The State of the Canadian Insolvency Industry: Lessons from 2024 and the Road to 2025

As the dust settles on 2024, one thing is clear: insolvency professionals have had their hands full. From a real estate crisis that continues to deepen, to cannabis companies struggling to stay afloat, no sector was truly immune from the economic turbulence of the past year. Lenders took the reins in restructuring proceedings, fraud cases came to light, and distressed sales soared as companies fought to stay viable.

We wrote about 270 formal filings in 2024:

• Real estate led all industries with 70 filings mentioned, followed by cannabis with 22 filings, and retail with 17 filings.

• 136 filings mentioned were in Ontario, followed by 43 in Alberta, 39 in British Columbia, and 30 in Québec.

• 73 CCAA filings were mentioned. KSV and PwC each acted as monitor in 11 of these filings, followed by Deloitte with 10 appointments, and FTI, EY and A&M with 9 appointments each.

• Osler was engaged on 11 CCAA files as company counsel, followed by Miller Thomson with 6 engagements, and Bennett Jones, Fasken and McCarthy Tétrault with 5 engagements each. Several other firms had four engagements or less.

Our final 2024 CCAA league table is set out below:

You can find details of all these files in our Filings Database, which is sortable by filing type, industry, location, trustee, counsel and more.

As we step into 2025, industry experts reflect on the past year and weigh in on what’s next. Below are their thoughts:

What industries are struggling?

Bobby Kofman & David Sieradzki, KSV
Few sectors were immune in 2024 to the present economic challenges. That said, the real estate downturn is perhaps the most pronounced we’ve witnessed in any one sector since we started practicing. 

Howard Steinberg, Steinberg Advisory Corp.
Activity has picked up significantly during the year with few sectors remaining untouched by higher interest rates. Notably, real estate remains the most impacted sector while others who have been holding on for sunnier skies are starting to realize the light at the end of the tunnel is a train heading straight for them. While this has been true for some time in cannabis, with 2024 being no exception, it appears the tide is slowly turning for those that have figured out a way to thread the needle leaving behind those with questionable management.

Leanne Williams, TGF
Real estate and cannabis continued to struggle in 2024. The transportation and logistics industry was also hit hard in 2024. When a particular industry struggles, it creates a domino effect for some and opportunities for others.

For example, in the cannabis sector, certain well-capitalized industry players have been able to take advantage of their struggling competitors with unique assets to complement their portfolio. On the other side of that, often the SISP for insolvent cannabis companies with average assets or common licenses has resulted in little or no outside interest. This makes it difficult to fund any substantive restructuring proceeding when cash is tight and no buyer is locked in before a filing. Having “significant interest” in the assets at the beginning of a SISP may have little or no meaning.

Kyle Kashuba, Torys
The cannabis sector faced significant financial difficulties once again in 2024, leading to multiple insolvency filings. For instance, Indiva Limited and Heritage Cannabis Holdings Corp., both Ontario-based cannabis companies, sought protection under the CCAA in June and April 2024, respectively. It’ll surely be a continued struggle for our friends in Canadian cannabis.

Jon Krieger, Doane Grant Thornton
We have seen significant challenges in trucking/logistics, office real estate, and sectors that are heavily dependent on new capital (mining, start up technology, etc.). Surprisingly, certain sectors which historically have been challenged in a weak economy (retail, automotive) have been resilient despite softening consumer sentiment. Also different than previous downturns, there still appears to be significant available capital from investors seeking the right opportunities. 

Asim Iqbal, Gowling WLG
The transportation industry has been a busy sector for insolvencies and receiverships. The fallout from Pride has reverberated throughout the industry as lenders learn from that experience and work to recover their assets.

Darren O’Keefe, O’Keefe & Sullivan
In Eastern Canada, the fishing industry has been hit hard with significant volatility in product prices because of changing consumer demands following the end of the pandemic.  This has in turn created several significant problems for creditors particularly as it relates to taking possession of ocean/marine vessels and realizing on licenses where the market value is hard to determine.

Natasha MacParland, Davies
Overall in 2024, we saw a marked increase in filings, but we are not yet seeing the level of sector-specific distress one might expect. Rather, the increased insolvency activity was spread across various sectors and provinces. The data we’ve compiled and analyzed, such as that discussed in the November 2024 issue of Insolvency Now, underscores the ongoing economic challenges and uncertainties facing Canadian businesses all over the country. On the other hand, we were pleased to undertake a number of out of court restructurings and refinancings employing innovative deal and financing structures. 

