More Canadians are turning to formal insolvency proceedings as household budgets come under sustained pressure from rising costs, according to the latest data from the Office of the Superintendent of Bankruptcy.
Some 37,121 Canadians filed for insolvency in the first three months of 2026, the highest first-quarter total since 2009, when North America was still being shaken by the financial crisis. Filings were up 8.5 per cent from the same period last year.
The increase does not mean today’s insolvency conditions are identical to 2009. Insolvency trustee Doug Hoyes noted that Canada’s population is larger now, which means the insolvency rate, when adjusted for population growth, remains well below the level seen during that earlier crisis. Even so, he described the current rise as concerning and said his office has been receiving more calls from people struggling to keep up.
“Our expenses, for the most part, are rising a lot faster than what our incomes are,” Hoyes told CBC News. “How do you bridge that gap? Well, you do it with debt.”
Bankruptcy and proposals point to different levels of distress
Consumer insolvency filings generally fall into two categories: bankruptcies and consumer proposals. In the first quarter, bankruptcies accounted for 20 per cent of Canadian consumer insolvency filings, while consumer proposals made up the remaining 80 per cent.
A consumer proposal allows a person to repay debt on a set schedule over several years while keeping assets. Bankruptcy is more severe: the person owing money gives up assets such as vehicles or homes in order to eliminate debt.
That distinction matters because in some provinces, bankruptcies are rising faster than proposals. Anna Lund, a law professor at the University of Alberta, told CBC the trend suggests some consumers may be too deeply insolvent to commit to years of repayment and are instead moving into bankruptcy.
Where filings are rising fastest
British Columbia recorded the largest year-over-year jump in insolvencies, with filings up 16.2 per cent from the first quarter of 2025. Prince Edward Island followed at 15.3 per cent, while Ontario rose 14.7 per cent.
The pressure reflects a broader squeeze on household finances, with food, fuel and other expenses leaving less room for people to absorb shocks or pay down debt. Hoyes said many households can manage one or two difficult months, but prolonged cost increases can push debt loads beyond what borrowers can handle.
Hoyes said he expects insolvencies could continue to climb in the near term as economic uncertainty persists. For consumers, the practical advice remains basic but difficult: keep expenses as low as possible and build an emergency fund where there is enough cash flow to do so.
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