Bottom line
Insolvencies rose 0.6% m-o-m on a seasonally-adjusted basis (SA) in just, after a drop in May. While the data has been quite volatile over the past year, even on a seasonally-adjusted basis, insolvencies looks to be moving within a range over the period.
The consumer insolvency rate (insolvencies per 1,000 population) edged slightly higher in June, but remains lower than it was on the eve of the pandemic. (see Fig 6). However, the level of proposals (ie renegotiation of terms) is above pre-COVID levels in most provinces, while bankruptcy levels remain well below. We also note that the total levels of insolvencies in BC, Manitoba, Alberta, and Ontario are above the levels seen in 2019; all these provinces have higher-than-average levels of debt-to-disposable income (see Fig. 7). Similarly, these provinces have seen some of the biggest rise in insolvency rate compared to pre-Covid.
Business insolvencies increased in June on a seasonally-adjusted basis, partly reversing most of the decrease seen in May (see Fig. 8). We also note that the business bankruptcies have been relatively stable in 2025, putting an end to the declining trend that was seen since the surge in January 2024, following the CEBA loan repayment deadline (Fig 9).
Elevated household debt, reduced purchasing power due to the recent inflationary episode, and high interest rates have put pressure on households’ finances in recent years. Nevertheless, there has been no deterioration in insolvencies over the past year, likely due to declining interest rates in the second half of 2024. The labour market’s resilience is also playing a crucial role in this, allowing borrowers to weather various shocks by adjusting their lending to mitigate the impact of higher interest rates on their regular payments.
A weaker Canadian economy due to the impact of the US tariffs and the extreme uncertainty could lead to a rise in insolvencies in the coming months. Significant job losses would be a serious concern. As we have pointed to at numerous occasions, a deterioration in labour market conditions, especially job losses, and the associated decline in income would likely lead to a jump higher in insolvencies and could have some significantly negative consequences on the economy (see It’s a “Me-cession”, not a recession and Will it be a hard landing or a soft landing? The labour market will decide). Easing uncertainty, improving sentiment, and the resilience of the labour market suggest the economy is no longer deteriorating.
In Alberta, insolvencies increased in June and the consumer insolvency rate remains one of the highest amongst provinces. Albertan households have some of the highest debt-to-income ratios, making them vulnerable to rising interest rates and income losses. They have also seen a bigger decline in their purchasing power than other provinces due to underperforming wages and income gains (see Why are Albertans so grumpy? It’s about falling behind economically). This makes Albertans particularly vulnerable to job losses.
Insolvencies increased 0.4% m-o-m in June on a seasonally-adjusted basis, following a 2.7% m-o-m decrease in May. Insolvencies have been quite volatile over the past year, even on a seasonally-adjusted basis. Insolvencies, which include both bankruptcies and proposals (a renegotiation of terms), are 2.8% higher compared to the same month last year. This resulted from a 1.9% y-o-y growth in proposals while bankruptcies were higher by 5.9% y-o-y. It’s important to note that proposals represent about 76% of total insolvencies.
Compared to last year, insolvencies are mixed across provinces. Insolvencies increased the most in Newfoundland (+26.7% y-o-y), Manitoba (+13.6% y-o-y), and BC (+9.3% y-o-y). They eased the most in Saskatchewan (-14.3% y-o-y), PEI (-8.3% y-o-y), Nova Scotia (-3.3% y-o-y), and New Brunswick (-1.8% y-o-y).
On a monthly basis, insolvencies grew by 0.4% m-o-m seasonally-adjusted (sa) in June. The details show an increase in bankruptcies (+6.0% m-o-m) while proposals decreased (-1.3% m-o-m). At the provincial level, insolvencies were mixed. They increase the most in Manitoba (+7.5% m-o-m), Quebec (+2.0% m-o-m), and Nova Scotia (+1.9% m-o-m). They eased the most in New Brunswick (-7.3% m-o-m), Saskatchewan (-6.3% m-o-m), Newfoundland (-2.8% m-o-m), and BC (-1.1% m-o-m).
Relative to 2019, insolvencies in Canada are currently 0.3% lower, with proposals being 28% above their 2019 levels, while bankruptcies are 41% below. We note that the level of insolvencies is higher compared to pre-COVID in BC (+30.6%), Manitoba (+25.5%), Ontario (+15.2%), and Alberta (+14.3%).
The level of insolvencies is still well below pre-pandemic levels in PEI (-34.3%), New Brunswick (-34.0%), Nova Scotia (-28.3%), Newfoundland (-22.5%), and Quebec (-19.5%). They rose, led by Manitoba (+74.5%), BC (+72.1%), Alberta (+43.1%), Ontario (+36.0%), and Newfoundland (+23.7%).We note that the level of proposals is well above its pre-pandemic level in most provinces, except PEI (-10.9%), and New Brunswick (-4.3%).
The consumer insolvency rate (number of insolvencies per 1000 people aged 15 and over) remained at 0.326 in June. The insolvency rate is the highest in Newfoundland (0.447), Nova Scotia (0.398), Alberta (0.392), and Quebec (0.365). It is the lowest in BC (0.251), PEI (0.268), Saskatchewan (0.282), and Manitoba (0.283).
Compared to 2019, the insolvency rate is 0.047 lower nationally. It is higher than in 2019 only in Manitoba (+0.032) and BC (+0.030). It has eased the most in New Brunswick (-0.267), Nova Scotia (-0.224), PEI (-0.218) and Newfoundland (-0.152).
Business insolvencies grew by 6.1% m-o-m seasonally-adjusted in June, but are still lower than a year ago (-8.6% y-o-y). The decrease y-o-y in business insolvencies over the past year, representing less than 5% of total insolvencies, is due to a decline in bankruptcies (-6.8% y-o-y), and in proposals (-15.6% y-o-y). Bankruptcies represent about 76% of business insolvencies.
The increase in business insolvencies on monthly basis at the national level, was mainly the result of higher insolvencies in Ontario and Quebec, while the decline on a y-o-y basis was mainly due to lower insolvencies in Ontario and Quebec, partly offset by higher insolvencies in Alberta and BC.
By industrial sectors, the detail shows higher insolvencies compared to June last year for retail trade, other services except public admin, real estate and rental and leasing, construction, utilities, and agriculture, forest, fishing and hunting. These rises were partly offset by decreasing insolvencies in the accommodation and food services, professional, scientific and technical services, admin, support, waste management, remediation, management of companies and enterprises and wholesale trade.
Compared to pre-pandemic levels, business insolvencies in Canada are 40% higher, with BC (+73.6%), Ontario (+70.6%), Alberta (+42.9%), and Quebec (+33.6%) having seen the biggest increases.
In Alberta, insolvencies rose by 0.7% m-o-m sa. in June and were 2.5% higher compared to the same month last year. Over the past 12 months, there have been 19.5k insolvencies. On a seasonally-adjusted basis, the higher insolvencies in June came from an increase in bankruptcies (+11.8% m-o-m sa) and a decrease in Proposal (-3.1% m-o-m sa). We note that the level of proposals is currently about 43% above its pre-pandemic level, while bankruptcies are 45% below pre-COVID. On the consumer side, the insolvency rate rose to 0.392 from 0.391, slightly lower than pre-pandemic. On the business side, insolvencies are 23.8% higher than in June of last year, with a 9% y-o-y decrease in proposals and 60% y-o-y increase in bankruptcies.
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Independent Opinion
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