Ontarians continue to carry record levels of personal debt and for many residents, a consumer proposal or a personal bankruptcy becomes the only way out of financial trouble.
We update this page for monthly data trends as they are released by the Office of the Superintendent of Ontario.
2021 Consumer Insolvency Filings
Consumer insolvency growth slowed in July, with Ontario’s year-over-year growth returning to negative territory after three months of increases. Ontario insolvencies declined 10.3% compared to July 2020, while Canadian filings increased a modest 0.3%.
July and August are typically slower months seasonally for consumer insolvencies, however, the declines in July were a reversal of the previous uptrend in filings. We expect this decline to be temporary and may have more to do with a ‘wait and see what happens’ approach among indebted Canadians. Much of Ontario was still in partial lockdowns in July, with people only slowly returning to work. Time will tell whether they have been able to pay down debt sufficiently during the pandemic to keep insolvencies low for a long period, or whether they will face repayment pressures as they find employment.
We continue to see an increase in collection activity from major lenders and an increase in the commencement of legal action. As we noted last month, loans that went into default just prior to the pandemic are nearing the two-year statute of limitations in Ontario baring legal collection options. Courts shut down during much of the pandemic and there is significant uncertainty as to how the province’s emergency orders impacted limitation periods. Technically civil matters in Ontario were suspended from mid-March 2021 to mid-September 2020. This should have extended the limitation period by 6 months. However, since the emergency order was revoked, it’s not clear if this extension still applies. Given the uncertainty, we expect to see a significant ramp-up in legal collection actions into the fall.
Consumer proposals as a percentage of total consumer insolvencies increased to 75.5% in Ontario and 70.4% across Canada. This rise is an indicator that those who are filing are likely working as few proposals are filed by homeowners right now. Our Homeowners Bankruptcy Index hit record lows in August 2021, at just 1.6%.
Ontario Consumer Insolvency Statistics by Region 2020
COVID-19 had an unusual impact on consumer insolvencies in 2020. Ontario insolvencies ended the year down 24.2% and Canadian consumer insolvencies declined 29.7%.
In total, 33,992 Ontarians across Ontario filed insolvency in 2020. Personal bankruptcies fell 36.8% and consumer proposals declined 18.2%. Proposals as a share of Ontario insolvencies increased to 73% in 2020, from 66% in 2019.
Below is a summary of insolvencies by geographic region as summarized by Hoyes Michalos based on insolvency statistics by FSA provided by the Office of the Superintendent of Bankruptcy (OSB). Regional FSA allocations may differ slightly from annual economic region data provided by the OSB as the regional data summarized by Hoyes Michalos provides additional location details than is available by economic region.
|Consumer Insolvencies||Total Growth||Growth Bankruptcy||Growth Proposal||% Proposals|
|City of Toronto||2,181||-16%||-36%||-8%||78%|
|Newmarket & Area||671||-22%||-44%||-11%||77%|
|North Bay Region||412||-31%||-48%||-22%||75%|
|Orangeville & Area||255||-28%||-45%||-21%||78%|
|Parry Sound-Huntsville Region||241||-43%||-46%||-41%||71%|
|Sault Ste. Marie Region||357||-22%||-39%||3%||52%|
|Thunder Bay Region||466||-19%||-28%||-7%||50%|
|*Region includes surrounding rural areas|
Who files insolvency in Ontario?
The average insolvent debtor looks much like the average person in Ontario. They are working and struggling to make ends meet. To read more about what the average bankrupt looks like, see our bankruptcy research study: Joe Debtor.
For commentary and information about consumer insolvencies and debt issues in Ontario, contact:
J. Douglas Hoyes
CA, CPA, Licensed Insolvency Trustee
CA, CPA, Licensed Insolvency Trustee