There was a significant rise in businesses filing for insolvency compared to one year earlier
Canadian insolvencies were up 13% in February compared to the previous month.
New figures from the Office of the Superintendent of Bankruptcy Canada (OSB) reveal that bankruptcies were up 6% while proposals increased by 16% month-over-month. Consumer filings were up 0.8% while business filings were up 3.5%.
Business insolvencies were up 37% compared to a year earlier, while consumer filings were down 1.6% over the same period. Overall, that led to a 0.6% decrease.
For the 12‑month period ending February 28, 2022, the total number of insolvencies increased by 0.8% in comparison to the 12‑month period ending February 28, 2021.
There were 7,392 insolvency filings by consumers and 276 by businesses in February 2022.
Ontario posted the largest number of consumer insolvencies (2,526) while Alberta saw the biggest percentage rise (up 20% month-over-month). For businesses, Quebec had the most (148) and although Nova Scotia saw a 300% increase (to 4), Ontario led for volume increase (from 45 to 80).
A recent report from Hoyes, Michalos & Associates showed the debt burden of insolvent Canadians was the highest in 5 years.
Proposals or bankruptcy?
Consumer insolvencies continue to use proposals as the main option, accounting for more than 70% of all filings in the 12 months to February 28, 2022. Businesses still tend to file for bankruptcy.
The sectors that registered the biggest decrease in the number of insolvencies were real estate and rental and leasing, and retail trade. Transportation and warehousing, and construction experienced the biggest increase in insolvencies.
