Volume of Insolvency Filings
In 2021, a total of 92,572 insolvencies were filed with the Office of the Superintendent of Bankruptcy (OSB), representing a 6.7% decrease from 2020 and the lowest volume of insolvencies since 1995. The decrease continues the decline in insolvencies witnessed since the onset of the Covid-19 pandemic. Consumer insolvencies decreased from 137,178 filings in 2019 to 96,458 filings in 2020 and 90,092 in 2021. The share of proposals among consumer insolvency filings grew by 3.6% from 65.9% in 2020 to 69.5% in 2021. Business insolvencies decreased from 3,680 filings in 2019 to 2,786 filings in 2020 and 2,480 in 2021.
In 2021, the Canadian economy began to recover from the Covid-19 pandemic. The Canadian real Gross Domestic Product (GDP) increased by 4.0% in 2021, up from a decrease of 5.2% in 2020Footnote 1. The unemployment rate declined from 9.5% in 2020 to 7.5% in 2021, and the participation rate increased from 64.1% in 2020 to 65.1% in 2021, only 0.5% below the 2019 rate of 65.6%Footnote 2. The easing of some Covid-19 restrictions and the subsequent increase in consumer demand, along with disruptions to global supply chains, increased the price of goods and services. Accordingly, the consumer price index rose 3.4% in 2021, the highest increase since 1991Footnote 3. According to Statistics Canada, the household debt service ratio was 13.6%, a 0.1% increase from 2020Footnote 4. The Bank of Canada maintained a lower limit of 0.25% for the overnight rate throughout 2021Footnote 5. Additionally, the Government of Canada continued to provide financial supports, with the nature of some of the supports shifting throughout the year. One example is the Canada Emergency Wage Subsidy which was replaced in October 2021 with two new programs offering wage and rent support.Footnote 6
Demographics at a Glance
The decline in volume of consumer insolvencies was fairly uniform across age and gender groups. All age and gender groups saw a decrease in volume.
The change in the percentage share of insolvency filings from 2020 to 2021 is as follows:
- Ages 18 to 34: increase from 24.2% to 25.1%
- Ages 35 to 49: decrease from 37.1% to 36.1%
- Ages 50 to 64: decrease from 26.8% to 26.1%
- Ages 65 and over: increase from 11.9% to 12.7%
The share of insolvency filings by women increased from 48.2% in 2020 to 49.4% in 2021, an increase of 1.2%. This is the largest percentage share of filings by women on record. Correspondingly, filings by men decreased from 51.8% to 50.6%.
Statistics Canada estimated Canada's population to be 38,246,108 on July 1, 2021, an increase of 208,904 from the previous year. This represents a growth rate of 0.6% in 2021. The population growth rate has slowed down in each of the past two years. The proportion of seniors aged 65 and older continues to grow from 18.0% in 2020 to 18.5% in 2021. Other age groups experienced minimal changes in 2021. The proportion of women and men in the Canadian population remained unchanged at 50.3% and 49.7% respectivelyFootnote 7.
Regions at a Glance
From 2020 to 2021, Ontario, Quebec and the Atlantic provinces each saw a decline of roughly 11% in consumer insolvencies.
The provinces with the largest decreases in the volume of consumer insolvencies were:
- Ontario: 3,665 fewer filings (−10.8%)
- Quebec: 3,016 fewer filings (−11.3%)
Alberta and British Columbia experienced the largest increases in volume of consumer insolvencies:
- Alberta: 867 more filings (6.6%)
- British Columbia: 429 more filings (5.2%)
In 2021, all provinces experienced a decrease in business insolvencies, except Prince Edward Island and Newfoundland and Labrador which saw a combined increase of 4 filings (33.3%). The three provinces with the largest decreases in the volume of business insolvencies were:
- Ontario: 146 fewer filings (−19.3%)
- Quebec: 69 fewer filings (−4.3%)
- British Columbia: 54 fewer filings (−42.2%)
Across Canada, all provinces and territories are recovering from the Covid-19 pandemic. In 2021, the Canadian unemployment rate decreased by 2.0%. All provinces saw a decrease of 1% to 3% in the unemployment rate in 2021 and an increase of 0.2% to 2% in the participation rateFootnote 8. Estimates indicate that all provinces experienced an increase in real GDP growth in 2021. The increases range from 2.3% in Prince Edward Island to 6% in Quebec and AlbertaFootnote 9. In addition to federal government supports, provinces and territories have continued to provide assistance such as grants, rebates and paid leave to help Canadians and businesses bounce back.
Industry at a Glance
The total number of business insolvencies in 2021 decreased by 11.0% from 2020.
The three sectors that registered the largest decreases in the number of insolvencies were:
- Retail Trade: 122 fewer filings (−32.4%)
- Accommodation and Food Services: 74 fewer filings (−16.8%)
- Arts, Entertainment and Recreation: 49 fewer filings (−41.9%)
The three sectors that saw the largest increases in the number of insolvencies were:
- Construction: 31 more filings (9.2%)
- Transportation and Warehousing: 26 more filings (15.9%)
- Administrative and Support, Waste Management and Remediation Services: 25 more filings (20.8%)
Industries are recovering from the Covid-19 pandemic at different rates. In 2021, all sectors saw an increase in GDP growth rate, except for the following:
- Management of companies and enterprises (−26.4%)
- Agriculture, forestry, fishing and hunting (−8.1%)
- Utilities (−1.4%)
The three sectors with the highest increases in GDP growth rate were:
- Accommodation and Food Services (14.2%)
- Health care and social assistance (9.0%)
- Mining, quarrying, and oil and gas extraction (8.9%)Footnote 10
In 2021, the federal government continued to support the Canadian economy by providing businesses with access to credit and rent and wage subsidies, as well as launching a variety of financial support programs specific to the sectors most affected by the pandemicFootnote 11.
- Tables 1–3
- Table 4
- Table 5
- Table 6
- Tables 7 and 8
- Tables 9–11