Business insolvencies across Canada in 2023 rose to their highest level in 36 years as government supports were pulled back in the wake of the Covid-19 pandemic.
A new report from the Canadian Association of Insolvency and Restructuring Professionals (CAIRP) found that business insolvencies nationwide rose 41.4% in 2023 from the previous year.
That number of business failures marked the biggest annual increase based on 36 years of records from the Office of the Superintendent of Bankruptcy (OSB).
In addition to federal and provincial governments clawing back the financial supports they extended to businesses during the pandemic, many Canadian companies are also struggling with higher debt servicing costs due to a rise in interest rates, noted the report.
In all, 4,810 businesses filed for insolvency in 2023. Newfoundland and Labrador had the highest percentage increase in insolvencies at 141.7%.
British Columbia at 65.4% and Nova Scotia at 55.6% also experienced a high number of business failures in 2023.
The report also noted that consumer insolvencies in Canada increased 23% last year, the fastest rate of increase in 14 years.
A total of 123,000 Canadian consumers filed for bankruptcy last year, with a daily average of 337 people.