Quarterly Report
The State of Canadian Debt — Q1 2026
Last updated: Q1 2026 (January–March) · Next update: July 2026
In Q1 2026, Canadians filed 37,420 consumer insolvency proceedings — a 6.8% increase from Q1 2025. Consumer proposals accounted for 73% of all filings, continuing a decade-long shift away from personal bankruptcy. Rising interest rates and elevated household debt remain the primary drivers.
Key Statistics at a Glance
Total Insolvency Filings
37,420
+6.8% vs Q1 2025
Consumer Proposals Filed
27,317
+9.2% vs Q1 2025
Personal Bankruptcies
10,103
-1.4% vs Q1 2025
Avg. Proposal Amount
$48,200
+3.1% vs Q1 2025
Avg. Proposal Duration
52 months
— unchanged
Proposal Completion Rate
84%
+1 pt vs 2024 annual
Quarterly Comparison
Filing trends over the past year, based on OSB data.
| Metric | Q1 2025 | Q2 2025 | Q3 2025 | Q4 2025 | Q1 2026 |
|---|---|---|---|---|---|
| Total Filings | 35,030 | 36,180 | 35,710 | 36,950 | 37,420 |
| Proposals | 25,020 | 26,050 | 25,830 | 26,780 | 27,317 |
| Bankruptcies | 10,010 | 10,130 | 9,880 | 10,170 | 10,103 |
| Proposal Share | 71.4% | 72.0% | 72.3% | 72.5% | 73.0% |
Regional Breakdown by Province
Insolvency filings by province in Q1 2026, based on OSB data. Ontario and Quebec together account for over half of all filings nationally.
| Province | Total Filings | Proposals | Bankruptcies | YoY Change |
|---|---|---|---|---|
| Ontario | 12,480 | 9,360 | 3,120 | +7.4% |
| Quebec | 8,610 | 5,940 | 2,670 | +5.1% |
| Alberta | 4,870 | 3,650 | 1,220 | +8.9% |
| British Columbia | 4,210 | 3,280 | 930 | +6.2% |
| Manitoba | 1,680 | 1,180 | 500 | +5.8% |
| Saskatchewan | 1,340 | 940 | 400 | +4.3% |
| Nova Scotia | 1,290 | 920 | 370 | +7.1% |
| New Brunswick | 1,080 | 760 | 320 | +5.5% |
| Other (NL, PEI, Territories) | 1,860 | 1,287 | 573 | +4.9% |
Consumer Debt Composition
Average breakdown of debt types among Canadians filing insolvency proceedings in Q1 2026, based on OSB filing data and Bank of Canada household credit reports.
Credit Cards & Retail
32%$22,400
Rising — average credit card balances at record highs
Lines of Credit (unsecured)
27%$18,700
Rising — HELOC readvances increasing as homeowners tap equity
Tax Debt (CRA)
17%$11,800
Elevated — pandemic benefit repayments and self-employment arrears
Auto Loans
13%$8,900
Stable — longer loan terms masking higher principal amounts
Student Loans
7%$5,200
Declining share — 7-year discharge rule limiting inclusion
Other (payday, medical, personal)
4%$2,800
Stable — payday loan usage remains concentrated in lower-income demographics
Note: Mortgage debt is typically excluded from consumer proposals and bankruptcies unless the debtor surrenders the property. Student loans are only dischargeable if the debtor has been out of school for 7+ years.
What’s Driving the Numbers
Interest Rates Remain Elevated
The Bank of Canada's policy rate held at 3.75% through Q1 2026, down from the 5.0% peak but still significantly above the 0.25% pandemic low. Variable-rate mortgage holders and those with lines of credit continue to face higher monthly payments, straining household budgets.
Household Debt-to-Income Ratio Above 180%
Statistics Canada data shows the household debt-to-disposable-income ratio at 182.4% in Q1 2026. For every dollar of disposable income, Canadian households owe $1.82. This ratio has been above 170% since 2016, but the cost of servicing that debt has increased sharply with higher rates.
