Bankruptcies in Canada have fallen to the lowest rate on record, according to a report released Thursday by the Canadian Imperial Bank of Commerce, providing substantial evidence that the country's economy is gathering strength as the government prepares to end stimulus spending by year's end.
The private sector averaged 3.4 bankruptcies per 1,000 businesses last year - the lowest rate since before the organization began collecting data in 1980.
In the first 10 months of the year, Canadian businesses declared a total of 3,500 bankruptcies - 26 percent lower than the previous year.
"The situation is definitely different than any other recession, and it's definitely different than the situation in the U.S.," said CIBC World Markets senior economist Benjamin Tal in the report. "We just went through what was supposed to be the mother of all recessions. Not only is (the bankruptcy rate) low, but it is also falling."
Tal pointed out that the relatively swift cuts in spending and hiring that Canadian companies began making in the wake of the downturn has paid off and is the ultimate reason for the lower bankruptcy rates.
