New data shows that Canadians are relying on credit more as the cost of living continues to rise, a situation that is leading to a greater number of bankruptcy filings across the country.
Credit reporting agency TransUnion’s latest “Credit Industry Insights Report” found that delinquencies on Canadian credit cards and loans “increased steadily over the last three quarters.”
Much of the increase in missed payments was due to high credit participation and larger balances among Canadian consumers, said the TransUnion report.
Credit usage rose in all Canadian provinces during the fourth and final quarter of last year, with Ontario experiencing the highest increase of credit-active consumers at 3.2%, according to TransUnion.
The total amount of credit held by Canadians reached a record high in the last quarter of 2022 at $2.3 trillion, up 6.8% from the same period a year earlier. The TransUnion report said the increase was driven by high credit card and mortgage balances among Canadians.
Separately, the Office of the Superintendent of Bankruptcy reported that the total number of insolvencies in Canada in January of this year rose by roughly a third compared with a year earlier.
The federal regulator said there were 9,066 insolvencies reported in Canada during the first month of the year, up 33.7% from 6,779 a year earlier.
The number of consumer insolvencies for the month rose 33% compared to a year earlier, while business insolvency filings in January increased 55.4% compared with a year ago.
There were a total of 8,735 insolvency filings by Canadian consumers in January, including 1,859 bankruptcies and 6,876 proposals, according to the Office of the Superintendent of Bankruptcy.
