Insolvency professionals still suspect the rain is coming, says David Bish in a Canadian Accountant editorial

Canadian Accountant has republished a Torys Quarterly piece written by partner and head of the Corporate Restructuring and Advisory practice David Bish, in which he takes a deep dive into the current insolvency climate while looking ahead at what’s to come.

“The calm before the insolvency storm?” is an editorial where David explores why the predicted influx of insolvency filings projected for 2021 didn’t materialize, what to grasp of the overwhelming amount of good and bad news when it comes to economic health, and what he thinks we can expect in the coming months. Below is an excerpt of the piece.

Most insolvency professionals—being a skeptical lot that don't subscribe to rosy predictions—find this prediction hard to embrace. They're all stuck on the fundamentals of economic theory: economic shocks are supposed to cause adjustments, and that brings about business causalities. Like gravity, it's supposed to be an irrefutable law. But as we saw with the financial crisis in 2007-2008, we live in an age in which governments employ unprecedented fiscal and monetary tools designed to prevent adjustments from occurring. This means not just softening the impact and not just delaying an adjustment, but actually preventing an adjustment from happening at all. The resulting reality is that we're in uncharted economic waters. And try as we might, not every problem can be solved with unlimited spending, including fixing significant labour shortages expected to persist for some time—especially in sectors like hospitality and food services, health care, manufacturing and constructing, retail and trucking.

You can read the full piece on Canadian Accountant’s website, or as a part of the Torys Quarterly.

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