Consumer Proposals Continue Displacing Bankruptcy
The shift toward consumer proposals — now 73% of all filings — reflects both growing consumer awareness and LIT recommendations. Proposals allow debtors to keep assets, pay a reduced amount, and avoid the stigma of bankruptcy. The average proposal repays 25–35 cents on the dollar over 4–5 years.
Pandemic-Era Supports Fully Unwound
CERB repayments, the end of mortgage deferrals, and resumption of normal CRA collection activity have removed the safety net that suppressed filings in 2020–2022. Many Canadians who deferred financial reckoning during the pandemic are now entering formal insolvency proceedings.
Housing Costs Squeeze Disposable Income
Rent and mortgage costs consume a growing share of household income, particularly in Toronto, Vancouver, and surrounding regions. When housing costs absorb 40%+ of gross income, there is less capacity to service unsecured debt — making insolvency more likely when unexpected expenses arise.
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Methodology
This report draws on publicly available data from the following sources:
- Office of the Superintendent of Bankruptcy (OSB) — Monthly and quarterly insolvency statistics portal. Consumer insolvency filings, proposal and bankruptcy counts by province. Available at ised-isde.canada.ca.
- Canadian Association of Insolvency and Restructuring Professionals (CAIRP) — Quarterly Insolvency Statistics reports with trend analysis and commentary. Available at cairp.ca.
- Statistics Canada — Household debt-to-disposable-income ratios (Table 11-10-0065-01), consumer credit data, and household balance sheet statistics.
- Bank of Canada — Financial System Review, Monetary Policy Report, and household credit aggregates (Table G1).
Figures in this report are rounded for readability. Year-over-year comparisons use the same quarter to account for seasonal variation in filing patterns (Q1 typically sees higher filings as consumers address debt after holiday spending). Regional data may not sum exactly to national totals due to rounding and timing differences in provincial reporting.
Frequently Asked Questions
How often is this report updated?
We publish updated insolvency statistics every quarter, within 4–6 weeks of the quarter ending. Data is sourced from the Office of the Superintendent of Bankruptcy (OSB) and the Canadian Association of Insolvency and Restructuring Professionals (CAIRP).
Why are consumer proposals increasing while bankruptcies decline?
Consumer proposals allow Canadians to repay a portion of their debt while keeping assets like their home and car. As awareness grows and Licensed Insolvency Trustees recommend proposals more broadly, they have become the preferred formal insolvency option — now representing about 73% of all consumer insolvency filings.
What counts as an insolvency filing?
An insolvency filing includes both consumer proposals and personal bankruptcies administered by Licensed Insolvency Trustees and reported to the OSB. It does not include informal debt management plans offered by credit counselling agencies.
How does Canadian insolvency compare to the US system?
Canada's consumer proposal system has no direct US equivalent. The closest US options are Chapter 13 bankruptcy (repayment plan) and Chapter 7 (liquidation). Canada's system is generally considered more debtor-friendly, with higher asset exemptions in many provinces.
What is driving the increase in insolvency filings?
Key drivers include elevated interest rates increasing debt servicing costs, high household debt-to-income ratios (now above 180%), rising cost of living, and the lagged effects of pandemic-era borrowing catching up with consumers as relief programs have ended.
Are insolvency filings back to pre-pandemic levels?
Yes. After a sharp decline during 2020–2021 due to government support programs (CERB, mortgage deferrals, creditor forbearance), filings have now surpassed pre-pandemic levels. Q1 2026 filings are approximately 12% above the Q1 2019 baseline.
Which province has the highest insolvency rate?
On a per-capita basis, Ontario and Alberta consistently lead in insolvency filings. Ontario's high housing costs and Alberta's economic volatility from oil price swings contribute to higher filing rates in those provinces.
Where can I verify these statistics?
All data in this report is sourced from publicly available government and industry sources: the OSB Insolvency Statistics portal (ised-isde.canada.ca), CAIRP quarterly reports, Statistics Canada household debt data, and Bank of Canada financial stability reports.