August 7, 2020 by David Gambrill
Canadian construction and real estate development companies appear to be hurting the most during the pandemic, according to bankruptcy records kept by the federal government.
Twenty-seven Canadian companies have been granted creditor protection since the novel coronavirus was declared a pandemic in March, according to the online records of the Office of the Superintendent of Bankruptcy Canada (OSBC). The federal government department administers the Companies’ Creditors Arrangement Act (CCAA), a law allowing insolvent corporations that owe their creditors in excess of $5 million to restructure their business and financial affairs.
Among the 27 companies that have been granted creditor protection under the CCAA, nine companies are connected with the construction and real estate development sectors, including The Clover on Yonge, a prominent residential real estate development located in downtown Toronto.
Six of those nine are construction companies or companies that produce construction equipment (cranes) or accessories such as gravel or cement. (ENTREC Crane Solutions, JMB Crushing, Baldr Construction Management Inc., Roberts Company Canada, Constructions Louisbourg, Simard-Beaudry Construction.)
Those in the P&C sector are keeping an eye out on commercial bankruptcies. Commercial specialty insurance brokers have told Canadian Underwriter in a forthcoming edition that bankruptcies will sometimes trigger claims against directors and officers in publicly traded companies, or errors and omissions claims, depending upon how the company executives executed their business continuity plans during the pandemic. These sources were speaking generally and not about any particular bankruptcy actions, nor were they speaking in the context of this article.
Looking at OSBC data, companies in a wide variety of businesses classes make up the bulk of the 27 companies granted bankruptcy protection thus far.
Four retail clothing chains made the list, including Reitman’s, The Aldo Store, Bootlegger Clothing, and Laura’s Shoppe.
Two companies came from the mining/jewellery sectors — including Korrite, which produces ammolite jewellery, and northern Silica Corporation (Mining).
In the energy sector, CeQuence Energy and Bow River Energy each were granted bankruptcy protection.
Two cannabis companies also appeared on the list (Believe Cannabis Corp and Green Growth Brands)
A wide variety of other business classes are represented on the list, including the entertainment sector (Cirque du Soleil), online travel, hospitality, a pulp producer, a media company (NewsWest in Calgary), a Christian charity, a gift and kitchenware store, a tea store and a wireless internet store.
Feature image courtesy of iStock.ca