Michael McTaggart, PwC
We definitely saw more activity in 2024 from a variety of industries right across the country.

What themes have you noticed in 2024?

2024 was the year lenders took control, opting for creditor-driven CCAAs, receiverships and monitors with enhanced powers over traditional debtor-in-possession proceedings, especially in the real estate industry. This may be due to increased levels of borrower bad behaviour and even fraud. We have also witnessed more distressed sales and wind-downs than restructurings, although we understand that some borrowers and lenders have been able to successfully restructure out-of-court through creative deals and financings.

Peter Bychawski, Blakes
There has been a marked increase in lender assertiveness in 2024. This is likely attributable to the fact that many lenders had in recent years demonstrated restraint in dealing with struggling borrowers (with the number of forbearance agreement amendments in the double digits not being uncommon). As an example, throughout 2024 more lenders have sought to establish control over insolvent debtors including the conduct of their insolvency proceedings. This has included everything from insistence on receivership rather than CCAA as the appropriate mode of proceeding, on the one hand, to the imposition of strict controls on debtors through the utilization of enhanced monitor powers in the context of the CCAA, on the other. The prevalence of the latter method of lender control has at times seemed to trend towards becoming the norm rather than the exception, particularly when dealing with debtors with a long history of forbearance. Perhaps relatedly, there has also been a notable uptick of lenders having recourse to creditor-driven CCAAs as a means of forcing reluctant debtors into a formal insolvency process.  

Kyle Kashuba, Torys
Over the course of the past year, several notable trends have emerged and continued in the insolvency and restructuring space in our country. There has been an increase in creditor-driven CCAA proceedings, notably in cases such as Long Run Exploration and A2A Developments, out west. Of course, traditionally speaking, the CCAA has been a debtor-in-possession regime. However, recent case law indicates a rise in creditor-initiated CCAA proceedings. This more proactive approach can have its advantages, especially in asset-rich industries such as oil and gas and real estate. The question of whether or not these sorts of proceedings are liquidations in disguise looms large, but the jurisprudence is somewhat in flux. Limits will be tested. I think that creditors – primarily secured creditors but also unsecured creditors – are increasingly favoring this approach (including seeking provisions for enhanced powers for the Monitors that are being appointed) over court-appointed receiverships, especially in complex situations where maintaining the debtor’s operations is advantageous.

Bobby Kofman & David Sieradzki, KSV
One theme our practice experienced in 2024 was a disproportionate number of fraud situations.  We are involved in these mandates not only in the real estate sector, but also in the restaurant and film industries.  It may be that “desperate times call for desperate measures”, but particularly in the real estate sector, “Ponzi schemes” are typically only exposed in a downturn when new investor funds dry up, so that old debt can no longer be serviced.  In addition to Ponzi schemes, we have active fraud mandates involving falsification of borrowing base certificates and financial statement misrepresentation.

Other themes that come to mind are distressed, asset-light technology companies with underperforming cash flow loans and shareholder disputes in solvent real estate situations requiring a court officer to oversee and manage their businesses.    

Mike Czestochowski, Lauren White, Emelie Rowe and Evan Stewart, CBRE
We have noticed in 2024 more overall activity in distressed sales. That activity has changed from the previous year to show larger properties, income producing properties and properties related to business insolvency (i.e., transportation industry).

Lenders/receivers have become more creative as to deal structure in order to increase the number of prospective purchasers and maximize price. 

Jason Rae, Tiger Capital Group
In 2024, consumers were clearly seeking value, and operators, both retail and e-tail, responded with aggressive discounting and promotions in an effort to compete.

Tiger’s Commercial & Industrial division has experienced an increase in inquiries from secured lenders and turnaround professionals regarding the disposition of both excess assets as well as entire operations and fleets. 

Michael McTaggart, PwC
I noticed more NOIs last year then I had seen in previous years.  I am not sure if that was actually a statistical trend but it seemed that NOIs were being used a fair bit. 

In your opinion, what has been the most interesting or notable restructuring case of the past year?

