Business insolvencies rose 57.2% in December compared with a year earlier, according to the Office of the Superintendent of Bankruptcy.

For the entire year, business insolvencies were up 41.4% compared with 2022, led by businesses in the accommodation and food services, retail trade, and construction sectors.

The Canadian Association of Insolvency and Restructuring Professionals says the surge shows companies are struggling with pandemic debt and higher interest rates.

The association says weaker consumer spending is also weighing on businesses, as shoppers also deal with higher costs and interest rates.

Consumer insolvencies also rose in December by 18.2% compared with a year earlier, while they rose 23% in 2023 from 2022.

Business insolvencies in the fourth quarter of 2023 were higher than their pre-pandemic level, while consumer insolvencies were somewhat lower in the fourth quarter than the same quarter in 2019.