Insolvencies rose 12.1 percent last year compared with 2023, with business insolvencies leading the way, up 28.6 percent.
Construction, transportation and warehousing, and accommodation and food services were the sectors that saw the biggest increases in insolvencies in 2024, according to the Office of the Superintendent of Bankruptcy. Insolvencies include both bankruptcies and proposals.
The Canadian Association of Insolvency and Restructuring Professionals says 2024 saw a 15-year high in business and consumer insolvencies—about 375 insolvencies per day.
Association chair Andre Bolduc says businesses and consumers should expect continued pressure in 2025 amid potential tariffs and mortgage renewals.
“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 Bolduc in a statement.
The Bank of Canada has lowered its benchmark interest rate to three percent, down from a high of five percent, as the economy has weakened.
However, homeowners renewing mortgages in 2025 are likely still facing higher monthly payments than when they last locked in a rate, and prices on many everyday necessities are still more expensive than they were a few years ago.
Businesses are also under pressure.
“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,” said Bolduc.
U.S. President Donald Trump over the weekend said he would enact sweeping duties on Canadian goods this week, at 25 percent for all imports and a lower 10 percent tariff on energy.
After speaking with Prime Minister Justin Trudeau, who brought new commitments to the table to try and appease Trump’s concerns about border security, the tariffs—and Canada’s retaliatory tariffs—were put on hold for 30 days. But uncertainty remains over what will happen once that period ends.
Bolduc said small- and medium-sized businesses are particularly vulnerable to the higher costs tariffs would bring as well as the potential loss of key export markets.
Insolvency filings in the fourth quarter of 2024 rose 5.2 percent year-over-year to more than 35,000.
The increase was led by consumer insolvencies, which rose 6.1 percent, while business insolvencies were down 12.4 percent in the fourth quarter.
