More Canadians are falling behind financially and turning to insolvency proceedings as high living costs and debt pressures continue to weigh on households across the country.

Recent figures highlighted by Financial Post’s Posthaste column show insolvency filings in Canada have climbed to levels not seen since the 2008-09 Great Recession. Consumer proposals, bankruptcies and other forms of debt relief have increased as many households struggle to keep up with rising expenses and higher borrowing costs.

The report noted that many Canadians built up debt during years of low interest rates, but the sharp increase in borrowing costs over the past two years has made it harder for families to manage mortgage payments, credit card balances and other loans. Higher food prices, rent and utility bills have also added pressure to monthly budgets.

Licensed insolvency trustees have reported growing numbers of middle-income Canadians seeking help.

Younger adults, renters and households carrying large amounts of unsecured debt have been among the hardest hit.

While inflation has slowed from earlier peaks, many essentials still cost far more than they did before the pandemic. Wage growth has not fully matched those increases for many workers, leaving less disposable income at the end of the month.

Economists have also pointed to slower economic growth and weaker job conditions in some sectors as factors contributing to financial strain. Higher interest rates introduced to control inflation have increased costs for both consumers and businesses.

Consumer proposals continue to make up the majority of insolvency filings. These arrangements allow people to negotiate repayment plans with creditors while avoiding bankruptcy. However, bankruptcy filings have also increased in several regions.

Financial experts say household debt levels in Canada remain among the highest in developed countries, leaving many families vulnerable to economic shocks or unexpected expenses. Rising housing costs in many communities have further reduced financial flexibility for both homeowners and renters.

The increase in insolvencies is being viewed as another sign of ongoing stress in the Canadian economy, particularly for households already facing tight budgets and limited savings.

According to the report, insolvency activity is now approaching levels last seen during the financial crisis more than 15 years ago, reflecting the continued impact of inflation, high interest rates and elevated living costs on Canadian families.