Canadian companies are confronting tariffs, economic uncertainty and continuing pressure in sectors ranging from real estate to manufacturing, but insolvency lawyers say those challenges have yet to produce a dramatic increase in proceedings under the Companies’ Creditors Arrangement Act.
Instead, CCAA activity remains relatively stable, lawyers say, even as they watch for signs that trade disruption and other economic pressures could push more financially vulnerable companies toward restructuring.
Brad Wiffen, a partner in the corporate restructuring group at Goodmans LLP, says recent figures point to a relatively steady level of CCAA activity. He cites an annual report from the Office of the Superintendent of Bankruptcy showing 66 CCAA filings in 2025–2026, a 5.7-per-cent decrease from the previous year.
“Overall, I would say it has been pretty stable,” he says.
More significant may be a change in how companies approach financial distress. Businesses increasingly appear reluctant to enter formal proceedings without first trying to work out a solution with their major stakeholders.
“Companies are increasingly trying to use in-court insolvencies as an implementation method or as a last resort,” Wiffen says.
Heather Meredith, a partner in the bankruptcy and restructuring group at McCarthy Tétrault LLP in Toronto, also sees filing numbers remaining in roughly the same range. However, she says the mix of proceedings may be changing.
“I think we had roughly the same number of filings, but there appeared to be fewer large restructurings this year,” she says, referring specifically to corporate restructurings. “On the other hand, there were many smaller to mid-sized restructurings.”
Aryo Shalviri, a partner at Blake, Cassels & Graydon LLP, similarly says filing statistics indicate that CCAA filings have remained relatively stable in recent years. He is also reluctant to identify a clear trend in the size of restructurings.
“Anecdotally, the size of restructurings, measured by the amount of debt being restructured, repaid or compromised, seems to be fairly resistant to trends,” he says.
Canada has only so many multi-billion-dollar businesses, he notes, meaning an increase or decrease in filings does not necessarily correspond with a change in the average size of companies restructuring.
Christian Lachance, a partner at Davies Ward Phillips & Vineberg LLP, also sees a relatively stable CCAA environment, though he says filings appear somewhat higher.
“For the last few years, we’ve been hearing that, ‘Oh, numbers will go up. Numbers will go up,’” he says. “It seems that the numbers are up a bit this year, but trying to establish a trend or whether or not the numbers will go up and down is extremely difficult.”
Lachance says figures he recently saw suggested a year-over-year increase of about 3.5 percent.
“So it’s higher, but 3.5 percent is not a game changer either,” he says.
Geneviève Cloutier, leader in the restructuring and insolvency group at Gowling WLG, similarly expects CCAA filings to remain broadly in line with recent experience. Looking at the past three years, she says there have been an average of 70 filings annually.
“CCAA filings are broadly on trend with what we have seen in recent years, approximately 70 filings annually on average over the past three years. I expect that pace to continue through the end of the year.”
Pressure extends beyond the usual sectors
Although no single industry is driving CCAA filings, lawyers continue to see pressure in sectors that have faced difficulties for several years.
Wiffen describes the current environment as a “steady state of insolvency filings,” with real estate, retail and cannabis among the sectors continuing to experience distress.
Chris Burr, a partner at Blake, Cassels & Graydon LLP, says real estate remains particularly important.
“The ongoing downturn in provincial real estate markets continues to be a predominant factor in insolvency filings,” he says, with real estate continuing to account for a disproportionate share of formal insolvency proceedings.
Logistics and retail also remain over-represented, Burr says, something he attributes in part to the continuing “hangover from COVID working itself through.”
Meredith sees a similar combination of long-term industry pressures and broader economic forces.
“There have certainly been pressures in certain markets,” she says. “Retail is one, real estate is another.”
Manufacturing, automotive, forestry and other cross-border industries are particularly exposed to potential tariff effects on supply chains and sales, Meredith says.
“I think that what we saw was more domain-specific related filing,” Lachance says.
Cloutier has noticed signs of distress in Atlantic Canada, including seafood processors.
“One development that stands out is the increase of filings in Atlantic Canada that would not have occurred in the past,” she says, pointing to a fishing-industry-related filing in Prince Edward Island.
But Cloutier cautions against attributing restructuring activity to any one cause.
“There is rarely a single factor behind a company entering a restructuring process,” she says. “Businesses are navigating a range of pressures, including financing costs, changing market conditions, input costs and broader economic uncertainty. The circumstances are very company- and sector-specific.”
Guillaume Michaud, partner and Canadian head of restructuring at Norton Rose Fulbright Canada LLP, is cautious about extrapolating from localized problems into national trends.
He sees clearer potential exposure in businesses dependent on fuel, energy, transportation and shipping, while distinguishing those pressures from structural changes occurring in sectors such as retail.
Waiting for the tariff effect
Tariffs represent perhaps the biggest uncertainty hanging over the insolvency outlook, although the lawyers differ somewhat on how much of their impact has already appeared.
Wiffen says the broader insolvency effect of tariffs is likely still further down the road. Industries directly exposed to tariffs – including steel, aluminum, automotive and forestry – have felt the effects, but he has not seen that translate into widespread insolvencies.
“If a company had significant revenues coming from the United States, and all of a sudden those revenues dry up, that is difficult to address through conventional restructuring tools,” he says.
