Insolvency filings push Canada toward a historic breaking point
Over the 12 months ending June, 150,505 insolvencies were filed, up 5.3% from the prior year and within 0.4% of the all-time 12-month record set in 2010.
Homeowners are increasingly in the mix
Consumer proposals — formal arrangements to renegotiate debt with creditors — accounted for roughly 76% of June filings and rose 11.3% year-over-year, according to Servus economists Charles St-Arnaud and Oriane Kacoutie.
Bankruptcies climbed 12.2% over the same period. On a seasonally adjusted basis, total filings rose 9.4% from May alone. Total insolvency volumes now stand 12.5% above their 2019 level.
The shift within the homeowner segment is the detail mortgage brokers should watch most closely. A February report by Hoyes, Michalos & Associates, a licensed insolvency firm in Ontario, found homeowner insolvencies now represent 8% of all filings, up from 5% in 2024.
Two-income households accounted for 23% of Q2 filings, the highest proportion since 2017. Declining property values have closed off refinancing as a debt management tool.
