Canadian Insolvencies Surge To Second-Highest June On Record

Canadian credit problems continue to emerge, conflicting with the narrative of improvement. Office of the Superintendent of Bankruptcy Canada (OSB) data shows insolvency filings climbed in June. The month marked the sixth straight year of growth, and the second-most filings on record. What Are Insolvencies? Just so we’re all on the same page, let’s talk about what insolvencies are and are not. They’re formal filings for credit relief made with the OSB, with the help of a Licensed Insolvency Trustee (LIT). The data includes both businesses and consumers, covering bankruptcies and consumer proposals. The option pursued depends on the amount of debt, assets at stake, and how far the borrower falls behind. Insolvencies are often thought to be a sign of a worsening economy, but that’s not necessarily the case. Filings are made after years of accumulating debt, juggling repayment strategies, and missing payments. They’re known in finance as a lagging indicator, revealing what’s already happened. Growth in filings is validating pressure that was already present and likely dismissed. Interpreting what the data means is tricky, but it’s best viewed in context. That means the trend is more i...