Consumer insolvencies in Canada edged higher in 2025 to the second-highest annual total ever recorded, while business insolvencies declined from the year before but remained well above pre-pandemic levels, according to data cited by the Canadian Association of Insolvency and Restructuring Professionals.
Figures from the Office of the Superintendent of Bankruptcy show consumer insolvencies rose 2.3 per cent last year from 2024 to 140,457 filings. The total represents the highest level in 16 years and translates to an average of about 385 consumer insolvencies per day.
The data suggest financial strain on households remains widespread, even as the pace of growth slowed from the sharp increases recorded in 2024.
Consumer filings remain elevated
“The modest increase in consumer insolvencies in 2025 suggests that financial pressure remains widespread, even as some economic indicators have begun to stabilize,” said Wesley Cowan, a licensed insolvency trustee and vice-chair of CAIRP. “Many households are still feeling the cumulative impact of years of high inflation, higher borrowing costs, and stretched budgets.”
Consumer insolvencies dipped 3.8 per cent in the fourth quarter compared with the third quarter, but were still up 3.3 per cent from the same quarter a year earlier.
CAIRP said overall consumer insolvency volumes have levelled off in recent quarters, even as household debt continues to climb. Equifax Canada reported total consumer debt reached $2.62 trillion in the third quarter of 2025, up 3.4 per cent from a year earlier, while average non-mortgage debt per consumer rose to $22,321.
Cowan said the combination of steady insolvency volumes and rising debt may indicate some households are postponing action.
“Many households may be ‘delaying the inevitable’ by relying more heavily on credit to stay afloat rather than seeking help earlier,” he said. “When people are juggling rising costs with growing balances on credit cards, lines of credit, and other loans, they can feel like they’re managing, until they’re not. That can keep insolvency volumes steady in the short term, even as underlying financial stress continues to build.”
Mortgage pressures and uneven job conditions
Cowan said higher mortgage payments and ongoing cost-of-living pressures continue to weigh on household finances.
“Even as inflation has cooled from its peak, everyday expenses remain significantly higher than they were just a few years ago. For homeowners renewing mortgages at higher rates, the impact on monthly budgets can be substantial, leaving less room for savings and debt repayment,” he said. “While the much-discussed mortgage ‘renewal cliff’ has not been as severe as some earlier forecasts suggested, higher payments for many homeowners are still squeezing household budgets and, in some cases, spilling over into missed or delayed payments on other credit. At the same time, while the job market has held up overall, conditions haven’t been the same for everyone, which is adding to financial anxiety for some households.”
CAIRP said the data underscore the importance of early support for individuals facing financial stress.
“Whether someone is already overwhelmed by debt or simply unsure of their options, Licensed Insolvency Trustees can help people understand what they’re dealing with and what their options actually look like,” Cowan said. “They typically offer free initial consultations, with no pressure or obligation, and clearly explain all available debt-relief options, which could include reworking a budget, consolidating debts, selling assets, or filing a consumer proposal or bankruptcy. They can also step in to stop collection calls and ease the stress of dealing with creditors. The earlier people seek guidance, the more options they usually have.”
Provincial differences
Among provinces, British Columbia recorded the largest year-over-year increase in consumer insolvencies in 2025, rising 10.6 per cent to 15,331 filings. Newfoundland and Labrador followed with a seven per cent increase to 2,395 filings, while Prince Edward Island saw a 6.1 per cent rise to 593 filings.
Business insolvencies decline but stay elevated
Business insolvencies moved in the opposite direction in 2025, falling 21.8 per cent from 2024 to 4,840 filings. Despite the decline, CAIRP said the total remains 31.5 per cent above the pre-pandemic average from 2016 to 2019.
Business filings rose 1.3 per cent in the fourth quarter from the previous quarter, but were down 15.8 per cent compared with the same period in 2024.
“Business insolvencies have come down in 2025, but that doesn’t mean the operating environment has suddenly become easy,” said Craig Munro, a licensed insolvency trustee and chair of CAIRP. “Many businesses are still managing higher costs, tighter margins, and uneven demand, which continues to test their resilience.”
CAIRP said many firms remain cautious, often limiting investment and hiring amid softer demand.
Ongoing risks for some sectors
Munro said uncertainty continues to pose challenges for certain businesses.
“Supply chain volatility and higher financing costs continue to weigh on many Canadian businesses, and ongoing uncertainty around cross-border trade and export demand remains a headwind, particularly for companies that rely heavily on international markets,” he said. “Larger businesses are often better positioned to ride out these shifts, while smaller businesses are typically the first to feel these pressures, making it harder for them to weather unexpected shocks or prolonged periods of weaker demand.”
Munro said early intervention can help business owners assess their options.
“Speaking with a Licensed Insolvency Trustee can give business owners a clearer picture of their options, whether that means negotiating with creditors, restructuring debt, or making strategic adjustments to strengthen long-term viability,” he said.
Sector-level data showed only three industries recorded increases in business insolvencies in 2025: agriculture, forestry, fishing and hunting; mining, quarrying and oil and gas extraction; and utilities. The largest declines were reported in accommodation and food services, transportation and warehousing, and construction, though accommodation and food services continued to account for a significant share of total filings.
Construction represented the largest portion of business insolvencies in 2025 at 15.5 per cent, followed by accommodation and food services at 13.7 per cent.
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