CAIRP: Q2 2026 Canadian Insolvency Statistics
Consumer insolvencies rose in the second quarter of 2026, with 37,523 consumer insolvencies filed in Canada, according to the latest data from the Office of the Superintendent of Bankruptcy (OSB). The Canadian Association of Insolvency and Restructuring Professionals (CAIRP) notes this is the highest quarterly volume of consumer insolvencies since 2009 and is equivalent to roughly 17 consumer insolvencies being filed every hour during the quarter, on average. Consumer insolvencies rose 6.9% compared to the same quarter last year.
“The latest insolvency data suggests that many highly indebted Canadians have not yet regained enough room in their budgets to reduce what they owe,” says Wesley Cowan, Licensed Insolvency Trustee and Vice Chair of the Canadian Association of Insolvency and Restructuring Professionals. “For those households, the problem is no longer a temporary period of financial pressure, but a more entrenched gap between income, expenses and debt obligations. Greater stability in interest rates does not immediately reduce accumulated debt or the cost of other essentials.”
Compared to the previous quarter, consumer insolvencies were up slightly, rising 1.1% in the second quarter of 2026. For the 12-month period ended June 30, 2026, insolvencies filed by consumers increased 5.9% compared to the 12-month period ended June 30, 2025.
While consumer insolvency filings continued to rise in Q2 2026, the most recent population-adjusted data provides context for the broader trend. The annual consumer insolvency rate in Canada in 2025 eased to 4.1 insolvencies per 1,000 Canadian adults aged 18 years and older, from 4.2 in 2024, but remained above the levels recorded from 2020 through 2023. On a population-adjusted basis, the rate edged down in 2025, reflecting in part the growth in Canada’s adult population.
At the same time, many indebted Canadians are still absorbing the cumulative effect of higher costs, while changes in employment, income or essential expenses can leave little time to rebuild savings or reduce debt.
“For households already stretched, the challenge is often the absence of recovery time between one higher bill and the next,” explains Cowan. “When each paycheque is already allocated, even relatively small changes in essential costs may have to be financed rather than absorbed. That is how a temporary reliance on credit can become a permanent feature of the household budget.”
Individuals may try to keep their accounts current by transferring balances, making minimum payments, delaying bills, refinancing or using one form of credit to pay another. While those measures may postpone an immediate payment problem, they can also allow balances and interest charges to continue building.
“When someone is repeatedly reorganizing debt without materially reducing it, the problem has moved beyond day-to-day budgeting,” says Cowan. “Transferring balances or using one credit product to service another may postpone a missed payment, but it does not change the amount owed or create additional income to repay it.”
Once balances and interest charges are increasing faster than payments can bring them down, people can become trapped in a cycle of reacting to whichever obligation is most urgent. Cowan says obtaining professional advice before arrears deepen, collection activity intensifies or legal action begins can help individuals understand the full scope of their financial position and the choices still available to them.
“Debt problems become more difficult to resolve when every decision is being made under immediate pressure,” says Cowan. “A Licensed Insolvency Trustee can examine the complete picture—including debts, income, assets and creditor action—and explain how each available option would affect the individual. Getting that clarity earlier can help prevent a series of short-term decisions from further narrowing the path forward.”
Licensed Insolvency Trustees are the only federally regulated debt professionals in Canada authorized to administer debt-relief options such as consumer proposals and bankruptcies. They are legally and ethically required to consider each individual’s full financial position and provide accurate, unbiased advice on all available options, including their costs, consequences and legal protections.
Initial consultations with a Licensed Insolvency Trustee are generally free. To find a government-regulated Licensed Insolvency Trustee, Canadians can visit: www.cairp.ca/find-a-lit.html.
Across the provinces, Prince Edward Island had the highest year-over-year increase in consumer insolvencies in the second quarter of 2026, rising 14.7% to 156 filings. This was followed by Saskatchewan, which experienced an 11.1% increase to 984 filings, and British Columbia, which saw a 10.9% increase to 4,207 filings. In the annual rate data, Newfoundland and Labrador had the highest consumer insolvency rate in 2025, at 5.1 insolvencies per 1,000 adults, followed by New Brunswick at 4.9 and Nova Scotia at 4.8.
