Canadian Electrical Wholesaler

Jan 18, 2021

InsolvencyThe year 2020 was filled with surprises. One of them was business solvency.

Insolvencies were down by almost one-third year over year during the early stages of the COVID-19 pandemic and were relatively stable in the third quarter. At the height of this century’s previous economic shocks, insolvencies rose by 10% or more. A new study looks at insolvencies during the largest economic upheaval of our lifetime.

Historically, insolvencies increase during economic downturns

The financial crisis of 2008 had an immediate impact on the number of insolvencies in Canada.* Insolvencies rose 11.3% in the fourth quarter of 2008 and reached a record high of 816 in the first quarter of 2009.

The 2014 oil crash also had a major economic impact on the Canadian economy, particularly in the oil patch. Oil prices (Western Canadian Select) fell from US$83 in July 2014 to US$37 in February 2015, and this affected businesses in oil and gas extraction and supporting industries. This was reflected in the number of insolvencies, which increased by one-quarter to 779 from the third to the fourth quarter of 2014.

Insolvencies buck the trend during the early stages of the pandemic

The pandemic has posed significant challenges to the Canadian economy and the financial position of enterprises. The second quarter of 2020 saw the steepest decline in real gross domestic product (-11.3%) since quarterly data were first collected in 1961. Over the same period, businesses reported lower net income before taxes (-8.6%) and operating revenues (-13.1%).

Despite the economic headwinds caused by the pandemic, insolvencies fell by almost one-third (-29.4%) year over year to 474 in the second quarter. This decline came at a time when many businesses were closed for a month or longer, and those that remained open faced a new and often more costly business reality. In the third quarter of 2020, the number of insolvencies was unchanged at 474, down 13.8% year over year.

Insolvencies were down in most industries in the second quarter, led by the construction industry (-32.1%, or -45). According to the Survey on the Canada Emergency Business Account, the construction industry had the largest share (14.1%) of loan approvals among industries in April and May through the Canada Emergency Business Account.

Most businesses that filed for insolvency in 2020 were already in trouble prior to the pandemic

The study also looks at the average quick and debt-to-equity ratios for businesses that filed for insolvency during the first three quarters of 2020 to better understand the financial position of these businesses.

The study suggests that businesses that filed for insolvency in 2020 were already in a precarious financial situation before the COVID-19 pandemic. Even with the help of government programs, these corporations decided to file for insolvency.

However, the fact that the number of insolvencies has decreased since the onset of the pandemic could indicate that businesses are waiting to see whether more government aid will be forthcoming and whether they will be able to manage their debt levels before filing for insolvency. Low borrowing costs for businesses could also partially explain this drop.

According to the Canadian Survey on Business Conditions, over two-fifths (43.9%) of businesses reported that they were unable to take on more debt in the third quarter. This suggests that insolvencies may increase in the coming quarters as the financial position of businesses deteriorates.

Source: Statistics Canada,

Photo by Melinda Gimpel Text  on Unsplash

* This article examines the changes in the number of businesses that filed under the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act from 2006 to the third quarter of 2020. The analysis highlights the number of firms filing for creditor protection, as well as the financial position of these firms before the onset of the pandemic. While this article focuses on smaller businesses filing under the Bankruptcy and Insolvency Act, the study on which it is based also looks at large corporations that filed under the Companies’ Creditors Arrangement Act.

Carol McGloganBy Carol McGlogan

EFC kicked off 2021 with an outstanding webinar featuring Janice Gross Stein, renowned Canadian political scientist, founder of the Munk School of Global Affairs and recipient of the Order of Canada. Ms. Stein has spoken at previous EFC conferences, earning many accolades, and this session was no different as we learned what to look for as the Biden Administration takes hold of the White House.

Our close economic ties to the U.S. means that Canadians must “keep up with the Administrations” to survive. Janice focused her discussions on industrial policy and climate change within an active intervening government.

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Canadian Business Counts - December 2020The COVID-19 pandemic continues to alter the business landscape. Some businesses have closed permanently, some have grown and others have been temporarily closing or reopening. In October, for example, the number of business openings (41,910) exceeded the number of business closures (32,420) for the fourth consecutive month.

As a result, the number of active businesses in October edged up 0.6%. Despite the slight increase, the number of active businesses was down 6.7% from February 2020.*

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David GordonBy David Gordon

Gene Biben, formerly President and CEO of Biben Sales, joined Channel Marketing Group earlier this month. Gene’s avowed desire is to “give back” to the industry, to help people work together. He will help reps achieve their goals and manufacturers optimize their performance, and relationship, to and with manufacturer reps. He’ll additionally support Channel Marketing Group clients’ research needs.

While Gene is well known by many manufacturers, we thought it would be interesting to ask him to consider changes he has seen over the years.

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Darci SpiteriBy Darci Spiteri 

This past month marked one year since stepping onto a job site and starting my electrical apprenticeship. Little did I know 2020 would throw in some curveballs, but it was a pretty fantastic year for self-development when I sit back and reflect. 

Enter Pandemic, worldwide lockdowns, and my Jobsite shutting down for a month. Losing hours was a downside and with my apprenticeship being based on the number of hours worked, moving onto my second year will take a little extra time. 



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Changing Scene

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Kerith Richards will serve as Regional Sales Manager based out of Service Wire’s corporate headquarters, where she will be responsible for commercial and industrial sales in all provinces. In addition, Richards will continue her role as Sales Representative for Saskatoon, Manitoba, Ontario, Quebec, Nova Scotia, New Brunswick, Newfoundland and Labrador. 



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Guillevin International Acquires Wesco's Canadian Datacom BusinessGuillevin International has announced the creation of a new division, Guillevin Datacom, which will be dedicated exclusively to various network infrastructure products. To support this new division and ensure its success, Guillevin acquires the Canadian Datacom business of WESCO International, whose team will join Guillevin's Canadian operations.

"We have targeted the WESCO business to launch our Datacom division because of the team's agility, expertise and in-depth knowledge of products from the industry's leading suppliers", said Luc Rodier, Guillevin's President and CEO. 


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IMARKWebsite visitors to the freshly designed IMARK Group website will learn about all of the benefits that accrue to members and suppliers in all IMARK divisions (Electrical.

HVACR, and Plumbing/Irrigation) as well as Luxury Products Group which supports decorative showrooms and IM Supply which is a national account sales solution for IMARK Group members. The website features videos from group leadership as well as an introductory video on the home page.




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EHRC Leader of the Year Stephanie SmithBy Blake Marchand

“It was quite surprising,” said Stephanie Smith of being named EHRC’s Leader of the Year. “Leadership in 2020 has certainly been a challenge for everybody in the world let alone the nuclear industry or the electricity industry.”

An engineer by trade, Smith spent the majority of her career with Ontario Power Generation (OPG). She was the first woman to be certified by the Canadian Nuclear Safety Commission at the Pickering Nuclear Generating Station where she served as Plant Manager and was recently named the first President and CEO of CANDU Owners Group. Smith is also a passionate advocate for diversity and inclusion.

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