Insolvency filings in Canada inflated substantially in December, hitting a level not seen since the Great Recession, according to the latest data from the Office of the Superintendent of Bankruptcy Canada (OSB).
Canadians submitted 10,427 insolvency filings in December, up 13% from the previous year. Over the whole of 2019, insolvency filings went up by 9.3% to reach 140,858, the highest since 2009.
Of the provinces, Ontario reported the highest incidence of insolvency, comprising 3,409 of the filings over the month. For the whole year, around 45,700 filings originated from the province.
The growth in insolvencies, particularly the double-digit gains recorded in some of the provinces, seemed strange, said Daniel Wong, contributing editor at Better Dwelling.
"The country is now seeing the most insolvency filings since the Great Recession. Considering unemployment is near record lows, and a recession is believed to be far off, this is an unusual situation," Wong said in a think piece.
Read more: More women are filing for insolvency in Canada
A recent study from MNP showed that roughly three in 10 Canadians are already insolvent, meaning they are unable to meet all their monthly financial obligations. Furthermore, around 50% of Canadians claim that they are just $200 or less away from being insolvent.
"It is stressful for those who come to the alarming realization that there is no clear path to repay what they have borrowed, no matter the time horizon or interest rate," said Grant Bazian, president of MNP.
Almost half of the Canadians surveyed think they will not be able to cover their ongoing expenses without going into further debt this year.
"Continually financing a lifestyle on credit — particularly on the expectation of rising home prices — is a recipe for trouble," Bazian said. "If debt is causing stress or impacting relationships, it's time to get some support. Don't wait. There is no minimum or maximum debt required to seek help."