Consumers Holding On as Canadian Insolvencies Driven by Proposals Rather Than Bankruptcies, BMO Says

07:31 AM EDT, 10/01/2026 (MT Newswires) -- Canadian consumer insolvencies have risen from pandemic-era lows, but the increase may overstate the deterioration in household finances given the country's significant population growth since COVID-19, according to BMO Capital Markets in a note. "The per capita rate has returned to pre-pandemic norms, so not exactly ringing alarm bells just yet," wrote BMO Senior Economist Shelly Kaushik in Wednesday's note. The rise has been driven largely by consumer proposals, while bankruptcies historically accounted for most insolvency filings, added Kaushik. Consumers who file proposals can typically repay part of their debt under revised terms while retaining more assets than they would in bankruptcy. The trend suggests households are absorbing the impact of earlier rate hikes, trade uncertainty and higher energy costs, easing some pressure as financial conditions tighten, said BMO. The key question is how households will continue to adjust as the economy absorbs the combined effects of tariff and energy shocks, putting consumer resilience to a further test, added the bank.