Climate-related catastrophes shaved billions off of Canada's GDP – report

Climate-related catastrophes shaved billions off of Canada's GDP – report | Insurance Business Canada

Climate-related catastrophes shaved billions off of Canada

A new report suggests that over the last decade, weather-related disasters have impacted Canada’s economy so much that the country’s GDP has taken a hit.

The Canadian Institute of Climate Choices (CICC) report said that over the last 10 years, Canada’s GDP lost between 5% and 6% of growth annually due to billions of dollars lost to severe weather damage. CICC cited data from the Canadian Disaster Database, as well as from the Insurance Bureau of Canada (IBC).

“Let’s face facts: These kinds of disasters are extremely expensive, both in terms of damage to property and businesses, but also in terms of lost economic output,” CICC adaptation research director Ryan Ness told The Weather Network. “When people are displaced by a flood or fire, they can’t work.”

Damage to property and businesses has also increased over the years, the report found. Within the 2010-2019 period, the total cost of damage was around $14.5 billion – twice what it was 24 years ago.

CICC also noted that costs per disaster have spiked as well. In the 1970s, the average disaster caused about $8 million of damage, however that figure jumped to $110 million, which is an increase of 1,250%.

Ness commented that while CICC’s report draws from different data sets, since they are tracking different things, they all show the same trends over the decades – “catastrophic weather events are becoming more frequent, and total costs and average costs are going up.”

CICC has recommended that Canada’s federal, provincial, and municipal governments increase their spending on disaster prevention, as well as improve on coordinating mitigation efforts among themselves. The institute also said that both governments and financial regulators should work on making transparent the economic and social risks faced by the public and private sectors due to weather events.

However, CICC noted that action on climate change mitigation may be taken based on incomplete information, since the exact economic costs of individual disaster events are difficult to quantify in advance.

“We will never have perfect information, but we already know enough to see that the consequences of not being prepared will vastly outweigh the cost of preparation,” said Ness.