A new report from Canada's Federal Housing Advocate and the Assembly of First Nations is calling on Ottawa to help develop a First Nations-led insurance captive, one of ten recommendations aimed at addressing what the report calls systemic inequities in insurance coverage for First Nations infrastructure and housing.
The report, "Maintaining the right to housing in a changing climate," follows the 2025 wildfire season, Canada's second-worst on record, which affected 134 First Nations, forced the evacuation of at least 83 communities, and displaced more than 40,000 people.
"The right to adequate housing does not disappear during a wildfire, flood, evacuation, or recovery," said Marie-Josée Houle, the Federal Housing Advocate. "Governments must work in full partnership with First Nations to shift from reactive emergency responses to preventative, rights-based approaches grounded in First Nations leadership." AFN National Chief Cindy Woodhouse Nepinak said the pattern of recurring climate emergencies has exposed systemic gaps that require "generational investments" rather than incremental fixes.
The report states plainly that it's more difficult for First Nations to insure homes in their communities, with premiums often prohibitive and many communities generally underinsured.
That's not just an advocacy claim; it's consistent with structural barriers Canada Mortgage and Housing Corporation (CMHC) has independently documented. CMHC's own research has found that the Indian Act and the First Nations Land Management Act, by designating reserve land as Crown land and governing how First Nations manage it, directly affect liability exposure and insurance costs for people living on reserve.
CMHC has also pointed to compounding affordability barriers tied to rural locations, older housing stock, climate-driven premium increases, and strict capital requirements, with Arctic communities facing particularly limited insurance options due to supply chain constraints and high risk ratings.
A captive insurer is an entity created and owned by the group it insures, allowing that group to pool risk and access coverage terms an open market may not offer, or may only offer at a cost individual members can't sustain alone.
For First Nations communities facing what the report describes as a mix of high climate risk, limited insurer appetite, and jurisdictional complexity under the Indian Act, a jointly owned captive is a structural response to a market that has arguably priced them out or excluded them rather than simply underserved them.
The recommendation sits alongside a related, more familiar model: a 2022 BC Court of Appeal ruling already confirmed that a First Nations band qualifies as a "person" capable of holding insurance policies and benefiting from tax exemptions on premiums under the Indian Act, establishing legal groundwork that a captive structure would presumably build on.
The captive recommendation doesn't stand alone. The report called for closing a $349.2 billion First Nations infrastructure gap, including $30 billion specifically earmarked for climate adaptation, and cites national data showing First Nations people living on reserve face a fire-related death rate more than ten times higher than non-Indigenous Canadians, with victims on average two decades younger at time of death.
The report also recommended establishing a national tripartite emergency management governance authority and a First Nations-led fire safety and stewardship institution, framing insurance access as one piece of a broader prevention and self-determination agenda rather than a standalone fix.
For an industry that has spent much of this year publicly calling on governments to invest in wildfire and flood resilience infrastructure, a federally-backed push for a First Nations insurance captive is a specific, concrete policy proposal insurers may be asked to react to or help design.
A captive model built in partnership with government, rather than purely commercial capital, would represent a materially different distribution structure than the standard broker-carrier relationship most of the industry operates through, and reinsurers with experience structuring captives for underserved or high-risk pools may find genuine opportunity in helping build one, if the federal government moves this recommendation toward implementation.
