The Canadian economy may be outperforming, but households are getting slaughtered. The latest data from the Office of the Superintendent of Bankruptcy (OSB) shows consumer insolvencies surged in March. The 12-month volume has reached levels only seen during the 2010 and 2020 peaks—both periods known for sharp declines in economic activity. While annual growth had been slowing, March’s sudden spike suggests this trend may worsen before improving.
Key Findings
- March Spike: Insolvencies jumped 11.2% month-over-month to 12,126 filings (4.9% higher than 2024).
- 12-Month Total: 137,635 filings—just shy of the pandemic peak and 8% higher than last year
- Recession Incoming: Consumer insolvencies have only reached this level twice before—in 2010 and 2020.
Canadian Consumer Insolvencies May See A Second Wave Surge
Canadian consumer insolvencies continue climbing from pandemic lows. OSB reported insolvencies jumped 11.2% to 12,126 filings in March—4.9% higher than last year. Monthly data usually isn’t noteworthy due to seasonality, but noteworthy since it was the biggest jump since mid-2020. We’ll circle back to this in a moment.
Canadian Consumer Insolvencies Now Rival 2010 & 2020 Peaks
Canadian consumer insolvencies for the 12 months ending.
Source: OSB; Better Dwelling.
Over the past 12 months, Canadians filed 137,635 insolvencies—nearing the pandemic-era peak. The volume is 8% higher than last year, up from February’s 7.4% (which previously marked the slowest growth in 3 years). While the broader trend had been decelerating, March’s abrupt reversal erased some progress. It was only a single month, and one month isn’t a trend, but it can signal the start of one.
Consumer Insolvencies Typically Peak Before The Recession
History shows only two periods with comparable insolvency levels: the Global Financial Crisis (early 2010 peak), and the pandemic (March 2020 peak). Insolvencies peaked early in these recessions, suggesting today’s numbers might foreshadow an economic downturn.
Recent data shows signs of peaking, with 12-month growth starting to slow. This aligns with historical numbers and the current narrative that a recession is underway or imminent. Whether March’s acceleration was noise or the start of a second wave of debt reckoning fueled by a trade war, remains unclear.
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