Insolvencies are surging as rising costs and uncertainty around housing and employment put more strain on consumers
Canadians are filing for insolvencies at levels unseen in more than a decade as rising costs and uncertainty around housing and employment put more strain on consumers, according to the latest data from the Office of the Superintendent of Bankruptcy.
The number of Canadians who filed for insolvency jumped 8.5 per cent year-over-year in the first quarter of 2026 to 37,121, the highest quarterly volume since 2009, the OSB recorded in statistics released on Monday. But the accelerating pace of insolvencies may be more concerning than the volume, said Doug Hoyes, a licensed insolvency trustee and co-founder of Hoyes, Michalos & Associates.
Insolvencies rose 4.2 per cent year-over-year in the 12-month period ending March 31 and the number of monthly insolvencies rose 17.5 per cent between January and March. Although insolvencies reached their highest quarterly volume since 2009, Mr. Hoyes said the numbers cannot be easily compared. That’s owing to the change in population levels, updates to the insolvency filing process and the global financial crisis at the time.
In the OSB data, British Columbia posted the highest overall spike in consumer insolvencies – bankruptcies and consumer proposals combined – rising 16.2 per cent year-over-year. A consumer proposal, Mr. Hoyes said, is a deal that allows someone in debt to avoid losing assets by agreeing to repay their creditors more over time. A bankruptcy means individuals may be required to forfeit assets to pay the debt.
Consumer proposals are more common among people who feel relatively stable or optimistic about their future finances, Mr. Hoyes said. In Ontario, consumer insolvencies rose 14.7 per cent, but the province held a far bigger share of bankruptcies, which grew more than 25 per cent compared with 8.6 per cent in B.C.
Mr. Hoyes said some of the bankruptcy spike in Ontario may be tied to the bigger economic impact of U.S. tariffs in the province, as it has a large manufacturing sector. Worsening economic conditions mean the trend in insolvencies could be sustained over a longer period.
Across Canada, the unemployment rate in April rose to 6.9 per cent compared with 6.7 per cent in MarchBut the biggest strain on Canadians are expenses that are increasing faster than incomes, especially as the price of fuel sends costs at the pump soaring. Food, which usesIn March, grocery prices were 35 per cent higher than just before the pandemic, BMO EconomicsWhile the bulk of insolvency filings are made by renters, according to Mr. Hoyes, homeowner insolvencies are gradually rising as well.from his firm found that homeowner insolvencies are now 8 per cent of filings compared with 5 per cent in 2024.
The proportion of two-income households reaching insolvency also spiked to 23 per cent, the highest level since 2017. André Bolduc, a licensed insolvency trustee who was speaking on behalf of the Canadian Association of Insolvency and Restructuring Professionals, said that the three main factors driving insolvencies are expenses related to housing, auto loans and food.
As consumers are amortizing their car payments over longer periods, with payments reaching as many as seven years now, their shortfalls become higher when they default or trade in their car early. Mr. Bolduc says he has seen shortfalls on cars that range from $10,000 to $30,000.
“That really adds up,” he said. He said while Canadians have carried higher levels of household debt than the rest of the G7 for more than a decade, rising housing costs and employment pressure could push Canadians who have long been on the brink of insolvency closer to the edge. He said he wouldn’t be surprised if the trend continues for a while.
“Insolvency is kind of a lagging indicator,” Mr. Bolduc said. “It’s not the problem per se. It’s a symptom of what’s happened in the past. ”
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