For both households and businesses, insolvency activity declined in 2021, according to new data from the federal Office of the Superintendent of Bankruptcy (OSB).
The OSB reported that total insolvencies in Canada were down by 6.7% in calendar 2021, compared with the previous year.
Consumer insolvencies declined by 6.6% year over year, and business insolvencies were down 11.0% over the same period.
In the consumer sector, bankruptcies were down particularly sharply, declining by 16.5% from the previous year.
Consumer proposals, which make up the majority (69.5%) of consumer insolvency activity, declined by just 1.5% from the previous year.
Among businesses, the retail, accommodation and food services sectors led the decline in insolvency activity in 2021, the OSB said. Firms in the construction, transportation and warehousing sectors saw the biggest increase in insolvencies.
Despite the overall drop in business insolvency activity last year, insolvencies were notably higher in December 2021 compared with the same month in 2020 — the OSB reported that monthly business insolvency numbers were up 26.7% from last year.
By comparison, consumer insolvencies were down by 7.7% in from December 2020 to 2021.
The OSB also reported that bankruptcies and consumer proposals were down by 15.7% in the month of December, compared with November.