Canada unprepared for climate change related costs

Canada unprepared for climate change related costs | Insurance Business

Canada unprepared for climate change related costs
Extreme weather events driven by climate change are on the rise and Canada is not prepared to absorb the increase in damages and related costs. The warning came at an Economic Club of Canada event Thursday, where Don Forgeron, president and CEO of Insurance Bureau of Canada (IBC) called again for a collaborative national flood program.
The annual economic costs of disasters around the globe have increased five-fold since the 1980s, increasing from US$25bn a year in the '80s, to US$130bn a year in the 2000s. In Canada, federal disaster relief spending has risen from an average of US$40mn a year in the 1970s to US$100m a year in the 1990s, reaching over US$600m a year this decade. In 2013, it reached a record US$1.4bn, largely as a result of two flooding disasters, in Alberta and Ontario.
"Extreme weather events driven by climate change have increased in frequency and severity, as seen right here in Atlantic Canada. Storms and flooding in recent years have turned extreme and at times, tragic," said Forgeron. "Canada is not prepared for the increase in damage caused by climate change. As the only G7 country without a national flood program, Canadians, our government and the insurance industry have been left dangerously exposed to severe weather risks."
Building a country resilient to flooding requires a multi-pronged approach, according to Forgeron. Aging infrastructure needs to be upgraded to enable it to withstand the increased precipitation. It is also vital to inform Canadians of the physical and financial consequences of flood, especially since recent reports reveal that many Canadians mistakenly believe they are insured for flood.
"A thoughtful, sustainable approach that puts Canadians at the centre of the solution cannot wait," said Forgeron. "We need to build a new framework to guide our response to floods, building on the best practices in flood insurance in other G7 countries."