In a recent article in the Toronto Star, Davies partners Natasha MacParland and Robin Schwill discuss the reasons why fewer businesses than normal went bust in 2020 despite the pandemic lockdowns.
Natasha, one of the authors of a recent report by Davies on business insolvencies, said the government supports have kept the pandemic’s economic impact at bay, stating, “The companies that filed during COVID had issues pre-COVID.”
Robin added that the way the government ends the subsidies and support programs will be as important as the programs themselves.
“This will either go one of two ways,” said Natasha: either the government supports will “smooth out” the bottom of the market and more companies will survive, or the taps will be suddenly turned off and we’ll see a spike in insolvency filings.
“My guess would be they are likely to tail off, as opposed to abruptly stop,” said Robin.