The number of businesses in Canada that filed for bankruptcy during this year’s second quarter rose 41% from a year earlier.
Data from the Canadian Association of Insolvency and Restructuring Professionals (CAIRP) shows that 1,541 businesses across the country filed for bankruptcy between April and the end of June this year, an annualized increase of 41.4%.
The sharp rise in business bankruptcies continues a trend that has been ongoing across Canada since the Covid-19 pandemic ended in late 2022.
Many businesses in Canada suffered steep financial losses and took on debt during the pandemic, a situation that they have not been able to overcome.
At the same time, government financial supports that were extended to businesses large and small during the pandemic have since been clawed back or unwound.
While the number of business bankruptcies continues to rise on an annualized basis, insolvencies did decline 23% from the previous first quarter of the year, said CAIRP.
The situation among Canadian consumers is equally bad, with 35,082 individuals filing for bankruptcy during Q2 of this year, an increase of 12.4% from a year earlier and a four-year high.
CAIRP said Canadian households continue to struggle with high living costs and high debt levels, leading to a sharp rise in bankruptcies.
The last time the number of individual Canadians filing for bankruptcy surpassed 35,000 was in the fourth quarter of 2019 before the Covid-19 pandemic struck.