Ultimately, Wiffen says, companies heavily exposed to the US market may need to find other customers and markets.
Burr says tariff-related distress has already begun appearing.
“The tariff impacts have been a factor for at least a year now,” he says.
Smaller, lower-margin businesses with significant US customers or suppliers were affected early, Burr says, and tariffs are increasingly cited in CCAA and receivership applications as causes of financial distress.
He expects that pressure will eventually spread to larger and better-capitalized businesses.
Michaud also sees timing as important. In his experience, the consequences of a major economic shock may take a few months to appear on restructuring lawyers’ desks.
Tariffs make it particularly difficult to assess, because their effects vary across industries and businesses, he says.
He expects restructuring activity to increase, particularly in transportation and manufacturing, although he stresses the uncertainty of any forecast.
“That’s just a prediction. I can be wrong,” Michaud says.
More important than applying any individual tariff may be uncertainty itself. Businesses have difficulty planning when they do not know what their trading environment will look like, he says, while consumers may also become more reluctant to spend.
Lenders decide whether businesses can be saved
The uncertainty is also affecting the way creditors respond to distressed borrowers.
Meredith says a lender may be willing to give a fundamentally sound customer additional time if the customer's problems stem from tariffs and the disruption appears temporary.
“If the lender believes this is likely a short-term issue, you may see more extensions, and forbearance agreements, and I think that is what we’re seeing,” she says.
But the fundamental questions remain the same.
“Is there a business to restructure here? What is the real cause of the problem? Is it a short-term problem? Is it something that can be fixed? What are the alternatives?”
Wiffen sees a possible parallel with the pandemic.
“The tariffs, like COVID, are an external shock that needs to be managed,” he says.
That could make lenders more willing to give fundamentally sound companies time to adapt, but Wiffen cautions that there is no blanket reluctance to enforce.
“It’s very much a case-by-case basis,” he says.
Lachance sees the same distinction. A secured lender may be prepared to give a viable business time when its problems result from something outside management's control.
“I believe the secured lender will be patient and give some chance because it’s not a business being poorly run; it’s a business facing something outside of its control,” he says.
Michaud says lenders may place struggling borrowers into special accounts, monitor them closely and take a wait-and-see approach before deciding whether enforcement is necessary.
Cloutier similarly says sophisticated lenders and institutional creditors assess individual situations before deciding whether to enforce.
“Where there is a viable path forward, restructuring processes can provide stakeholders with an opportunity to work toward a solution that preserves value,” she says.
When financial pressure changes behaviour
Shalviri identifies another risk that can develop as financial pressure intensifies: Otherwise honest borrowers are beginning to make increasingly poor decisions in an effort to keep their businesses operating.
A company might overstate a borrowing base, intending to correct it later, use employee source deductions to pay suppliers, encumber assets without required consent or redirect resources from one project to another, he says.
Individually, those decisions may be intended as temporary responses to a liquidity problem. But they can accumulate.
“These things tend to add up and tend to snowball,” Shalviri says, potentially leaving significant unpaid obligations and an undersecured lender.
As tariffs and other trade issues put additional pressure on Canadian companies – particularly smaller businesses already operating with little financial room – he expects those situations could become more frequent.
Could tariffs be the last straw?
Lachance is particularly worried about companies that entered the pandemic with existing problems and have never fully recovered.
Some survived because of government assistance and lender patience, but may have continued operating without resolving the underlying weaknesses in their businesses.
That raises the possibility that another external shock could exhaust their remaining ability to continue.
“Is the tariff war going to be the straw that breaks the camel’s back?” Lachance asks. “Could be.”
Burr identifies a related complication when governments provide financial support to distressed industries.
He describes the numerous stimulus packages and industry-specific supports being announced as positive, but says it is too early to know which will succeed, for whom and at what cost.
He points to what he describes as “zombie companies” that survived during the pandemic because substantial support temporarily allowed fundamentally unsound businesses to continue operating.
Meredith is also cautious about what lies ahead.
“I don’t think we’ve seen the worst of it, for sure,” she says.
If those pressures persist or translate into clear financial damage, Meredith expects more businesses to seek restructuring solutions, particularly in the cross-border market.
Earlier intervention leaves more options
For companies already experiencing financial pressure, the lawyers repeatedly return to the importance of acting before the business runs out of alternatives.
Meredith says communication with lenders is critical.
“Don’t surprise your lender,” she says.
A debtor should identify problems early and, where possible, arrive with a proposed solution.
Michaud describes the available restructuring choices as a funnel: The longer management waits and relies on hope rather than hard financial information, the narrower the options become.
His role begins with understanding why the company is distressed in the first place.
“Every file is different, but you need to understand the cause before finding the remedy,” he says.
Lachance makes much the same point.
There are “so many things we can do when we have some runway,” he says.
Wiffen agrees that waiting until a business is almost out of funding severely restricts the alternatives available to both debtors and creditors.
For now, CCAA filing numbers may suggest stability rather than crisis. But beneath those numbers are companies confronting very different combinations of sector-specific problems, trade disruption, financial pressure and uncertainty.
How long that stability lasts may depend not simply on whether those pressures continue, but on whether vulnerable businesses can adapt before their financial runway disappears – and whether their creditors continue to believe there is a viable business worth giving time to save.