From billion-dollar restructurings to courtroom showdowns, 2024 delivered some of the most dramatic insolvency cases in recent memory. The Pride Group CCAA sent shockwaves through the transportation industry. The Mizrahi and Thind Properties receiverships underscored the deepening condo crisis, and the Alderbridge CCAA in B.C. became a battleground for lenders fighting over priorities. Meanwhile, the tobacco industry’s proposed $32.5 billion settlement sets a Canadian precedent for mass tort insolvencies. From cannabis to construction, mining to media, no industry was spared. Here’s what industry insiders found most fascinating in 2024’s insolvency landscape.

Leanne Williams, TGF
My bias would be the Pride case. Its size and complexity have been incredibly challenging. 78 companies throughout 2 countries, $2 billion in liabilities, 36 different lenders (including a large securitization portfolio) and more than 40 real estate holdings in an industry in turmoil makes for some interesting issues requiring creative (and often unpopular) solutions. There has had to be a balancing of interests between all stakeholders, including employees and customers, over a variety of issues to ensure fairness and the right result.

Pride is the first time that a sizable securitization portfolio will be tested in a CCAA to determine if it is truly bankruptcy remote. Notwithstanding that the Applicants were able to sell over $100 million worth of inventory to pay down creditors at the beginning of the proceeding, the lenders preferred a return of their collateral to a traditional liquidation once it was determined that a restructuring was not possible. As a result, the estate was left with very little funding to wind-down the estate (after the termination of the DIP) as the proceeds from sales were paid to lenders with only a small fraction being retained for operations. The unique circumstances necessitated a unique solution whereby non-securitization lenders could opt to rateably provide interim funding of the proceedings in exchange for a return of their collateral. The Court found that the initial funding mechanism proposed, which required securitization and non-securitization lenders to fund, contravened section 11(b) of the CCAA. 

Asim Iqbal, Gowling WLG
Pride was the most interesting case in my opinion because of its complexity, scale and relative novelty in terms of the intersection of securitization lenders and the insolvency system.

Natasha MacParland, Davies
We were pleased to act for the Insolvency Institute of Canada (IIC) as an intervener before the Supreme Court of Canada in Aquino v. Bondfield Construction Co. and Scott v. Golden Oaks Enterprises Inc., two important commercial cases concerning corporate attribution and set-off in the bankruptcy and insolvency context. These SCC decisions marked a pivotal moment in Canadian insolvency law concerning the liability of corporations for the fraudulent actions of their principals in the insolvency context and provided welcomed clarity to the application of the doctrine of corporate attribution in this context.

Michael McTaggart, PwC
I actually found the Red Lobster situation in the US interesting. The endless shrimp promotion that drove it into bankruptcy! In all seriousness there are some great articles on the decline of Red Lobster and it has all the elements of a classic case study. It seemed that in the US the restaurant industry faced significant headwinds in 2024. I was reading one article that said over 30 restaurant chains or large franchisees in the US ended up in some sort of creditor protection headlined by TGI Fridays, Red Lobster and BurgerFi. I don't believe we saw that same trend in Canada but you have to wonder if the issues facing the US industry will eventually find their way up to the Canadian market. 

Howard Steinberg, Steinberg Advisory Corp.
The Atlas Global Brands case was notable. Based in Chatham, Ontario, Atlas Global Brands managed its cannabis cultivation, extraction, manufacturing, marketing, and distribution operations through its wholly owned Canadian subsidiaries, GreenSeal and AgMedica, each of which had different secured creditors. On June 20, 2024, the companies sought protection under the Companies' Creditors Arrangement Act (CCAA). While Ernst & Young (E&Y) and the secured creditors associated with AgMedica supported a CCAA process, the secured creditors tied to GreenSeal advocated for a receivership. Typically, the courts would approve a receivership for GreenSeal and a CCAA process for AgMedica, however, the company successfully argued that the combined value of the two entities exceeded their individual values, leading the court to grant CCAA protection for both entities.

A distinctive aspect of this case was the court's decision to reject the GreenSeal creditors' application for receivership. Instead, it permitted the company to use GreenSeal’s cash and receivables—assets pledged to the secured creditors—to fund the GreenSeal CCAA process, effectively compelling the creditors to provide debtor-in-possession (DIP) financing. The argument that the combined entities held greater value than their individual parts ultimately proved incorrect. Separate bids were submitted for each entity, with the offer for GreenSeal falling below the amount owed to its secured creditors. Negotiations concluded with a bidder, resulting in the secured creditors compromising on the amounts they were owed. The GreenSeal CCAA process, which relied on funding from its secured creditors, failed to protect their interests, ultimately forcing them to accept a reduced recovery on their claims.

