The numbers aren’t dramatic at first glance — a 2.3 per cent annual increase in consumer insolvencies tempered by a 3.8 per cent dip in filings in the fourth quarter.
But taken together, they tell a story about pressure building quietly for many Canadian households.
New data from the Office of the Superintendent of Bankruptcy (OSB) shows there were 140,457 consumer insolvency filings in 2025 — the second-highest annual total since record-keeping began in 1987, and the highest in 16 years.
While filings eased in the fourth quarter compared to the third, the overall annual total underscores the persistent strain facing consumers.
Hoyes Michalos, a Toronto-based debt relief firm, revealed that the average unsecured debt among insolvent debtors reached $67,496 last year, the highest level since the study began in 2011.
According to their bankruptcy study, Canadians filing insolvency in 2025 carried higher total debt, spread across more accounts, with larger balances.
“Credit card debt in Canada is at record levels, highest it’s ever been by a wide margin, and every other form of debt is also higher,” said Douglas Hoyes, an insolvency trustee at Hoyes Michalos. “Bank loans, car loans, mortgages, everything else is up.”
Hoyes told the Star this is largely a delayed effect of pandemic-era borrowing and government supports winding down, compounded by living costs that are “rising faster than income.”
“During the pandemic, the government created a lot of money. When you create that much money, it creates inflation,” he explained. “It took a couple years. There was a huge time lag of 18 months to two years … and that’s why we are seeing it now.”
While Hoyes Michalos’ study shows homeowners still represent a small share of insolvency filings, a report from the Canada Mortgage and Housing Corporation finds the number of homeowners in Toronto struggling to pay their mortgage each month has more than quadrupled from post-pandemic lows.
Hoyes said he anticipates that homeowner distress will feed into insolvency numbers in the near future, noting that delinquencies usually precede insolvencies.
“What I expect we will see is a continued rise in the number of homeowners who get into financial trouble,” he said, adding that he is “seeing more younger people filing.”
For many young Canadians, the most immediate impact is on day-to-day living costs. Renters and lower-income earners face rising expenses with no asset buffer, while food inflation continues to bite.
“It’s definitely renters filing the most,” Hoyes said. “If you are someone who hasn’t owned stuff … then you’re the one who is getting hurt, because you don’t have the buffer from the rising asset prices, but you’re getting hammered by the rising expenses.”
Hoyes pointed to groceries as a clear example.
“Canada’s food inflation in December was 6.2 per cent higher than the year before … if you are at the lower end of the income scale, you spend a pretty big percentage of your income on food.”
A January report from TD Canada’s Managing Director and Senior Economist Leslie Preston stated that grocery prices in Canada are over 30 per cent higher than they were in 2019.
“Had the pre-pandemic trend continued,” the report states, “that upward pace would have been much slower at only 17 per cent growth.”
With grocery prices rising faster than other major expenses, the average Canadian is now spending more than $1,600 extra per year on groceries compared with pre-pandemic levels.
One person who witnesses these results play out in real time is Meryl Wharton, who has been president of Allan Gardens Food Bank since 2019.
“The year after COVID, we had a spike from 500 people served every week to 1,100 people,” she told the Star, highlighting that the food bank is only open for a total of five hours each week.
And things have only since gotten worse.
In 2025, Allan Gardens Food Bank served 67,171 people — a 158 per cent jump from pre-pandemic levels.
Wharton said many Torontonians who never expected to find themselves relying on food banks now come to her ashamed to ask for help.
“I’d say ‘no, you’re in need, and we’re here to provide food for people who are in need,’” she said.
