Third-quarter statistics indicate that consumer insolvencies are on the rise, hitting quarterly volumes not seen since the great financial crisis.
Consumer insolvencies rose 4.8% year over year in the third quarter, according to data from the Office of the Superintendent of Bankruptcy (OSB). Quarter over quarter, insolvencies rose 3.3%.
The number of consumer insolvency filings in Q3 was 36,256 — the third-highest quarterly volume since the OSB’s tracking began in 1987, and the highest quarterly volume since 2009, during the global financial crisis, the Canadian Association of Insolvency and Restructuring Professionals (CAIRP) said in a release on Wednesday.
The third-quarter volume of consumer insolvencies was also markedly above pre-pandemic levels, sitting 17.1% higher than the pre-pandemic five-year average, the release said.
The OSB data indicated that for the 12-month period to the end of September 2025, consumer insolvencies were up nearly 3% relative to the 12-month period to the end of September 2024.
By province, B.C. had the most significant year-over-year increase in filings in the third quarter, at 19.4%, followed by P.E.I (11.9%) and Newfoundland and Labrador (8.3%). Ontario and Quebec recorded the highest number of consumer insolvency filings, with 13,893 and 8,898, respectively
Canadian borrowers have seen some financial relief over the past year and a half as the Bank of Canada began a series of rate cuts in June 2024. The central bank’s benchmark rate sits at 2.25% after the latest cut last month.
However, “for many, consumer insolvency filings are the result of financial pressures that have been building quietly for some time,” Wesley Cowan, CAIRP vice-chairman, said in Wednesday’s release.
Business insolvencies went in the opposite direction, falling 15.5% year over year in the third quarter, and 13.3% from the previous quarter.
“The drop in business insolvencies doesn’t necessarily mean businesses are in better shape,” Craig Munro, chairman of CAIRP, said in the release. “Some owners may be delaying filings by juggling debt or negotiating informally with creditors. Others simply wind down operations without entering the insolvency system, which means their financial challenges aren’t reflected in the official numbers.”
In October, the Canadian Federation of Independent business said trade tensions between the U.S. and Canada negatively affected 72% of polled small business owners. Also that month, the 12-month small business confidence index declined nearly four points month over month. This long-term confidence decreased in most provinces and across most sectors, the federation said. The three-month confidence index was flat.