Consumer and business insolvencies reach 15-year high in 2024

Consumer and business insolvencies reached a 15-year high in 2024. CTV’s Peter Szperling reports.

If you’re having a tougher time financially, you’re not alone. Consumer and business Insolvencies reached a 15-year high 2024, surpassing levels not seen since the 2009 recession.

“Consumer insolvencies were up 11.4 per cent last year, year over year. And business insolvencies were up 28.6 per cent, year over year,” says André Bolduc, chair with the Canadian Association of Insolvency and Restructuring Professionals (CAIRP).

It only takes a few strokes of bad luck.

“About 50 per cent of households in Canada are living paycheque to paycheque, so it means they have no savings. They have nothing to fall back on. So, yeah, when life events happen, like, job loss or job change or separation, those types of things, they have no room to maneuver,” Bolduc says.

Data from the Office of the Superintendent of Bankruptcy (OSB) shows consumer insolvencies were up compared to the previous year. There were 137,295 filings in 2024, 14,000 more than in 2023, averaging about 375 insolvencies per day.

Insolvency doesn’t necessarily mean bankruptcy, “Insolvency is the big basket that catches everything. That’s, you know, a formal process to deal with debt. Bankruptcy is a part of that,” says Marc Rouleau, senior vice-president at Doyle Salewski Inc.

The team at Doyle Salewski saw their busiest month ever, last October.

“Inflation’s been number one for sure. I mean food costs - you know we can’t ignore that; it’s been in the news for a long time. Rent costs have gone up. People are moving around job-wise a lot as well,” Rouleau says.

He says there are many factors affecting consumer and business insolvencies.

“Even if you’re a business, your supplies have gone up, your rent’s gone up, your labour has gone up. Your consumer going to the grocery store, your rent’s going up, your mortgage interest rates have also gone up. So, all those things force your hand and say, ‘OK, if I can’t generate more income, I got to cut costs. How do I do that?’”

Consumers are not surprised to hear the record numbers of people filing for insolvency.

“We see everyone’s having a harder time just making ends meet,” says Rita Abou-Arrage.

“Not really. Somewhat, but not a lot because I know some companies that have gone under that,” says another shopper.

According to CAIRP, initial consultations with a Licensed Insolvency Trustee are typically free.

“This provides individuals with valuable advice and no obligation, helping them better understand their debt-relief options.”

To find a government-regulated Licensed Insolvency Trustee visit: www.cairp.ca/find-a-lit.html.