Navigating Insolvencies in 2024

About this virtual conference

On March 20, 2024, we hosted a virtual conference focused on navigating insolvencies in the coming year, presented to the Business Development Bank of Canada (BDC). In this insightful session, I had the privilege of interviewing Mr. Maxime Lemerle, the Lead Analyst for Insolvency Research at Allianz-Trade, as we explored the resilience of Canadian entrepreneurs in the aftermath of COVID-19.

The pandemic’s immediate effects have waned, and with government support now a thing of the past, we sought to understand how Canadian businesses have been adapting and what the insolvency landscape looked like throughout 2023. 

During the conference, Maxime Lemerle provided a comprehensive analysis of the insolvency trends affecting Canadian businesses. Here are some of the critical highlights and insights shared:

Significant Increase in Insolvencies

There was a major acceleration in business insolvencies in 2023, marking a double-digit increase of 41%. This rise followed another significant increase of 35% the previous year, bringing insolvency rates well above pre-pandemic levels. After two decades of generally lower rates, 2023 saw insolvencies 31% above the average of 2015-2019, reaching a 13-year high.

Regional Differences in Insolvency Rates

The trend of increasing insolvencies was broad-based across 13 regions, with Prince Edward Island being the only exception in 2023. The major contributors to the rise were Quebec (60%), Ontario (30%), British Columbia (5%), and Alberta (4%), with these four regions accounting for 96% of the total number of cases. Quebec was notably the outlier, with 2,256 cases in 2023, representing 61% of the national count and marking a significant increase from less than 45% before 2012 to more than 60% since 2020. British Columbia and Ontario saw slight increases in their shares since 2020, while Alberta experienced a slight decrease.

Comparison with Pre-Pandemic Levels

When comparing with pre-pandemic levels, British Columbia and Ontario were significantly above, with BC being 53% above the 2015-2019 average and Ontario 40% ahead. Quebec closely followed, while Alberta showed more resilience. The rest of the regions remained below pre-pandemic levels.

This analysis provides a clear picture of the challenges and changes in the Canadian business landscape post-COVID-19. The cessation of government grants has indeed impacted businesses, leading to a notable increase in insolvencies, particularly in specific regions like Quebec, Ontario, and British Columbia.

Moving Forward

Understanding these trends is crucial for entrepreneurs and business leaders as they navigate the uncertain waters of post-pandemic recovery. The insights offered by Maxime Lemerle during our conference are invaluable for planning and strategizing in the face of these challenges. 

This insightful session is part of our ongoing commitment to providing valuable perspectives that can help entrepreneurs and business leaders strategize for the future. For those who missed the earlier sessions, we invite you to review the conference materials available on our website for a comprehensive understanding of this evolving landscape.

For further details

For those looking for further details or who have additional questions, Jocelyn St-Onge from Allianz-Trade Canada and I, Roch Simard, are readily available as resources to assist you.

We extend our gratitude to Maxime Lemerle for his expert analysis, to Véronik Ménard and her team at the BDC for facilitating this important discussion, and to all the participants who joined us for this conference. It’s through these collaborative efforts that we can equip ourselves with the knowledge and tools needed to thrive in the evolving business landscape of 2024 and beyond.