Consumer Bankruptcies in Canada - A Short History

In Canada, from 1958 to 1971, the consumer bankruptcy rate was at a fairly constant level, and, for a modern industrialized country, the bankruptcy rate was at a very low level.  For example, in 1968, Canada had six (6) bankruptcies per 100,000 population.  The United States, in 1968, had ninety (90) bankruptcies per 100,000 population.

A special joint committee of the Senate and House of Commons on consumer credit, under the joint chairmanship of Senator David A. Croll and Ron Basford, MP, had finished hearing briefs and had tabled its report in 1967.  In 1970, the Tasse report on bankruptcy and insolvency was presented, and, in 1971, a special Senate committee on poverty, under the chairmanship of Senator David A. Croll, was hearing about the problems of low income individuals from coast to coast.  For the first time, members of those committees heard of the human tragedy of people and families trapped in impossible debt situations with no relief available.  In 1972, in response to recommendations in each of these reports, the Federal Government started the Poor Debtors' Assistance Program.  In the period from 1972 to 1981, the bankruptcy rate rose steeply.

In 1982, the consumer bankruptcy rate jumped dramatically from 23,000 in 1981 to more than 30,000.  This 33% increase over the previous year was caused by the severe worldwide recession.  From 1983 to 1985, the bankruptcy rate in Canada fell in response to the strengthening economy.  Since 1985, the consumer bankruptcy rate has risen steeply, hitting record numbers in 1997 and then declining slightly in 1998. 

In 2004, the consumer bankruptcy rate in Canada was 2.7 per 1,000 population.  This compares with the U.S. bankruptcy rate for the same period of 7.7 per 1,000 population.  British Columbia has the lowest consumer bankruptcy rate of any region in Canada at 2.0 bankruptcies per 1,000 population.