Chris Plecash writes in the Hill Times of Canada about the rising insurance claims due to extreme weather events associated with climate change. This is going to happen in more than Canada and hopefully we will all be prepared.
Extreme weather events beginning to take a toll on Canadian infrastructure, economy
Extreme weather events associated with climate change are expected to take a heavy toll on public and private Canadian infrastructure in the years ahead, and the Insurance Bureau of Canada is sounding the alarm on rising insurance claims as a result of extreme weather events like last year’s floods in Calgary and Toronto.
Total insurance claims related to catastrophic weather events in Canada have surpassed $1-billion dollars in every year since 2009, the IBC reports, and last year flooding in Calgary and two costly storms in Toronto contributed to $3.2-billion in insurance claims by Canadian property owners.
“What we’re seeing is ‘isolated events’ now happening every year since 2009,” observed Robert Tremblay, director of research for the Insurance Bureau of Canada. “Since 2009, there’s been $1-billion in claims every year. Before that, the last $1-billion year was the 1998 Toronto ice storm, which was $1.6-billion. It was pretty significant, but it was kind of an isolated event.”
The bureau has also found that the value of total insurance claims related to weather events has increased 40 fold between 1983 and 2013. Mr. Tremblay said the most common claims are related to sewer back ups damaging basements. Last year’s Alberta flood resulted in approximately 28,000 claims, with an average payout of $61,000, the IBC reports.
A contributing factor for the rising costs is the fact that home basements have increasingly become places of leisure and home entertainment, but the increasing damage from extreme weather is producing other spin-off costs for labour, building materials and other demand-driven factors.
“Cost pressures are coming from all kinds of directions, not just the extreme weather events, although it’s a contributing factor, there’s no doubt,” said Mr. Tremblay.
The trend in increased damages from extreme weather has implications not only for homeowners, but also for governments that are responsible with maintaining public infrastructure and responding to natural disasters, and rely on uninterrupted economic activity as a revenue base.
In 2011, the National Round Table on the Environment and Economy published a report on the long-term implications of extreme weather events related to climate change estimating that climate change could cost the Canadian economy $5-billion by 2020, with costs surpassing $21-billion annually by 2050.
The report, Paying the Price: the Economic Impacts of Climate Change for Canada, noted that flooding damages to coastal dwellings in the Atlantic provinces could cost between $1-billion and $8-billion by 2050, while poor air quality from higher temperatures will increase demand on health-care facilities in Toronto, Montreal, Vancouver, and Calgary.
The report recommended that the federal government improve its economic analysis of infrastructure planning and climate change adaptation and warned that continued policy delay would resulted in higher costs in the future. The federal government shutdown the National Round Table the following year.
The federal government has had a climate change adaptation framework in place since 2011, following a critical report by the federal environment commissioner that warned that flooding, permafrost thaw, and extreme weather events would take a costly toll on buildings, transportation infrastructure, and water treatment facilities in the years ahead. The report recommended that Environment Canada take the lead in developing a federal adaptation strategy and action plan.
The Hill Times contacted Environment Canada for details on its adaptation strategy and was initially told to contact Public Safety Canada for details by departmental spokesperson Mark Johnson. According to Environment Canada, the government invested $148.8-million in climate change adaptation research and strategies since 2011, including $29.84-million for the department to predict climate change impacts and scenarios.
The funding also includes $8.5-million in funding for Health Canada’s Heat Alert and Response Systems, $20-million for Aboriginal Affairs’ climate adaptation and resilience program, and $35-million for a Natural Resources Canada program to “enhance competitiveness in a changing climate.”
NDP MP Megan Leslie (Halifax, N.S.), her party’s environment critic, told The Hill Timesthat the government isn’t taking the economic impact of climate change seriously enough.
“This is going to cost us a lot of money. I don’t think it’s too late for [climate change] mitigation, but we absolutely need to invest in adaptation, because the weather events are coming,” she said, citing the recent findings by the Insurance Bureau of Canada. “We’re seeing the wear and tear on our infrastructure with extreme weather events, the beating that our infrastructure will take because of these events is significant.”
Ms. Leslie added that responding to extreme weather and climate change doesn’t necessarily mean major new investments, but it does require better research and planning of infrastructure projects. Her own riding is particularly vulnerable to sea level rise, according to a 2010 map of coastal sensitivity to sea level rise prepared by Natural Resources Canada.
“We’ve seen floods in Canada, we’ve seen extreme weather on our costs already. If we don’t figure this out and plan, we’re going to be caught and it’s going to cost a lot of money,” she said.