Bobby Kofman & David Sieradzki, KSV
We are presently the CCAA monitor of Elevation Gold Mining Corporation, which is a publicly traded Vancouver-based company that, at the filing date, wholly-owned, among other assets, a subsidiary that operates a mine in Arizona (the “Subsidiary”). There is an ancillary proceeding under Chapter 15 of the US Bankruptcy Code. The proceedings are ongoing, but the transaction (approved recently by the BC and US courts) is a hybrid-RVO transaction that involves a sale by Elevation of the shares of the Subsidiary. The senior lender has security over all the assets of the Elevation group. On closing of the sale of the shares of the Subsidiary, the “residual assets and liabilities” of the Subsidiary were transferred to Elevation (versus being transferred to a “residual co”) where they, and the proceeds from the sale of the shares of the Subsidiary, are to be distributed in accordance with priorities. Additionally, as a result of opposition from parties claiming to own royalties that create an interest in land, the transaction provides for contingent consideration payable to Elevation based on the outcome of litigation that is to be heard by the US Court as to whether these claims do in fact create an interest in land (that cannot be vested off), or whether they are an unsecured claim (which can be vested off).  

Peter Bychawski, Blakes
One file that I have been observing with great interest (not least because my firm is counsel for the senior secured lender) is the Alderbridge CCAA proceeding. Insolvency Insider has reported on this case many times. The debtors were the developers of a large building project in Richmond, British Columbia that went into CCAA protection in early 2022. Three related court actions asserting total claims and cross claims in the hundreds of millions of dollars were subsequently filed by the senior secured lender, a subordinate lender, and the debtors and their guarantors. Each of the three actions implicated the quantum and priority of the senior secured lender’s claims against the debtors subject to the ongoing CCAA proceeding. The disputes among these CCAA stakeholders ultimately culminated in a four-week trial in the spring of 2024 that was conducted in the context of the CCAA. Leading up to the trial, the CCAA court made orders that relied upon the developing body of jurisprudence relating to the “single proceeding model” of insolvency as enunciated by the Supreme Court of Canada and other courts over recent years. For this reason, Alderbridge provides a current case study of how the single proceeding model can be utilized to adjudicate substantive claims (including inter-creditor claims) in the context of an active CCAA proceeding, including the determination of the appropriate pre-trial procedures and mode of trial. 

Kyle Kashuba, Torys
The year has seen no shortage of front-page cases and decisions, from numerous jurisdictions and all levels of court. The Alberta Court of Appeal had a hugely important decision in April of this year, in overturning the lower Court’s decision in Qualex-Landmark Towers Inc v 12-10 Capital Corp. In the expanding world of post-Redwater environmental liability and the priority of ARO claims, this case clarified that the super priority of environmental remedial obligations does not apply to private litigants. This decision alleviated uncertainties for secured lenders regarding environmental liabilities in the insolvency context.

I would also be remiss to not mention the Alberta Court of King’s Bench’s recent decision in the Long Run Exploration proceedings. This decision, which may be the subject of an appeal in early 2025, added some much-needed clarity on the point of the imposition of constructive trusts grounded in fraud allegations- particularly on the eve of a large transaction. We also were provided a crisp reminder that courts will be reluctant to substitute terms or rewrite agreements between sophisticated commercial parties in CCAA proceedings.

Darren O’Keefe, O’Keefe & Sullivan
Edward Collins Contracting Limited (Re), 2024 NLSC 145 was an interesting case in that the Courts awarded costs against a surety company as a result of that company’s failure to comply with the claims procedure that was put in place to deal with pre-filing claims. Interesting legal decision. There was a companion decision relating to the Government of Newfoundland and Labrador that had a similar ruling. 

