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How your credit union can support members who may be struggling with post-COVID credit planning

How your credit union can support members who may be struggling with post-COVID credit planning

4 Minute Read

Consumer and corporate insolvency are on the rise in the post-COVID environment. Discover the most recent findings on corporate and consumer insolvency and learn how to identify the warning signs of financial stress to understand how you can best support your credit union’s membership.

Senior Vice President

The post-pandemic economic recovery initially exceeded expectations, particularly in Western Canada, which benefitted from high commodity prices. However, Canadians now find themselves in an extremely challenging economic environment plagued by rampant inflation, high interest rates, and heightened residual debt loads.

Additionally, companies continue to face ongoing supply disruptions and labour shortages. While Alberta and Saskatchewan are expected to fare better than some other Canadian provinces in the predicted economic downturn, companies will need to proactively deal with these challenges in order to chart the best path forward for their business.

For small and medium-sized enterprises (SMEs), these challenges may be brought to a head as Canada Emergency Business Accounts (CEBA) loans or other pandemic-related indebtedness come due and enforcement activities by the Canada Revenue Agency and financial institutions alike are gaining momentum. 

Following is a summary of consumer and corporate insolvency filings — along with warning signs of financial distress — to help keep you informed and to assist you in supporting your corporate and consumer members.

Consumer and corporate insolvency filings

Consumer and corporate filings, which significantly decreased during the COVID-19 pandemic, are on the rebound. Below are the reported filings of consumer and corporate bankruptcies, proposals, and CCAA proceedings for the twelve-month period ended June 30, 2023, and for corporate receiverships for the 2022 year (all as reported by the Office of the Superintendent of Bankruptcy).

Consumer Insolvencies 12 months ended June 30, 2022 12 months ended June 30, 2023 % Change 
Total filings 91,818 112,694 +23%
Consumer Bankruptcies 25,301 25,311 NIL
Consumer Proposals 66,517 87,383 +31%


Corporate Insolvencies 12 months ended June 30, 2022 12 months ended June 30, 2023 % Change 
Bankruptcies (corps.) 1,819 2,475 +36%
Proposals (corps.) 344 463 +35%
CCAA* 22 58 +260%


Corporate Receiverships 2022 2021 % Change
Receiverships 219 286 -23.4%


*The Companies’ Creditors Arrangement Act is available as a restructuring alternative to insolvent corporations with debt of more than $5 million.

** The corporate insolvency statistics provided represent filings by corporations only.

Some of the key trends noted for consumer and corporate filings are summarized below:


  • Consumer filings increased by 23 percent overall during the twelve-month period ended June 30, 2023, as consumer debtors attempted to address unsustainable debt levels and chart a path forward. While consumer bankruptcy filings remained consistent with the prior year, consumer proposals were up 31 percent for the same period. While proposals are often a preferred choice for consumers, this may also be indicative of a larger number of debtors filings because of a decline in household income and a desire to preserve non-exempt assets (such as the equity in their home, where it exceeded the prescribed provincial exemption).
  • While demographic information has not yet been released for the first half of 2023, the increase in consumer filings during 2022 was the largest (at 36 percent) for consumer debtors between the ages of 35 and 49. Provincially, the largest filing increases were in Ontario, Quebec, and British Columbia.
  • MNP’s Consumer Debt Index was updated in July 2023 and reflects Canadians’ concern about debt and their ability to pay their bills at an all-time high, with 52 percent of Canadians indicating that they regret the amount of debt they have taken on in life and 48 percent indicating that they are concerned about their current level of debt. Seventy-three percent of Canadians say their weekly spending on essentials has increased by at least $100 compared to the prior year, reflecting ongoing inflationary pressures.


  • Corporate insolvencies reported record lows in 2021 due to the COVID-19 pandemic and the ongoing prevalence of government relief programs. However, filings increased steadily in 2022 and into the first half of 2023. Further increases are expected during the second half of 2023, with reported corporate insolvencies increasing by 37 percent in July 2023 compared to the prior year. Anecdotally, Licensed Insolvency Trustees (LITs) across the country are reporting increased activity, and many lenders are communicating an increasing need for third-party support in dealing with troubled accounts.
  • While the Office of the Superintendent of Bankruptcy has not yet released statistics on receiverships for the first half of 2023, an increase is expected over the prior year reflecting increased enforcement activities (receiverships are usually creditor-driven proceedings).
  • The largest number of filings for the twelve-month period ending June 30, 2023, were reported in accommodation and food services, retail, trade, and construction industries.

What are the warning signs of financial distress?

Below are some indications that your member’s business may be struggling and how we can offer support to help them move forward toward a resolution.

Do you have a member business that is:

  • Struggling with necessary changes to its business strategy? We can offer an independent view of the business and provide alternatives.
  • Facing unexpected turnover or a lack of required financial expertise? We can provide temporary or ongoing support to ensure nothing falls through the cracks.
  • Underperforming? We can identify and support opportunities for performance enhancement.
  • Facing limited options for refinancing or obtaining new funding? We can challenge the status quo to clarify corporate strategy and provide insight into expected lender risk tolerances.
  • Struggling to achieve an exit or succession plan? We can help clarify short- and long-term objectives and develop a plan to meet both.
  • Facing litigation that puts their business at risk? We can ask the tough questions and support the development of a strategy to help the business move forward.
  • Unable to generate accurate and timely reporting? We can ensure management understands reporting requirements and can assist in the development of required forecasts.

Credit Unions 

Credit unions play a key role in Canada’s financial system. We’re here to help you navigate this dynamic industry, empowering you to stay competitive and profitable.

How we can help

Making sure that your members have access to professional advice can help to solidify their relationship with your credit union and ensure the ongoing success of their business. MNP is here to assist your credit union, its members, and their businesses navigate periods of financial distress to help them achieve a sustainable future.

Reach out to our Corporate and Consumer Insolvency teams to learn more about the various levels of support our team can provide, ranging from business reviews that provide an impartial assessment of the financial position and outlook of your members to formal restructuring and liquidation proceedings.

Contact Vanessa Allen, CIRP, LIT at [email protected] for more information.


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