Consumer insolvencies in Canada hit their highest volume since 2019, showing ongoing financial strain
Canadian insolvencies rose in May compared to the previous year due to ongoing elevated inflation and interest rates, impacting both businesses and consumers, as reported by BNN Bloomberg.
The Office of the Superintendent of Bankruptcy released data on Friday showing a 19.2 percent increase in total insolvencies from May 2023 and a 3.1 percent increase from April.
André Bolduc, chair of the Canadian Association of Insolvency and Restructuring Professionals (CAIRP), noted that many Canadians are still experiencing financial difficulties. “Despite interest rates declining, the high cost of living and the high cost of servicing debt continue to strain budgets.”
Consumer insolvencies, which include both bankruptcies and proposals, reached 12,195 in May. This marked a 3.4 percent increase from April and an 11.3 percent rise from the previous year.
According to CAIRP, May was the fifth consecutive month of increasing consumer insolvencies, reaching the highest volume since October 2019.
Business insolvencies fell by 3.8 percent from April to 530 cases but rose by 41.7 percent compared to last year. The construction sector experienced a significant increase, with 92 insolvencies marking a 24.3 percent rise from April and a 109.1 percent increase from May of the previous year.
CAIRP highlighted that business insolvencies are now significantly higher than pre-pandemic levels, standing 67.6 percent above the May 2019 figures. Business insolvency levels have been continuously rising year-over-year for the past 2.5 years.
