In 2024, insolvencies in Canada witnessed a significant rise of 12.1 percent compared to the previous year, with business insolvencies emerging as a primary driver, soaring by 28.6 percent. This alarming trend marks the highest rate of business and consumer insolvencies in 15 years, reflecting increasing financial strain on both businesses and individuals.

The Canadian Association of Insolvency and Restructuring Professionals reported that the sectors hardest hit by this increase included construction, transportation and warehousing, and accommodation and food services. According to the Office of the Superintendent of Bankruptcy, insolvencies encompass both bankruptcies and proposals filed by distressed entities.

Andre Bolduc, chair of the association, cautioned that both businesses and consumers should brace for ongoing financial pressure into 2025, particularly in light of possible new tariffs and the impending wave of mortgage renewals that many Canadians are set to face. Such factors contribute to the potential for even more insolvency filings as economic conditions evolve.

Highlighting the final quarter of 2024, there was a notable increase in insolvency filings, rising by 5.2 percent year-over-year, surpassing the 35,000 mark. The uptick was primarily driven by consumer insolvencies, which rose by 6.1 percent during this period. Conversely, business insolvencies experienced a decline of 12.4 percent in the same quarter, which may suggest a complex interplay of economic factors impacting different sectors.

This trend in insolvencies underscores a broader economic concern within Canada, indicating that many businesses and consumers are struggling amidst a challenging financial landscape. The increased filings, coupled with the forecasted ongoing pressure into the next year, reflect the uncertain economic climate that many Canadians will navigate in the forthcoming months.