Posted with permission from Financial Post

CALGARY – On Wednesday morning, one of Adam O'Keefe's moving crews is scheduled to pull up to a six-bedroom home in Springbank, a well-to-do neighbourhood just west of Calgary, clear the contents out of the house and send it directly to a consignment gallery.

O'Keefe doesn't know the specifics of the homeowner's situation, but as the oilpatch reels from a prolonged downturn in prices, the president of locally based Alberta Pro Movers has seen an unfortunate increase in court-ordered repossessions.

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"We've received a lot of calls saying ‘I need to be out of here right now; a lawyer will be present or a police [officer] will be present,'" he said in an interview Tuesday.

In a report Tuesday, CIBC said the number of Canadians being forced into insolvency is on the rise for the first time since the recession. The bank says the cumulative number of insolvencies rose by 1.2 per cent in the six-month period ended in February.

The overall increase came as personal bankruptcies across Canada fell by 4.7 per cent. However the number of proposals, in which consumers renegotiate with their financial institution to repay only a portion of their debt, jumped nine per cent, with  Alberta, Saskatchewan and Manitoba leading the way.

"The damage from lower oil prices is starting to show," said CIBC economist Benjamin Tal.

Cumulative insolvencies in Manitoba and Saskatchewan rose by almost 11 per cent in the six-month period, while Alberta saw an 6.5 per cent increase, the province's "worst showing since the recession," CIBC said.

The report notes "there are reasons to believe that the coming quarters will see continued deterioration" in the number of bankruptcies in Canada's largest oil-and-gas producing province.

For example, the number of bankruptcy proposals in Alberta is up 24 per cent in the six months ending in February. The province is also home to the highest share of bankruptcy proposals in Canada.

The most recent data from the Canadian Bankers Association show the percentage of its lenders' mortgages at least three months in arrears in Alberta held steady at 0.27 per cent between October and February.

But with a number of industry associations and related organizations predicting tens of thousands of jobs will be lost over the course of the year in the oil and gas industry as a result of the collapse in oil prices the situation is likely to get worse before it gets better.

Such jobs losses, like the growing number of foreclosures, are keeping O'Keefe's moving company busy.

"I've seen a dramatic increase over the last couple weeks of leads coming in, people looking to go to Newfoundland, Nova Scotia, Ontario and it does seem, from the customers I've spoken with, that it is the oil industry," he said. He added that just last year, his company had been moving more people into Alberta than out of it, but the proportions have switched.

We've received a lot of calls saying I need to be out of here right now; a lawyer will be present or a police [officer] will be present

"When we have job losses, typically it also slows net migration," the Calgary Real Estate Board's chief economist Ann-Marie Lurie said in an interview. "We have seen net migration pulling back but that was from relatively high levels. That was in Q4; it will start to impact 2015 as well."

However, Lurie said migration forecasts for Alberta still predict more people will move to Alberta than leave the province. She said that a longer period of sustained job losses would be required before there was dramatic realignment of migration numbers in the province, or before migration forecasts changed.

Financial Post
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