Business Bankruptcies: How Do Quebec and Ontario Compare?

In 2024, business bankruptcies spiked across Canada. The Canada Emergency Business Account (CEBA) loan deadline in January certainly played a major role. But businesses have continued to file for bankruptcy well into the year, especially in Quebec.

In fact, Quebec has seen persistently higher business bankruptcy rates than other Canadian provinces, notably Ontario. This Economic Viewpoint explores the many reasons for this insolvency gap.

There are two reasons that are purely economic: the industry breakdown for each province and the fact that Quebec’s economy has been weaker than Ontario’s recently.

But there are other, less tangible factors at play as well. Because even if we adjust for Quebec’s different industrial structure and asynchronous economic cycles, the province still has a higher bankruptcy rate than Ontario, regardless of sector or time period. Something in the business ecosystem is contributing to this gap.

It’s also worth pointing out that Quebec has a lower business closure rate than Ontario (and than the Canadian average), suggesting that businesses in Quebec are more likely to officially declare bankruptcy than choose an alternative form of closure.

This means that we can’t look at business bankruptcy data in a vacuum. It’s only giving us part of the story. And once you account for total business closures, only a small proportion of which result from bankruptcies, Ontario’s situation loses its lustre—the business closure rate is actually higher than it is in Quebec.