Trade exposure still leaves firms vulnerable
Canada is on track for a 14% drop in insolvencies in 2026 even while global business failures are forecast to rise 3%, though Atradius says firms still face pressure from trade, costs and economic uncertainty.
For Canadian advisors and planners, the forecast points to easing filing activity after a sharp post-pandemic adjustment rather than a full return to pre-2020 conditions.
Atradius said Canadian insolvencies are continuing to move lower after the spike in 2024, when many small businesses faced repayment deadlines tied to pandemic-era support programs and delayed filings came through the system. Corporate filings moved closer to typical levels in 2025, and early 2026 data suggests that trend has continued. The insurer expects filings to remain broadly unchanged in 2027, though still slightly above normal levels.
That view broadly aligns with other trade credit insurers. In its October 2025 global outlook, Allianz Research said Canada was one of the few major markets already showing a decline in insolvencies, with 21 of 22 sectors posting lower filings in the first part of 2025. Allianz also placed Canada among markets expected to post noticeable declines in 2026.
Coface said in its January 2026 report that insolvencies across advanced economies remain elevated after several years of increases tied to higher borrowing costs, weak demand and the withdrawal of pandemic support. It said Canada’s post-pandemic insolvency rise was steep in earlier years, including a roughly 40% increase in 2022, before moderating more recently.
Lower filings do not remove operating risks
Atradius said Canada’s faster monetary easing compared with the US and eurozone may have helped bring filings down. But the insurer said Canadian companies still face pressure from operating costs and economic conditions, which is why insolvencies are expected to stay slightly above normal in 2027.
Allianz also warned that Canada remains exposed to weaker export demand. In a downside trade scenario tied to US tariffs and softer trade volumes, Allianz estimated Canada could face up to 1,900 additional insolvencies above baseline levels because of export losses. The insurer said Canada is one of the economies where weaker exports have a clear link to higher business failures.
That risk matters for planners with clients in trade-linked sectors, manufacturing and small business lending, where cash flow remains sensitive to slower demand and financing costs.
Global outlook revised higher
Atradius now expects global insolvencies to rise 3% in 2026, a 6 percentage point upward revision from its October 2025 forecast. The insurer said the expected return to lower insolvency levels has been delayed until the second half of 2026 because companies are still dealing with Covid-related tax debts, higher input costs and trade tensions.
“Our insolvency forecast has deteriorated due to the persistence of adverse economic conditions, including Covid related tax debts, rising input costs and ongoing trade tensions. The crisis in the Middle East, together with the associated increase in energy prices, adds to existing pressures. The impact on businesses will depend largely on the length of the conflict,” said Atradius Senior Economist Theo Smid.
Atradius said its baseline scenario assumes shipping through the Strait of Hormuz remains close to zero for two months before gradually returning from May, with limited damage to Gulf infrastructure. A longer disruption could lead to weaker growth and higher insolvency levels.
The insurer estimates the Middle East conflict will trim 0.4 percentage points from global growth in 2026, bringing projected growth to 2.6%. Oil prices have risen 55% since the crisis began, while European gas prices are up 73%, adding to cost pressure for businesses.
Different pressures across regions
In the US, Atradius expects insolvencies to rise 8% in 2026 and stay broadly flat in 2027, with trade tariffs, policy uncertainty and tighter lending standards weighing on companies. It also expects US inflation to average 3.2% this year, 0.8 percentage points above its earlier forecast.
Allianz said US firms have so far avoided the larger tariff-related rise in failures that some had expected because of trade rerouting and lower shipping costs, though it warned that delayed pass-through to prices could still pressure companies later.
In Europe, Atradius said Switzerland is forecast to post the largest increase in insolvencies in 2026 at 17%, followed by Italy at 7% and Portugal at 4%. Ireland is expected to record a 17% decline, while Denmark and Norway are both forecast to see 6% declines.
Atradius expects global insolvencies to fall 6% in 2027 if inflation eases, energy markets settle and central banks regain room to cut rates.
