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.
Below you will also find commentary on the most recent annual consumer proposal and bankruptcy statistics by region for 2018.
Monthly Trends 2019 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.
Growth in Ontario insolvencies slowed in November to 12.2% compared to the same month last year. Year-to-date growth is now up 15.5%.
Canadian insolvencies increased just 4.4% year over year in November. Year-to-date insolvencies are up 9.2% Canada-wide.
Of note, proposals as a percentage of all personal insolvencies in Ontario reached another record high of 71.0%. Ontario consumer proposals rose by 20.8% and bankruptcies declined by 4.5%. Canada-wide proposals accounted for 62.1% with bankruptcies declining 3.6% while proposals increased 10.0%.
Sustained household earnings in a low unemployment environment, combined with high levels of consumer debt, make consumer proposals the debt relief of choice for insolvent debtors. 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.
Our 2019 year-end review provides some perspective on why insolvencies are increasing so rapidly.
Ontario has posted double-digit growth in 10 of the last 12 months and the 3-month moving average pace is 20.9%, while the 3-month growth rate for Canadian insolvencies is 12.4%.
The majority of consumer insolvencies in Ontario continue to be filed by non-homeowners as seen by the relatively flat trend in our Homeowner’s Bankruptcy Index. Non-homeowners with high consumer debt are increasingly unable to sustain their monthly debt payments yet do not have the equity capacity of homeowners to refinance.
To understand how annual and economic cycles affect consumer insolvencies see our article on the seasonality of consumer insolvencies.
Ontarians are burdened by too much personal debt, and their individual ability to manage that debt is now being impacted by rising interest rates, changing home equity and individual factors that affect their ability to maintain their interest payments and access further credit.
A prolonged period of low-interest rates and rising home equity have combined to help most Ontarians keep ahead of their debt payments. This has led to a prolonged decline in consumer insolvencies in the province to date.
Higher overall debt levels, however, remain a concern, and a change for the worse in any of these economic conditions will lead to increased loan default and, ultimately, higher insolvency rates.
Low-interest rates and strong employment have helped restrain consumer insolvencies in Ontario over the past year. As housing prices have increased, the attractiveness of debt consolidation over insolvency as a debt restructuring mechanism has helped temper the growth in Ontario consumer insolvencies despite record debt levels. However, even a small negative change in economic conditions could trigger a shift towards a stronger growth trend for consumer insolvencies in Ontario as we saw happen in several western provinces in Canada in 2016.
Consumer Insolvency Statistics Ontario 2018
Total insolvencies filed by Ontario consumers rose 1.8% in 2018 according to data released by the Office of the Superintendent of Bankruptcy.
To see insolvency statistics, consumer debt and debt-to-income ratio by city & region across Ontario, see our Interactive Consumer Debt and Bankruptcy Statistics Map
In total, 38,856 hardworking individuals filed insolvency in Ontario in 2018.
Personal bankruptcies fell 4.4% while consumer proposals increased by 6.0%.
In 2018, 62% 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 2018, 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 2018 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 also see this information in an interactive consumer debt map which shows total insolvencies, average consumer debt levels, and unsecured debt-to-income by region.
|Consumer Insolvencies||Total Growth||Growth Bankruptcy||Growth Proposal||% Proposals|
|City of Toronto||2,220||-1%||-13%||6%||65%|
|Newmarket & Area||680||8%||-4%||16%||64%|
|North Bay Region||539||7%||-7%||20%||60%|
|Orangeville & Area||306||10%||0%||15%||66%|
|Parry Sound-Huntsville Region||398||-2%||-20%||10%||67%|
|Sault Ste. Marie Region||414||-3%||-8%||11%||34%|
|Thunder Bay Region||544||8%||15%||-1%||40%|
|*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