.
As for personal bankruptcies, the figures are more positive. “Quebec has 60% fewer personal bankruptcies than the pandemic,” he noted.
For pre-pandemic homeowners, they got “richer” even as mortgage rates rose 40%.
But for those who bought during the pandemic, they could be hit by a significant increase in their home value and mortgage payment.