393 Canadians Filed for Insolvency Yesterday. The Government Is Calling It 'Manageable.'

One Canadian filed for insolvency every 3 minutes and 40 seconds last year, including weekends. The rolling 12-month total through January 2026 is 140,669.

The Bank of Canada, OSFI, and Finance Canada have all described the current insolvency situation as “stabilizing” or “consistent with historical norms.” The history they’re comparing to is 2020–2021, when courts were closed, CERB was running, and lenders had paused collections. Against 2019 — the last pre-pandemic year — the current rate is 68% higher. The baseline choice determines whether this looks like a plateau or a crisis. Officials have chosen the baseline that produces the plateau.

Why “Stabilizing” Is the Wrong Word

The last time Canada’s annual insolvency count was clearly documented in public data was 2021: 63,169 total insolvency filings. That figure itself was depressed. The pre-pandemic peak was 83,703 in 2019 — and the drop to 63,169 in 2020 and 2021 was not because Canadians got healthier financially. It was because:

• The Canada Emergency Response Benefit put $2,000/month into households that would otherwise have been defaulting
• Major lenders offered mortgage and credit card payment deferrals, removing the cashflow trigger for insolvency
• Courts operated at reduced capacity, creating a processing backlog that slowed the conversion of distress into formal filings
• The automatic stay provisions in the Bankruptcy and Insolvency Act were harder to trigger when creditor collection was itself constrained

Remove those supports, raise interest rates by 475 basis points over 18 months, and run the economy into a tariff-driven slowdown in 2025–2026 — and the 140,669 current annual rate makes complete structural sense.

The year-over-year consumer growth figure of 2.2% sounds modest. It is modest — because it is being compared to 2025 numbers that were already elevated. The 5-year comparison is more honest: the current rate is more than double 2021, and 68% higher than the 2019 pre-pandemic peak.

The 393 Daily Filers Are Not an Edge Case Demographic

It is tempting to think about insolvency as something that happens to people in crisis — a dramatic, identifiable breaking point. The data suggests otherwise.

The OSB’s Consumer Debtor Profile shows the average Canadian filing insolvency is 46 years old, earns $37,000 per year, and has $15,000 in total assets. They are most likely a renter. They most likely have credit card debt they have been managing for years. And in 45% of cases, they lost income — a layoff, reduced hours, a contract ending — before the filing happened.

The 393 people who filed yesterday are not dramatically different from the median Canadian household. They are median-income earners who had no buffer when something went wrong.

11,408 of January’s 11,775 total filings were consumer insolvencies — the 367 business insolvencies represent less than 4% of the total. The crisis is personal, not corporate.

The Consumer Proposal Has Replaced Bankruptcy 4-to-1 — and That’s a Separate Story

In 2019, the consumer proposal share of insolvency filings was around 57%. In January 2026, it is 79.4%.

This is a significant structural shift that the data shows clearly but commentary rarely addresses. The consumer proposal has become the dominant instrument of personal debt resolution in Canada — three out of four people who file choose it over bankruptcy.

This is partly the result of trustees doing their jobs well. A consumer proposal preserves assets, stops interest, stops collection calls, and allows a filer to keep their home and car. For the 14% of filers who own a home and the majority who have any assets at all, it is obviously preferable to bankruptcy.

But the 79.4% share also reflects how the pool of filers has changed. Consumer proposal filers tend to have more assets to protect and more income to fund the proposal payments. The shift toward proposals suggests that the profile of the average person filing has moved toward people with something at stake — homeowners, people with pension assets, people earning middle incomes — not just the most financially marginal.

Canada’s insolvency problem is moving up the income and asset distribution. It is no longer concentrated at the bottom.

Business Insolvencies Are Down 18% — That Isn’t Good News

Business insolvencies fell 18.3% year-over-year in January 2026. At first glance, this looks like good news. It is worth interrogating.

Several dynamics explain the decline:

Small business owners are filing personally. When a sole proprietor’s business fails, they often file a personal consumer proposal that includes business debt — because the debt is personally guaranteed. This shows up as a consumer filing, not a business filing. The business category undercounts actual small business failures.

Many businesses are closing without formal insolvency. The 2023–2024 wave of restaurant, retail, and service business closures in Canada resulted in thousands of businesses simply ceasing operations — returning the keys, walking away from leases, and winding down without formal BIA proceedings. This is not captured in the OSB data.

The construction, food service, and retail sectors are still the hardest hit. The January 2026 data shows construction leading with 761 business filings, accommodation and food at 638, and retail at 569 — all the sectors that employ the most working-class Canadians. These three sectors alone account for a majority of business insolvency filings, and all three are contracting on a rolling 12-month basis.

The business insolvency decline is not a signal that the economy has healed. It is a signal that the acute post-COVID business distress has partially run its course and shifted forms.

The Baseline Manipulation Is Not an Accident

When the Bank of Canada says household balance sheets are “resilient,” and when OSFI says insolvency is “consistent with historical norms,” they are making a choice about which history to cite.

The comparison that validates resilience: current rate vs. 2020–2021 suppressed data — looks stable.

The comparison that describes the actual situation: current rate vs. 2019 pre-pandemic levels — up 68%.

The choice of baseline is not a technical matter. It shapes whether policymakers, lenders, and households treat this as a manageable cyclical adjustment or a structural deterioration that requires response.

At 393 filings per day with no structural improvement in the income-to-debt ratios driving the underlying problem — rising unemployment at 6.7%, a housing market where affordability has not meaningfully recovered, a debt service ratio at 14.57% — the 2.2% year-over-year growth rate understates what is happening.

The Number the Official Commentary Doesn’t Mention

The 2.2% year-over-year consumer insolvency growth sounds moderate. It is being compared against 2025’s already-elevated numbers. The five-year compound rate — starting from the COVID-suppressed 2021 baseline — is not 2.2%. It is the distance from 63,169 annual filings to 140,669 in five years.

A government choosing its own baseline to describe its own performance is not a neutral act. Every press release that calls the current insolvency rate “historically consistent” is true relative to the baseline they selected and false relative to the baseline they chose not to cite.

The OSB publishes monthly insolvency data with about a six-week lag. The debt tracker aggregates it alongside unemployment, EI claims, and provincial stress rankings updated monthly. The per-city breakdown shows where the 140,669 annual filings are concentrated. The demographic profile of who’s filing shows why the “irresponsible borrower” explanation doesn’t fit the data.

The number the official commentary never leads with: in 2019, before COVID, before CERB, before the rate hikes — Canada had 83,703 annual insolvency filings. Today it has 140,669. That is 68% higher. It is being called a plateau.

Data source: Office of the Superintendent of Bankruptcy, Monthly Insolvency Statistics, January 2026. Historical comparisons from OSB Annual Statistics 2007–2024.