Rising debt and economic uncertainty drove a double-digit surge
Canada recorded a 10% increase in insolvency filings in April compared to the previous month, reversing a trend of easing that began earlier in the year.
The latest data from Innovation, Science and Economic Development Canada show that both consumer and business insolvencies contributed to the rise, with total filings reaching 11,950, up from 10,864 in March.
The increase occurred during a period of economic uncertainty tied to slowing growth, trade policy concerns, and persistent cost-of-living pressures. Consumer insolvency filings—which include bankruptcies and proposals for debt renegotiation—were up 9.2% month over month, while business filings increased 18.6%.
Proposals continued to account for the majority of consumer cases, representing approximately 76% of total filings. Although consumer insolvency rates have moved higher in recent months, the national rate of 0.333 per 1,000 adults remains slightly below its pre-pandemic level. The current rate is highest in Newfoundland (0.423), New Brunswick (0.396), Nova Scotia (0.393), and Alberta (0.379).
Compared to April 2024, total insolvency filings rose 1.8%. While bankruptcies increased slightly by 0.2%, proposals declined by 2.5%. On a longer view, insolvencies are 1.7% above April 2019 levels, with proposals up 30% and bankruptcies down 40%.
The data show a mixed provincial picture. Newfoundland, Prince Edward Island, British Columbia, and Manitoba recorded year-over-year increases ranging from 4.4% to 16.6%. In contrast, declines were observed in Ontario (-5.2%), Alberta (-3.8%), Saskatchewan (-1.5%), and Quebec (-0.9%).
Business insolvencies, though accounting for a smaller portion of the total, followed a similar path. The increase in April filings was led by Ontario (+40.0% month over month) and Quebec (+14.2% month over month). Over the past year, however, national business insolvencies declined by 15.1%, driven largely by lower figures in Quebec (-25.8% year over year). Sectoral breakdowns show higher insolvencies in manufacturing, while declines occurred in administrative, transportation, and food services.
Alberta’s insolvency rate remained above the national average. April saw a 1.3% monthly rise in filings in the province. Consumer proposals were up 3.0%, and bankruptcies increased by 0.9%. Compared to 2019, consumer proposals in Alberta are up 45%, while bankruptcies are down 52%.
Business insolvencies in Alberta rose 4.0% from the previous year, with proposals up 63% and bankruptcies 24% higher. Households in the province continue to carry some of the highest debt-to-income ratios, with incomes lagging other regions, contributing to reduced purchasing capacity and vulnerability to income disruptions.
With ongoing economic adjustments and labour market conditions under scrutiny, the future path of insolvency filings may depend on shifts in employment and household financial resilience over the coming quarters.