Business Insolvencies Hold Steady Year-Over-Year but Rise 4.0% from Q1 Amid Weak Demand and Limited Ability to Pass Along Higher Costs
Business insolvencies in Canada were essentially unchanged in the second quarter of 2026 compared to the same quarter last year, rising just 0.2%, with 1,281 business insolvencies filed. Compared to the previous quarter, however, filings increased 4.0%. Many businesses continue to navigate uneven demand, higher operating costs and limited ability to pass those costs on to customers.
Filings in Q2 2026 remained 33.7% above the second-quarter pre-pandemic average. However, for the 12-month period ended June 30, 2026, business insolvencies were 9.7% lower than in the 12-month period ended June 30, 2025.
The broader trend also shows some moderation. The annual business insolvency rate declined to 1.0 insolvencies per 1,000 businesses in 2025, from 1.1 in 2024, after holding at 1.1 in both 2023 and 2024. Although the rate eased, it remained above the 0.9 recorded in 2019. Accommodation and Food Services had the highest annual rate among economic sectors at 5.0 insolvencies per 1,000 businesses, followed by Manufacturing at 4.1—both well above the national business insolvency rate of 1.0.
“For many businesses, demand remains too soft to support the price increases needed to fully offset higher costs,” says Craig Munro, Licensed Insolvency Trustee and Chair of CAIRP. “When expenses rise faster than a company can adjust its pricing, those costs are absorbed through margins and working capital. The quarter-over-quarter increase in insolvencies is a reminder that, even as the longer-term trend has eased, some businesses remain under significant financial pressure.”
Higher fuel, transportation, supply and tariff-related costs can affect businesses quickly, while pricing changes, contract renegotiations and alternative sourcing arrangements may take months to implement. Companies operating in competitive markets or under fixed-price contracts may have especially limited ability to pass those costs on to customers.
The resulting pressure may not initially appear as a sharp decline in revenue. It can emerge through thinner margins, increased borrowing, slower payments to suppliers, postponed remittances or reduced investment in the business. Over time, those measures leave less flexibility to respond to another cost increase, delayed receivable or change in demand.
“When ordinary operations begin to depend on personal borrowing, overdue remittances or continual extensions from suppliers, the business is losing control of the timing of its obligations,” says Munro. “A Licensed Insolvency Trustee can help establish which parts of the operation still generate value, how creditor claims and payment deadlines interact, and whether there is enough time and liquidity to pursue a restructuring before decisions are forced by a creditor.”
For businesses with a workable operational core, Canada’s insolvency and restructuring system can provide a structured way to address debt, coordinate creditor claims and preserve value before financial pressure leads to an abrupt closure. Licensed Insolvency Trustees provide an impartial assessment and can help owners understand whether creditor negotiations, a proposal, receivership, bankruptcy or an orderly wind-down may be appropriate.
The sectors experiencing the largest increases in the number of insolvencies in the second quarter of 2026 compared to the same quarter last year were Transportation and Warehousing (136 filings, up 36), Accommodation and Food Services (191 filings, up 30) and Manufacturing (112 filings, up 18). The sectors accounting for the largest share of business insolvencies in the second quarter of 2026 were Construction (16.9%) and Accommodation and Food Services (15.1%).
ABOUT CAIRP
The Canadian Association of Insolvency and Restructuring Professionals (CAIRP) is the national professional association representing close to 1,400 members and associates. CAIRP members have earned the CIRP designation, and most are licensed insolvency trustees (LIT) providing insolvency and restructuring services to consumers and businesses who experience financial challenges. CAIRP is a national voice on insolvency matters throughout Canada.
For more information visit: www.CAIRP.ca
CONTACT
Angela Joyce, Media Relations
p. 1.403.681.9286
e. aj@whiterabbitpr.com