Business insolvencies leap higher in January from a year earlier, led by bankruptcies

OTTAWA — Business insolvencies more than doubled in January compared with a year earlier as they also surpassed pre-pandemic levels for the month. 

The Office of the Superintendent of Bankruptcy says there were 759 business insolvencies in January, up 42.4 per cent from December and up 129.3 per cent from January 2023. 

That compares with 308 in January 2020, before the pandemic began. 

Business insolvencies include bankruptcies and proposals (where some or all of the debt is paid back). 

The biggest increases this January were in accommodation and food services, retail trade, and construction. 

Business bankruptcies also rose more sharply year-over-year than proposals. 

Consumer insolvencies increased in January, but not nearly as sharply. They grew by 23.5 per cent year-over-year and remained lower than in January 2020. 

Business and consumer insolvencies have been on the rise for a while, coming up from pandemic-driven lows. 

Business insolvencies were up 41.4 per cent in 2023 compared with 2022.

The Canadian Association of Insolvency and Restructuring Professionals said in a February press release that companies are struggling with pandemic debt and higher interest rates.

Slower consumer spending is also weighing on businesses, the association said, as Canadians continue to grapple with higher prices and interest rates.