Jon Krieger, Doane Grant Thornton
Metroland Media Group is a very interesting case - this case was a significant and successful restructuring of a business using the provisions of the BIA. Metroland operated over 70 community print newspapers in Canada. While not by any means the largest case this year as creditor claims were about $100 million, the Company had to completely transform its operations in order to survive due to changing consumer preferences and evolving technology.  The restructuring involved the disclaimer of almost all of its leases, reduction of its workforce by about 70%, conversion of almost all of its business to digital from print technology, and the compromise of significant debt. The case was also notable in that it was a collaborative and cooperative effort between the Company, its secured creditor, the union, non-unionized employee group, trade creditors and Service Canada to come to a successful outcome. The business has emerged lean and well equipped to be successful for the future.

How do you see 2025 shaping up?

With interest rates still biting, credit markets tightening, and economic uncertainty looming, insolvency professionals are bracing for another busy year. The real estate sector remains in distress and retail, cannabis, and transportation continue to struggle. At the same time, geopolitical tensions, potential U.S. tariffs, and Canada’s own upcoming federal election could throw new curveballs into an already fragile economy. Will 2025 bring more liquidations, or will creative restructurings and distressed M&A deals take centre stage? Industry experts weigh in on what to expect in the year ahead.

Kyle Kashuba, Torys
It doesn’t take an expert to commentate on the state of the Canadian economy and some of the risks and ongoing developments that come along with it. Let’s also not forget (as if we could) the fallout of the US election, and the pending tariff battles that our country is facing. And we’re of course also looking at our own federal election around the corner- a subject that will be popping up at all sorts of dinner tables, boardrooms and cocktail parties over the coming months. I’m expecting a serious uptick in insolvency filings, driven by persistent high interest rates and upcoming debt maturities. Industries with over-leveraged companies are particularly vulnerable. Of course we have the real estate sector, which I expect will face continuing challenges, especially in commercial and industrial real estate, due to shifting market dynamics and financial strains. The energy transition (I’ll doubtlessly receive some feedback for that phraseology) will continue to play a significant role in Western Canda’s insolvency landscape. There are serious pressure points in this space, with mid-sized firms being particularly vulnerable to sustained high interest rates and challenging capital markets. Companies struggling to adapt to changing market demands may increasingly turn to restructuring as a way to integrate a sustainability angle, or consolidate with stronger industry players. It should be an exciting year ahead. Buckle up!

Bobby Kofman & David Sieradzki, KSV
We don’t expect the activity in the real estate sector to slow materially, and it may increase. There is some optimism that lower interest rates may result in improvement in the sector; however, particularly in the high-rise condominium segment, pre-sales of new condos are close to a 30-year low and the decline in condo prices make it uneconomic for projects to be advanced. Additionally, certain segments of the real estate market appear to be weakening and others, such as office, have yet to show cracks in a significant way. To borrow a sentiment from a commercial real estate broker with whom we deal frequently, “there does not appear to be a 2025 in my calendar”. If he is correct, the industry is likely to be very active in the coming year. 

As noted, while the real estate sector is exceedingly active, we are seeing significant activity across the board from coast-to-coast, from technology, to media, oil and gas, and automotive, just to name a few. 

Jon Krieger, Doane Grant Thornton
Lender’s loan loss provisions are relatively high, which is a good indicator that there will still be significant activity for insolvency practitioners in 2025.  However, formal filings for small businesses in 2024 were likely inflated as a result of a pandemic hangover so overall commercial insolvency filing numbers may in fact be down this coming year.  As for industries, there is a lot of concern in the condo market this year as sales volume is down significantly, there are a lot of projects in various stages of completion, many builders are not well capitalized, and it isn’t clear if lower interest rates will bring buyers back to the market in the short term. 

Howard Steinberg, Steinberg Advisory Corp.
The restructuring landscape in 2025 is expected to remain active, driven by high interest rates, tightening credit markets, and slowing economic growth. Real estate will face continued challenges with refinancing and declining valuations, while retail, particularly big-ticket and discretionary sectors, will grapple with demand softness. Technology, cannabis and manufacturing will see heightened restructuring activity due to valuation recalibrations, market saturation, and commodity volatility, respectively. Fraud investigations and governance failures, remnants of prior loose lending environments, will drive creditor interventions. Amid these pressures, distressed M&A, ESG considerations, and operational turnarounds will emerge as critical focus areas, creating opportunities for proactive stakeholders and qualified advisors who can preserve and create value with tailored solutions that are operational as well as financially focused. The wild card for all sectors are the potential consequences of US foreign policy. 

