Consumer and business insolvency cases increased significantly in the second quarter due to rising interest rates, the Office of the Superintendent of Bankruptcy said Thursday.
The agency said the 31,224 consumer insolvencies in the April-June period were up 23.5% from the same period last year, while business insolvencies increased by 36.9% to 1090.
For the month of June, the total number of insolvency files increased by 19.6% compared to the same month in 2022, but decreased by 2.8% compared to May.
The total number of insolvency files for the 12-month period ending June 30 was 116,653, which represented a 23.2% increase from the previous period.
The Canadian Association of Insolvency and Restructuring Professionals observed that interest rate hikes increase pressure on businesses as they face higher costs and weaker consumer demand.
According to the group, consumer insolvency cases are steadily increasing and reaching levels comparable to pre-pandemic levels, and it expects them to exceed pre-pandemic averages later this year.
