The number of corporate bankruptcies in Canada reached its highest level in ten years in the third quarter of 2023 compared to the same quarter last year (+41.8%).
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This is what the Canadian Association of Insolvency and Reorganization Professionals (CAIRP) observed, according to a report released Monday.
In total, there were 1,129 application submissions in the third quarter of 2023.
Enrollment was well above pre-pandemic levels, increasing 36.5% compared to the same quarter in 2019.
“Many companies have emerged from the pandemic already over-indebted and are now struggling with rising borrowing costs, limited access to capital and high inflation that is driving up prices. The fact that some of them, especially in sectors with direct customer contact, are experiencing serious difficulties is inevitable,” explained André Bolduc, President of the Board of Directors of ACPIR.
An increase also among consumers
The number of consumer bankruptcy filings increased 17.8% in the third quarter of 2023 compared to the same quarter last year.
According to the Office of the Superintendent of Bankruptcy and CAIRP, a total of 30,471 Canadians filed for bankruptcy in the third quarter of 2023.
“Consumer bankruptcies have increased significantly compared to last year, reflecting an upward trend that has continued for six consecutive quarters, bringing them closer to levels observed before the pandemic,” Mr. Bolduc explained.
“Many are struggling to survive amid rising prices of essential goods and are temporarily borrowing more to make ends meet, but this situation eventually becomes unmanageable,” he said.