A see through piggy bank with money coins

Insolvency numbers ticked up in June but remain far below last year’s levels, according to the latest data from the Office of the Superintendent of Bankruptcy Canada (OSB).

The agency reported that the total number of insolvencies rose by 4.7% in June compared to the month previous, as the number of bankruptcies increased by 8% and consumer proposals grew by 2.9%.

The month-over-month increase follows a sharp drop in insolvency filings since the Covid-19 pandemic hit.

The massive economic disruption caused by the pandemic prompted measures that may be temporarily preventing insolvencies, such as extensive government support programs that have propped up incomes and payment deferrals by creditors.

While the number of insolvencies rose in June, they’re down by 41.1% from the same month in 2019.

Consumer insolvencies are down by 41.8% from last year, and business insolvencies are down by 15.3%, the OSB said.

For the 12-month period ending June 30, the total number of insolvencies is down by 5.8% compared with the same period a year ago.

These sharp drops in insolvency numbers are expected to reverse as income support programs expire and creditor forbearance comes to an end, more fully exposing households and businesses to the economic fallout from the pandemic.