Insolvencies declined in the third quarter, according to new data from the Office of the Superintendent of Bankruptcy Canada (OSB).

The agency reported that the total number of insolvencies in the third quarter declined by 7.9% compared with the previous quarter, although insolvencies are up by 1.5% from the same quarter last year.

Bankruptcies were down sharply in Q3, dropping 13.6% from the second quarter, and consumer proposals declined by 5.0%.

Compared with the same quarter last year, bankruptcies were down 12.1% this year, but consumer proposals were up by 9.1%.

Throughout the pandemic, insolvency activity has remained unusually low compared with previous economic shocks — a phenomenon that has been attributed to unprecedented levels of government support, along with other financial lifelines that have limited the economic damage.

In the 12-month period to Sept. 30, the total number of insolvencies was down 15.9% compared with the same period in 2020.

Bankruptcies were 24.7% lower from the previous year, and consumer proposals were down by 10.8% from 2020 levels.