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.
Updated for March 2022.
2022 Consumer Insolvency Filings
Consumer insolvencies remained flat year-over-year in Ontario and Canada-wide in March 2022, despite a jump from February volumes. A strong month-over-month increase from February to March is not unusual historically and does not indicate a return to high filings, yet. Ontario insolvencies in March were virtually unchanged compared to the prior year while Canadian volumes fell a modest 0.3%.
Bankruptcies were down 12.3% year-over-year in Ontario, and down 18.9% across Canada. Growth in proposals held overall insolvency volumes flat year over year, with Ontario consumer proposals up 3.9% and Canadian proposals up 8.2%.
Consumer proposal statistics
Growth in consumer proposals was modest enough in March to lower the share of proposals as a percentage of all insolvency filings to 78.5%. Proposals continue to be the dominant debt relief option for insolvent Canadians.
Predictions for the coming months
Consumer insolvencies remain at unprecedented lows through early 2022.
While not imminent, we expect an increase in consumer insolvencies in 2022, although likely not until Fall.
As we have said before, it is not how much debt a consumer has, but their capacity to repay that debt and households are seeing dramatically increased budget pressures.
Canada’s inflation rate hit 6.8% in April 2022, with much of the increase hurting basic household budgets. Groceries rose 9.7% in April with meat costs up 10.1%, fresh vegetables up 8.2% and staples like bread up 12.% and pasta up 19.6%. Gas has now surpassed $2 a litre, up 36.3% compared to April last year. This rise in the daily cost of living will add further stress to indebted households.
Consumers with credit capacity will borrow to make ends meet, reversing the trend over the past two years where we saw consumers paying down debt. Those already in debt will begin to miss monthly payments. Both these actions are precursors to an eventual rise in consumer insolvencies. What is unknown, is how much borrowing capacity consumers have to weather this storm.
Canada Revenue Agency has begun aggressive collection activity for CERB overpayment as noted in their May 10, 2022 statement. The Office of the Superintendent of Bankruptcy has also confirmed that CERB ineligibility or overpayments are dischargeable in a bankruptcy or consumer proposal. We continue to expect an increase in collections by the CRA as the interest holiday on outstanding tax obligations ends. This will continue the trend in tax-driven insolvencies we saw in 2021.
For those with variable debt, or renewing mortgages, higher interest rates will lead to higher debt repayment obligations and make it more difficult for indebted homeowners to consolidate consumer credit through their home equity.
Housing prices have fallen in many markets although not enough to impact consumer insolvencies yet. Our Homeowners Bankruptcy Index remained low at 1.3% in April 2022. A dramatic drop in house prices, however, will lead to higher consumer proposals.
Ontario Consumer Insolvency Statistics by Region 2021
COVID-19 continued to have an unusual impact on consumer insolvencies in 2021. Ontario insolvencies ended the year down 10.8% and Canadian consumer insolvencies declined 6.6%.
In total, 30,327 Ontarians across Ontario filed for insolvency in 2021. Personal bankruptcies fell 17.7% and consumer proposals declined 8.2%. Proposals as a share of Ontario insolvencies increased to 75% in 2020, from 73% in 2020.
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||1,902||-13%||-9%||-14%||77%|
|Newmarket & Area||574||-14%||-8%||-16%||75%|
|North Bay Region||342||-17%||9%||-26%||67%|
|Orangeville & Area||234||-8%||-31%||-2%||84%|
|Parry Sound-Huntsville Region||205||-15%||-28%||-9%||75%|
|Sault Ste. Marie Region||327||-8%||-28%||10%||63%|
|Thunder Bay Region||505||8%||-24%||40%||65%|
|*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