More Canadians filing for insolvency as cost of living pressures increase

Canadian insolvency filings have surged to their highest levels since the 2009 financial crisis, with 37,121 Canadians seeking insolvency protection in the first quarter of 2026—an 8.5% increase from the same period in 2025. This marks approximately 17 people filing for insolvency every hour, as mounting cost-of-living pressures, elevated debt burdens, and economic uncertainty push more households to their financial breaking point.

Key Drivers of the Surge

The insolvency wave is being driven by three primary factors: housing costs, auto loans, and food expenses. Rising costs are outpacing wage growth significantly—grocery prices in March 2026 were 35% higher than pre-pandemic levels, while fuel price volatility has increased costs at the pump and throughout the production and distribution chain. Trade tensions, employment worries, and renewed inflation concerns have compounded these pressures, making it difficult for debt-laden households to manage monthly budgets.

Provincial Variations

British Columbia experienced the largest year-over-year increase in consumer insolvencies at 16.2%, followed by Prince Edward Island (15.3%) and Ontario (14.7%). Ontario, which accounts for the largest share of national filings with 13,913 insolvencies in Q1 2026, saw a particularly notable surge in bankruptcies—increasing over 25% compared to 8.6% in British Columbia.

Profile of Those Filing

While the majority of insolvency filings continue to come from renters, homeowner insolvencies are gradually rising, now accounting for 8% of filings compared to 5% in 2024. The proportion of two-income households facing insolvency has surged to 23%—the highest since 2017—indicating that financial stress is affecting even dual-earner families. Bankruptcies represented 20% of total filings in Q1 2026, with consumer proposals comprising the remaining 80%.

Context and Outlook

Although current insolvency rates remain lower than 2009 levels when adjusted for population growth, experts are concerned about the upward trajectory. For the 12-month period ending March 31, 2026, consumer insolvencies increased 4.2% compared to the prior 12-month period, with a notable 17.5% monthly increase from January to March. Insolvency trustees anticipate the trend will continue as deteriorating economic conditions persist, with many Canadians entering this period of uncertainty already carrying debt they can no longer comfortably manage.