Are Canadians Reaching Their Limit?

The first 3 months of 2026 had the highest insolvency rate since 2009.

More Canadians are filing for insolvency due to rising costs, according to the Office of the Superintendent of Bankruptcy.

37,121 Canadians filed for insolvency in the first quarter of 2026, the highest since 2009.

Insolvencies are up 8.5 per cent compared to the same time last year. This is a significant increase.

However, the population is higher now than in 2009, so insolvency rates are lower when adjusted for growth. Insolvency trustee Doug Hoyes notes this.

Hoyes says the increase is worrying, with more calls to his office due to rising costs for food, gas, and more.

Expenses are rising faster than incomes, says Hoyes. People bridge the gap with debt. This is a major issue.

Consumer insolvencies are at their highest since 2009.

Hoyes says most Canadians can handle one or two tough months, but multiple factors driving up costs for longer periods lead to debt piling up.

Many people are reaching their limit, says Hoyes.

British Columbia saw a 16.2 per cent spike in insolvencies, followed by Prince Edward Island and Ontario. This is a significant regional variation.

20 per cent of insolvencies were bankruptcies, while 80 per cent were consumer proposals.

In some provinces, bankruptcies grew faster than proposals, which is concerning.

Bankruptcies require handing over assets to eliminate debt, explains law professor Anna Lund.

Buy now, pay later plans may not be suitable for everyday purchases.

Consumer proposals allow people to repay debt over a few years while keeping assets.

The trend towards bankruptcies suggests people are in a deeper insolvency position, says Lund.

Hoyes expects insolvencies to keep climbing and advises prioritizing saving.

Hoyes recommends keeping expenses low and building an emergency fund to ride out tough times.

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