Peter Bychawski, Blakes
It seems like 2025 may finally be the year when the proverbial chickens come home to roost. I still remember the mood among the insolvency community in the early months of the COVID-19 pandemic when a significant uptick in filings was expected. Most industry observers were understandably surprised when the period from 2020 – 2022 ended up being characterized by an abnormally low level of restructuring and insolvency activity. Two years later, with government supports long dried up, and new pressures of high inflation and high interest rates taking their toll, we have seen a gradual increase in activity culminating in a busy end to 2024. There is every indication that this trend will continue into 2025 and not be limited to any one sector or industry. I am sure there will be a few surprises over the course of the year, but generally I expect that the economy-wide volume of filings is what will keep professionals busy in the months ahead. 

Brendan O'Neill, Goodmans
I think that in addition to the continuing rise of receiverships over CCAAs for a number of reasons in certain sectors, we are going to start seeing an increased influence and presence of liability management exercises (LMEs) in Canada – and Canadian practitioners will need to be prepared for this. While we will continue to have better restructuring tools than LMEs to rely on domestically to effectively and efficiently restructure our company clients (such as efficient CCAAs, CBCAs, etc.), we will need to start thinking about how to defend our creditor clients against US-based LMEs as they begin to cross the border into Canada. The LME trend in the US will continue to grow larger and larger, and it will cross our border soon enough.

Michael McTaggart, PwC
I think 2025 will be an interesting year with a variety of different activity. There is so much going on right now with interest rates, the US dollar, potential tariffs and the subsequent threat of global trade wars - I would think those are the kind of issues that could lead to more work out, special situation and restructuring transactions.

Leanne Williams, TGF
Notwithstanding decreasing interest rates, I think 2025 will continue to be busy across many industry sectors. I think that there are still market corrections that need to happen before restructurings start to slow down. Real estate and cannabis will continue to struggle. However, I am somewhat optimistic that we will see more actual restructurings instead of sales and wind-downs.

Natasha MacParland, Davies
We expect that Canadian businesses will face a challenging landscape as interest rates, inflation, threatened US tariffs, geopolitical uncertainties and post-pandemic market shifts converge, increasing financial distress – particularly in retail and real estate. As the retail sector has faced negative net business openings each month since January 2024, that’s definitely a sector we will continue to watch closely. And as we continue to track the evolving data on insolvencies and business openings and closings, and analyze that data – which is crucial in understanding the long-term impact on various sectors and overall business health in Canada – we are also mindful of how the stigma associated with insolvency remains a significant barrier for businesses facing financial distress. 

Mike Czestochowski, Lauren White, Emelie Rowe and Evan Stewart, CBRE
We expect activity in distressed sales to increase in 2025. We believe we will continue to see business failure related distressed real estate sales along with traditional power of sale/receivership sales.

The amount of distressed properties will continue to increase and we expect a number of lenders that have been patient with their defaulted loans will run out of patience and act on their security. 

Lenders/receivers are becoming aware of the unrealistic promises of a small of group of brokers during the broker request for proposal process. They are now relying more on the experience of those brokers that have a proven track record and can show a value add through market experience. 

Jason Rae, Tiger Capital Group
Looking ahead to 2025, we see continued stress and distress in a number of industries, notably transportation and EV.

A hangover of working capital challenges, tightening credit and liquidity, coupled with the present uncertainty around tariffs and continued inflationary pressure, suggest that the retail space will continue to consolidate, and the e-tail space will continue to evolve, in 2025. 

Asim Iqbal, Gowling WLG
2025 is shaping up to be a busy year. Expecting to see more activity across a variety of industries. The Canadian economy appears to be headed towards a recession. 

Darren O’Keefe, O’Keefe & Sullivan
We expect 2025 to be busier than the previous 3 years. The marine industry will continue to be hit hard.

If 2024 was the year of mounting distress, 2025 could be the year when the real fallout begins. With lenders taking a harder stance, the real estate sector still in turmoil, and struggling industries like cannabis, transportation, and retail showing no clear path to stability, insolvency professionals are preparing for another year of high-stakes restructurings and distressed sales. But amidst the turmoil, there are opportunities—creative dealmaking, out-of-court solutions, and strategic M&A could define the next chapter. One thing is certain: the challenges aren’t over, and the biggest stories in Canadian insolvency may still be ahead. Stay tuned!