Looking ahead
As we look ahead to the way 2025 will unfold, we will continue to monitor the following key issues our data have identified as the most central in the near term:
— Economic uncertainty and business closures. Will tariff policies between Canada and the United States continue to lead to increased business closures and transitions, particularly affecting the automotive, manufacturing, and retail sectors owing to supply chain disruptions and changing consumer behaviour? — Impact on manufacturing sector. Facing significant challenges from Canada-U.S. trade tensions, the manufacturing sector experienced increased costs for raw materials and reduced profit margins, leading to 30.8% of all CCAA proceedings in 2024. Will this trend persist in 2025? — COVID-19–style government assistance. Government assistance during the COVID-19 pandemic helped many businesses survive, but as support waned, less competitive zombie firms faced increased financial pressure, contributing to a delayed rise in insolvency activity. With close to four years of experience, will the government be in a better place to position tariff-related support only for healthy businesses? — Business openings and closures. In 2024, Canada experienced a net loss of 391 businesses, contrasting with a net gain of 4,580 businesses in 2023, indicating increased economic pressure and voluntary closures as owners pursued more profitable opportunities. Will changes to post-election government policy and market conditions, among other factors, lead to more or less openings and closings?
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Davies Insolvency Now: Issue 12
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