Consumer insolvencies post double-digit increase while business filings hit 15-year high
More Canadians found their finances had reached an unassailable level in 2024 with insolvency filings increasingly sharply for households and businesses.
Office of the Superintendent of Bankruptcy data reveals that consumer insolvency filings were up 11.4% year-over-year with a total of 137,295 during last year, averaging around 375 a day. The level of filings eased by 2.5% in the last quarter of the year compared to the previous quarter but there was a 6.1% increase from the same period of 2023.
Canadian Association of Insolvency and Restructuring Professionals’ chair André Bolduc has been looking at the stats and says they highlight the severity of the financial pressures faced by Canadians last year, and with still-elevated interest rates and economic uncertainty there could be more pain ahead.
“The rising cost of living is putting increasing pressure on already stretched household budgets. At the same time, homeowners facing mortgage renewals this year may see significant increases in their monthly payments, leaving less room for essential expenses and debt repayment,” said Bolduc.
The largest increase in consumer insolvency filings year-over-year was in Ontario (up 17.8%) with 51,637 filings, followed by Quebec (up 12.1%) to 34,290, while PEI experienced an 11.4% increase to 559.
Business insolvencies
The number of insolvency filings by businesses reached 6,188 last year, a 28.6% year-over-year rise that marked a 15-year high.
Business filings were up more than 68% from pre-pandemic levels but, in the fourth quarter were 12.4% lower than the same period of 2024 and down 1.5% from the third quarter, suggesting stabilization, at least for the three month period.
“The record high number of filings last year shows that many businesses already face significant obstacles. Many have been struggling to stay afloat since the pandemic, grappling with ongoing pressures from high operational costs and weakened consumer spending,” said Bolduc.
The potential for tariffs to be introduced after their current pause is yet another concerning factor for Canadian businesses.
“Rising production costs, supply chain disruptions, reduced consumer demand, and overall uncertainty are making it increasingly difficult for Canadian businesses to maintain financial stability, particularly for those reliant on cross-border trade or already facing significant strain,” noted Bolduc. “Small and medium-sized enterprises (SMEs) are especially vulnerable to tariff-driven price hikes and the loss of key export markets, as they often lack the financial flexibility to withstand these pressures.”
The sectors that posted the largest increase in business insolvencies in 2024 includes construction (up 205 filings compared to 2023) and accounting for the largest share of insolvencies at 14.3%, transportation and warehousing sector (+198) and accommodation and food services (+163).
