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.
Monthly Trends 2020 Consumer Insolvency Filings
These statistics are updated monthly based on data released by The Office of the Superintendent of Bankruptcy. The OSB data is released at the end of the month and is generally two months in arrears.
Sixth months after plummeting, consumer insolvencies continue to show little sign of returning to pre-pandemic norms. Ontario consumer insolvencies were 33.2% lower in October compared to October 2019, slightly more than the year-over-year decline in September. October consumer insolvencies across Canada were down 38.4%.
While individuals file insolvency to deal with high debt levels, the decision to file is based on two triggers: budget constraint and creditor actions. Both of these pressure points remain low.
Government support programs including expanded EI and CRB continue to prevent job losses from triggering household income reduction. Creditors have returned to enforcing collection, but even that remains at a reduced pace. While the courts are now open and collection agencies have returned to work, EI and CRB cannot be garnisheed, removing one more pressure point to file.
It is our expectation that consumer insolvencies will remain below historical norms until the economy shows signs of a stronger and more permanent rebound. We expect consumer bankruptcies and proposals will remain depressed into the spring after which we anticipate a strong resurgence. While the pressure to file today is low, Canadians – especially middle-income earners – will feel the debt hangover from COVID-19 for years to come.
Of note, the share of consumer proposals as a percentage of total insolvencies in Ontario reached a record high of 76%. Those who are filing are working. High income that results in additional surplus income payments in a bankruptcy, and home equity, are the two primary reasons why heavily indebted consumers are increasingly choosing a proposal over bankruptcy.
Ontario bankruptcies declined by 47.9% and consumer proposals fell 26.6%. Across Canada, proposals were down 33.0% and bankruptcies declined 46.9%.
Our Homeowners Bankruptcy Index, rebounded slightly in November to 5.1%.
While mortgage deferrals are ending, the impact on personal insolvencies is unlikely to be felt for several months. Homeowners who deferred mortgages will see their monthly mortgage payment rise, however, deferrals helped many build up a buffer in savings that will continue to buy them time. Combine this with a still, relatively, strong housing market and homeowners with debt are still able to kick the can down the road.
Consumer Insolvency Statistics Ontario 2019
Total insolvencies filed by Ontario consumers rose 15.4% in 2019 according to data released by the Office of the Superintendent of Bankruptcy.
In total, 44,852 hardworking individuals filed insolvency in Ontario in 2019.
Personal bankruptcies fell 0.6% while consumer proposals increased by 25.1%.
In 2019, 67% of consumer insolvencies filed in Ontario were consumer proposals. Heavily indebted consumers with high income and high asset values turn to a consumer proposal as a way to avoid high surplus income payments in a bankruptcy and keep their home. In 2019, homeowners were not a significant driver of consumer proposals. Instead, indebted homeowners have relied on their home equity to refinance their credit card and other debt through a second mortgage, HELOC or debt consolidation loan.
The increase in proposals in 2019 is more a reflection of strong employment conditions in Ontario. Insolvent debtors with a household income above the government-mandated thresholds limits are more likely to choose a consumer proposal as an alternative to bankruptcy in order to spread potential surplus income payments over a period of up to five years.
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.
You can learn more about how much debt it takes to file bankruptcy on our interactive graphic: Regional Consumer Debt & Bankruptcy which shows total insolvencies, average consumer debt levels, and debt-to-income by region.
|Consumer Insolvencies||Total Growth||Growth Bankruptcy||Growth Proposal||% Proposals|
|City of Toronto||2,604||17%||-3%||28%||71%|
|Newmarket & Area||861||27%||13%||35%||68%|
|North Bay Region||596||11%||-6%||21%||66%|
|Orangeville & Area||353||15%||-3%||25%||72%|
|Parry Sound-Huntsville Region||420||6%||0%||8%||69%|
|Sault Ste. Marie Region||459||11%||1%||30%||39%|
|Thunder Bay Region||572||5%||-1%||15%||44%|
|*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