Sask. insolvency spike directly linked to oil and gas downturn: financial adviser

A new report shows the number of Saskatchewan residents in a state of insolvency jumped by more than 40 per cent from November 2015 to 2016.

The numbers from the Office of the Superintendent of Bankruptcy Canada show a 42.5-per-cent increase in consumer insolvency in Saskatchewan for the month of November. It wasthe country's second-highest increase, behind only Newfoundland and Labrador.

Consumerinsolvency for the year ending November2016 also jumped, with an increase of36.4 per cent compared to the same period in 2015.

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Pamela Meger from bankruptcy service MNP Debt in Regina said the downturn in the oil industry was partly to blame.

"It kind of correlates directly with the oil and gas service right now, unfortunately, and we've seen this increase coming since about 2015 when the prices of oil did decrease so significantly," said Meger. "And we saw it come in waves."

Ripple effect of downturn

Meger added that although people planned for layoffs and emergencies, nobody had anticipated a two-year lull in the oil industry.

She said the downturn is now having a ripple effect on other industries such as hospitality, contributing to the current economic climate.

According to Meger, MNP Debt workers have been particularly busy in the Estevan and Weyburn areas in southeast Saskatchewan.

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She said every province has triggers and there were always bankruptcies in Saskatchewan, but the recent increase is significant.

Back to basics

Meger had some tips for Saskatchewan residents to help protect themselves financially.

She suggested taking advantage of government programs, such as employment income supplements for lower-income families.

Meger said it is also wise to go back to basics and start spending on needs instead of wants. That involves reining in spending and trying to maximize every dollar.

She also suggested people seek help as soon astheirfinancial situation starts to feel overwhelming.

"I hear a lot of, 'I wish I would have done this a year ago,'" she said.

"But again, the word [bankruptcy] itself is very scary.You feel you are going to lose everything, and in reality you get to keep quite a bit of stuff when you file bankruptcy in Saskatchewan."

She said seeking advice could help people avoid mistakes. Some people, for instance, cash in their RSPs to pay off debt, when Saskatchewan laws allow them to keep those funds if they filefor bankruptcy.