Consumer Bankruptcy Filings Rise As Higher Interest Rates Take Hold Across Canada

The number of bankruptcies in Canada is on the rise.

According to the Ottawa-based Office of the Superintendent of Bankruptcy (OSB), the number of consumers seeking debt relief jumped 5.1% to 11,320 in November from a year earlier. October and November combined saw 22,961 consumer insolvency filings, the most for those two months since 2011.

The increase in bankruptcy filings is being blamed on higher interest rates that are leading to rising borrowing costs for Canadian households. The Bank of Canada has lifted its key lending rate five times since mid-2017. Policy makers, who meet this week to determine their next move on rates, are closely monitoring the impact of higher borrowing costs on the economy and Canadian consumers.

On a year-over-year basis, bankruptcy filings during October and November were up in every province except Prince Edward Island, which was unchanged, according to the OSB. Alberta was the hardest hit, with the number of insolvencies rising 16% from autumn 2017. About 66% of Ontario bankruptcy filings in November were made by consumers, which is the highest share on record.