Canadian Insolvency Statistics 2026: Key Trends and Data

TL;DR

Canadian consumer insolvency filings are trending upward in 2026, continuing a pattern driven by elevated household debt, sustained higher interest rates, and increasing cost of living. Consumer proposals now account for over 80% of all consumer insolvency filings, reflecting a clear long-term shift away from bankruptcy. Ontario, Quebec, and Alberta represent the largest shares of total filings, while Atlantic provinces show higher per-capita rates. Understanding these trends helps contextualize the debt challenges facing Canadians.

The Current Landscape

The Canadian insolvency landscape in 2026 is shaped by several converging forces:

Household debt remains historically high. According to Statistics Canada, the household debt-to-disposable-income ratio has remained above 180%, meaning Canadian households owe more than $1.80 for every dollar of disposable income. This ratio is among the highest in the G7.

Interest rates have remained elevated. After the significant rate increases of 2022-2023, the Bank of Canada's benchmark rate has remained higher than the near-zero levels of the pandemic era. Variable-rate mortgage holders and those with lines of credit have seen their monthly payments increase substantially.

Cost of living pressures persist. Housing costs, food prices, and essential expenses continue to absorb a larger share of household budgets, leaving less room for debt servicing.

Key Filing Trends

Consumer Proposals Dominate

The shift from bankruptcies to consumer proposals is the most significant long-term trend in Canadian insolvency:

| Year | Consumer Proposals (% of Filings) | Bankruptcies (% of Filings) | |---|---|---| | 2015 | ~50% | ~50% | | 2018 | ~60% | ~40% | | 2020 | ~65% | ~35% | | 2022 | ~75% | ~25% | | 2024 | ~79% | ~21% | | 2025 | ~81% | ~19% |

This trend reflects several factors:

• Greater awareness of consumer proposals as an option
• Creditor preference for higher recovery rates through proposals vs. bankruptcy
• Increased home equity making proposals more attractive (protecting home equity)
• Licensed Insolvency Trustees more actively presenting proposals as a first option

Learn more about consumer proposals and how they compare to other debt relief options.

Filing Volume Trends

Consumer insolvency filings have followed a distinctive pattern over the past decade:

• 2019 (pre-pandemic peak): Approximately 137,000 filings
• 2020 (pandemic low): Filings dropped sharply due to government relief programs (CERB, mortgage deferrals, student loan payment pauses)
• 2021-2022: Gradual recovery as support programs ended
• 2023-2024: Sharp increase as the full impact of higher rates and expired pandemic relief hit household budgets
• 2025: Filings exceeded 140,000, surpassing pre-pandemic levels
• 2026 (year-to-date): The upward trend continues, with Q1 data showing year-over-year increases

The pandemic created an artificial suppression in filings — government programs delayed rather than prevented many insolvencies. The current period represents a normalization plus catch-up effect.

Provincial Breakdown

Total Filings by Province

Ontario, Quebec, and Alberta consistently represent the majority of filings in absolute terms, reflecting their population sizes:

• Ontario: ~40% of national filings
• Quebec: ~25% of national filings
• Alberta: ~12% of national filings
• British Columbia: ~10% of national filings
• Atlantic provinces: ~8% combined
• Prairie provinces: ~5% combined

Per-Capita Filing Rates

When adjusted for population, the picture changes significantly:

• Atlantic provinces (particularly New Brunswick and Nova Scotia) consistently show higher per-capita filing rates, reflecting lower average incomes and higher relative debt burdens
• Ontario falls to middle-of-pack on a per-capita basis
• British Columbia has historically lower per-capita rates, though rising housing costs are pushing rates upward

Demographic Insights

CAIRP data provides insight into who is filing:

Age distribution:

• The 35-49 age group represents the largest share of consumer proposal filings
• Filings among those aged 50+ have increased, reflecting retirement-era debt challenges
• Younger Canadians (under 30) are filing at increasing rates, often driven by student loan debt, credit cards, and cost-of-living challenges

Average debt levels at filing:

• The average unsecured debt at the time of consumer proposal filing is approximately $50,000 to $70,000
• Tax debt (CRA) is a component in a growing percentage of filings
• Payday loan debt appears in an increasing share of proposals, reflecting the growth of high-cost short-term lending

Income levels:

• The median income of consumer proposal filers is approximately $2,800 to $3,200 per month (net)
• This suggests that insolvency is not limited to the lowest-income Canadians — many middle-income individuals are filing as debt servicing costs exceed their capacity

What the Data Means for You

If you are reading this because you are struggling with debt, here is what these statistics tell you:

1. You are not alone. Over 140,000 Canadians filed for insolvency in 2025 alone. Debt problems are extremely common and do not reflect personal failure.

2. Consumer proposals work. The fact that over 80% of filers choose consumer proposals — and that creditors accept approximately 90% of them — demonstrates that this is a well-functioning system that serves both debtors and creditors.

3. Early action matters. Filing data shows that outcomes are better when people seek help earlier. Waiting until wages are being garnished or bank accounts are frozen limits your options.

4. Free help is available. Despite the scale of the problem, free professional help through Licensed Insolvency Trustees and non-profit credit counselling agencies is available across the country.

Take our debt relief quiz to understand your options, or use our consumer proposal calculator to estimate potential payments based on your specific situation.

Looking Ahead: 2026-2027 Projections

Several factors suggest that filing volumes will remain elevated through 2026 and into 2027:

• Mortgage renewals at higher rates — a significant wave of fixed-rate mortgages taken during the low-rate period of 2020-2022 will renew at substantially higher rates through 2026-2027
• Continued cost-of-living pressure — food, housing, and essential costs remain elevated
• Credit card debt at record levels — Canadian credit card balances continue to grow
• Delayed insolvencies — some individuals who have been managing through minimum payments will reach a breaking point as savings are exhausted

These projections are not meant to alarm but to inform. Understanding the broader context helps individuals recognize when they need to seek help and reassures them that doing so is a normal and responsible response to financial difficulty.

Explore all debt relief options to understand what is available to you.

FAQ

Where does the insolvency data come from? The primary source is the Office of the Superintendent of Bankruptcy Canada (OSB), which publishes monthly and quarterly insolvency statistics. The Canadian Association of Insolvency and Restructuring Professionals (CAIRP) provides additional analysis and demographic breakdowns through their quarterly reports.

Does filing for insolvency affect my ability to get a job? In most cases, no. Employers generally cannot use bankruptcy or consumer proposal status as a reason not to hire you. However, certain positions in the financial sector or roles involving fiduciary responsibility may require credit checks as part of the hiring process.

Are insolvency rates in Canada higher than in other countries? Canada's household debt levels are among the highest in the developed world, but insolvency filing rates per capita are broadly comparable to similar economies. The key difference is Canada's strong consumer proposal system, which provides a middle-ground option that does not exist in the same form in many other countries.

Will insolvency filings decrease if interest rates drop? Rate decreases would reduce debt servicing costs and likely moderate filing growth, but they are unlikely to reverse the trend entirely. Elevated housing costs, accumulated consumer debt, and structural cost-of-living pressures will continue to drive filings regardless of modest rate adjustments.

Sources

• Office of the Superintendent of Bankruptcy Canada — Insolvency Statistics
• Canadian Association of Insolvency and Restructuring Professionals (CAIRP) — Quarterly Reports
• Statistics Canada — Household Debt Indicators
• Bank of Canada — Financial System Review