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Business Insolvencies

Financially distressed businesses can file for a bankruptcy or a proposal, which together is classified as insolvency.


A business that enters a formal process, or against whom an order has been made to sign over their assets, as they cannot meet their financial obligations. This will be recorded on the debtor’s credit file, making it difficult to obtain credit in the future.


An insolvent business offers to repay, in whole or in part, the amount owing to its creditors, often for a reduced payment plan.

Key Highlights

  • The number of business insolvencies in Peel Region decreased during the first half of 2020, as both the number of business bankruptcies and commercial proposals recorded declined.
  • The impact of COVID-19 related closures on insolvencies was not yet included in the January – June 2020 data given data reporting lag due to business closure procedure.
  • The net liabilities associated with business insolvencies fell due to the decline in the net liabilities associated with business bankruptcies.
  • The net liabilities associated with commercial proposals increased in January – June 2020.
  • The onset of the COVID-19 pandemic will likely result in higher business insolvencies and associated net liabilities throughout the remainder of 2020.

Business Insolvencies

The total number of business insolvencies in Peel were 30 in January – June 2020, a decline from 42 cases recorded in the similar period of 2019.  Lower number of cases for both business bankruptcies (-27.6 per cent) and commercial proposals (-44.4 per cent) contributed to the decline in business insolvencies.

The impact of the COVID-19 pandemic is not included in the data for January – June 2020 as permanent business closure procedures may take several months.

COVID-19 response measures and associated business closures are likely to lead to an increase in business insolvency cases in upcoming months.

Business Bankruptcies

The downward trend in business bankruptcies in Peel Region continued in January - June 2020 with a total of 21 cases, down from 29 cases in January - June 2019.

Federal and provincial government supports are available to eligible and impacted Peel businesses to support cash flow and liquidity, which may dampen the severity of the shock.

With the onset of COVID-19 and associated business closures, business bankruptcies are likely to increase in Peel in upcoming quarters as closure procedures are completed and reported.

Commercial Proposals

The number of commercial proposals declined to 9 cases in January – June 2020 from 13 cases in January – June 2019.

Net Liability of Business Insolvencies

Relative to January – June 2019, total net liabilities of business insolvencies decreased by almost 82 per cent to $21.2 million, in January – June 2020.

Net liabilities of insolvencies per case decreased by 74.5 per cent in the January – June 2020 period.

Net Liability of Business Bankruptcies

Relative to January – June 2019, net liabilities of all business bankruptcies decreased by 87.9 per cent in the January – June 2020 period.

Net liabilities per business bankruptcy case decreased by 83.3 per cent during the same period.

Both the number of business bankruptcies and associated net liabilities are likely to increase in the upcoming months reflecting the negative impacts of the COVID-19 response measures on businesses.

Net Liability of Business Proposals

Total net liabilities of business proposals increased to $7.5 million in January – June 2020, from $2.7 million in January – June 2019.

While the number of business proposals declined in January – June 2020, net liabilities increased and as such, the net liability per business proposal also increased during the period.