Canada experienced its highest volume of consumer insolvencies in 15 years, surpassing levels not seen since the 2009 Great Recession, according to the Canadian Association of Insolvency and Restructuring Professionals (CAIRP).
The data from the Office of the Superintendent of Bankruptcy (OSB) reveals that consumer insolvencies rose by 11.4% in 2024 compared to the previous year. This sharp increase amounts to 137,295 filings—over 14,000 more than in 2023—averaging about 375 insolvencies per day. The surge underscores the mounting financial pressures faced by many Canadians amid increasingly challenging economic conditions, said the association in a news release on Tuesday.
“The rise in consumer insolvencies last year highlights the severity of the financial pressures many Canadians are experiencing, exacerbated by rising living costs and economic instability,” said André Bolduc, Licensed Insolvency Trustee and Chair of the Canadian Association of Insolvency and Restructuring Professionals (CAIRP), the national voice on insolvency matters in Canada.
Consumer insolvencies increased 6.1% in the fourth quarter of 2024 compared to the same period in 2023, while declining modestly by 2.5% from the third quarter of 2024, said the report.
With many Canadians concerned about the impact of potential tariffs and upcoming mortgage renewals at higher interest rates, Bolduc warned that these factors could further strain household finances in 2025.
“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,” he said.
Business Insolvencies Surge 30% in 2024, Hitting a 15-Year High
The report said business insolvencies jumped significantly in 2024, with a total of 6,188 filings, up 28.6% from 2023. This marks the highest number of filings in 15 years, underscoring the financial challenges many businesses faced in an uncertain economic environment. About 1,400 more businesses filed in 2024 compared to the previous year. Business insolvencies remain 68.2% higher than they were pre-pandemic in 2019.
Compared to the previous quarter, business insolvencies remained stable in the fourth quarter, rising 1.5%. However, compared to the fourth quarter of 2023, business insolvencies decreased by 12.4%, explained the association.
It said some sectors were hit harder than others in 2024. The construction sector experienced the largest increase in the number of business insolvencies, rising by 205 filings compared to 2023, followed by the transportation and warehousing sector (+198) and the accommodation and food services sector (+163). The construction sector accounted for the largest share of insolvencies in 2024, at 14.3%.
“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,” added Bolduc.
“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. 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.”
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