Consumer filings remain elevated in 2025, while business failures cool but stay well above norms
Consumer financial stress in Canada showed few signs of easing in 2025, with insolvency filings reaching levels rarely seen outside major downturns, according to new data highlighted by the Canadian Association of Insolvency and Restructuring Professionals (CAIRP).
Figures from the Office of the Superintendent of Bankruptcy reveal that consumer insolvencies rose 2.3% year over year to 140,457 filings. That makes 2025 the second-busiest year on record for consumer insolvencies since tracking began in 1987, and the highest annual total since 2009. On average, roughly 385 Canadians filed each day—about 10 more daily filings than in 2024.
While the pace of growth cooled compared with the sharp acceleration seen a year earlier, volumes remain historically high. Persistent cost-of-living pressures, heavier debt loads and ongoing economic uncertainty continue to strain household finances.
“The modest increase in consumer insolvencies in 2025 suggests that financial pressure remains widespread, even as some economic indicators have begun to stabilize,” says Wesley Cowan, Licensed Insolvency Trustee and vice chair of CAIRP. “Many households are still feeling the cumulative impact of years of high inflation, higher borrowing costs, and stretched budgets.”
Quarterly data points to a leveling off rather than a turnaround. Consumer insolvencies slipped 3.8% in Q4 compared with Q3 yet still came in 3.3% higher than the same quarter in 2024.
Debt levels, meanwhile, continue to climb. Equifax Canada reports total consumer debt of $2.62 trillion as of Q3 2025, up 3.4% from a year earlier. Average non-mortgage debt reached $22,321 per consumer, an increase of $511 year over year.
Cowan warns this may indicate that some households are leaning more heavily on credit to bridge gaps rather than addressing problems earlier. “When people are juggling rising costs with growing balances on credit cards, lines of credit, and other loans, they can feel like they’re managing, until they’re not,” he explains. “That can keep insolvency volumes steady in the short term, even as underlying financial stress continues to build.”
Mortgage renewals at higher rates, still-elevated everyday expenses and uneven labour market conditions are adding to the fragility of household balance sheets.
“Even as inflation has cooled from its peak, everyday expenses remain significantly higher than they were just a few years ago. For homeowners renewing mortgages at higher rates, the impact on monthly budgets can be substantial, leaving less room for savings and debt repayment,” Cowan says. “While the much-discussed mortgage ‘renewal cliff’ has not been as severe as some earlier forecasts suggested, higher payments for many homeowners are still squeezing household budgets and, in some cases, spilling over into missed or delayed payments on other credit. At the same time, while the job market has held up overall, conditions haven’t been the same for everyone, which is adding to financial anxiety for some households.”
Cowan emphasizes that Canadians do not need to wait until crisis hits before seeking guidance. “Whether someone is already overwhelmed by debt or simply unsure of their options, Licensed Insolvency Trustees can help people understand what they’re dealing with and what their options actually look like,” he says. “They typically offer free initial consultations, with no pressure or obligation, and clearly explain all available debt-relief options… The earlier people seek guidance, the more options they usually have.”
Provincially, British Columbia recorded the largest year-over-year increase in consumer insolvencies, up 10.6% to 15,331 filings. Newfoundland and Labrador followed with a 7.0% rise to 2,395, while Prince Edward Island saw a 6.1% increase to 593 filings.
Business insolvencies: off the peak, not out of the woods
On the business side, insolvency filings eased in 2025 to 4,840 cases, a 21.8% decline from 2024. Even so, volumes remain 31.5% above the pre-pandemic average, underscoring ongoing stress in the corporate sector.
Business filings were largely flat quarter over quarter in Q4, edging up 1.3% from Q3 but falling 15.8% from Q4 2024.
“Business insolvencies have come down in 2025, but that doesn’t mean the operating environment has suddenly become easy,” says Craig Munro, Licensed Insolvency Trustee and chair of CAIRP. “Many businesses are still managing higher costs, tighter margins, and uneven demand, which continues to test their resilience.”
Munro notes that uncertainty around trade, financing costs and supply chains remains a risk, particularly for smaller firms. “Supply chain volatility and higher financing costs continue to weigh on many Canadian businesses, and ongoing uncertainty around cross-border trade and export demand remains a headwind,” he says. “Larger businesses are often better positioned to ride out these shifts, while smaller businesses are typically the first to feel these pressures.”
He adds that early engagement can make a meaningful difference. “Speaking with a Licensed Insolvency Trustee can give business owners a clearer picture of their options, whether that means negotiating with creditors, restructuring debt, or making strategic adjustments to strengthen long-term viability.”
Sector data show that Agriculture, Forestry, Fishing and Hunting; Mining, Quarrying and Oil and Gas Extraction; and Utilities were the only industries to see increased business insolvencies in 2025. The steepest declines occurred in Accommodation and Food Services, Transportation and Warehousing, and Construction—though Construction still accounted for the largest share of business insolvencies at 15.5%, followed closely by Accommodation and Food Services at 13.7%.
