As Canada is braces for another record wildfire season, the climate crisis is bleeding into another major challenge facing Canadians — housing.
A new BMO report released Monday found climate-related factors such as wildfires, floods, heatwaves, and storms will affect where 39 per cent of Canadians choose to live in the next five years. The percentage is higher among younger Canadians.
It jumps to 49 per cent for millennials (those born between 1981 to 1996) and 54 per cent for gen Z Canadians (those born between 1997 to 2012), the report said.
Alex Cool-Fergus, national policy manager at Climate Action Network Canada, said the data is not surprising considering that recent events have brought the climate crisis home for many Canadians.
“The impact of, for example, a flood in your basement can cost you dozens of thousands of dollars, for one event. I think it’s normal and I think it’s … relatively encouraging to know that people are aware of the risks,” she said.
THE COST OF CLIMATE CHANGE
According to the Insurance Bureau of Canada, 10 per cent of all households in Canada are “highly exposed” to flood risk but lack access to flood insurance. The cost of extreme weather events on residences has skyrocketed since 2008.
A recent report by the Intact Centre on Climate Adaptation said between 1983 and 2008, insured losses in Canada averaged $456 million a year. Since 2008, losses have surged and now regularly exceed $2 billion per year, mostly due to water-related damage. In 2023, severe weather damage in Canada exceeded $3 billion for the second year in a row.
The Intact report said catastrophic flooding resulted in an average 8.2 per cent reduction in the final sale price of houses, 44.3 per cent reduction in the number of houses listed for sale, and 19.8 per cent more days on market to sell a house. The Okanagan and Shuswap, B.C., area wildfires and Nova Scotia flooding were two major weather events that contributed significantly to the damage last year.
According to the IBC, it costs around $43,000 to repair a flooded basement in Canada.
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Steven Harris, LowestRates.ca expert and insurance broker, said: “The increasing severity of storms, wildfires and other natural disasters is driving up claims costs for the home insurance industry across the country. This is compounded by inflation and the increase in rebuilding and replacement costs, which in turn is driving up home insurance premium prices for many consumers.”
He added that the impact of extreme climate events will look different across Canada. Some regions, such as the east coast, are experiencing increased storm severity and flooding, while other areas, such as Ontario, Quebec, Alberta and B.C. are seeing increased wildfires and drought.
What can homeowners do?
Harris said people should be aware of the risks.
“Taking a look at flood maps, if available, can be helpful, or understanding the risk of wildfire for the area, and taking steps to protect the property from these risks will help. For example, installing sump pumps for potential flooding or cutting long grass short around a home in an area that may be prone to wildfire,” he said.
The Intact Centre has a list of infographics with steps homeowners can take to prepare their homes against wildfires, heatwaves, flooding and other such extreme weather events. They range from maintaining your home in a climate-adaptable way, such as clearing combustible material form near your house regularly or cleaning leaves from troughs, to more expensive measures that can add non-combustible or flood-resistant building material to your home.
Harris said homeowners should also have a clear understanding of what their home insurance covers and what it doesn’t.
He added: “It’s not just homeowners, renters also need to have the right coverage, especially if they live in flood or wildfire-prone areas. If a flood or wildfire is imminent, they may not be able to purchase coverage due to binding restrictions.”
‘Policy changes soon’
He said Canadians should expect policy changes soon.
“The Insurance Bureau of Canada is currently working with the federal government on a National Flood Plan that is slated to be introduced in the coming years,” he said.
The federal government said it plans to implement a long-promised national flood insurance program sometime next year, setting aside $15 million in the 2025-26 fiscal year in its latest budget on April 16.
Cool-Fergus said the cost of not acting is much higher than the cost of climate adaptation.
“The Canadian Climate Institute says that for every dollar invested in climate adaptation today, there’s a return of $13 to $15 in future savings. That’s massive,” she said.
“Governments across Canada should be … right-sizing infrastructure, making sure that their infrastructure is built in a way that reflects tomorrow’s weather and not today.”
She said it was time Canadians started to have hard conversations.
“There are also hard conversations that are going to have to happen within local communities, and within provincial governments (in Canada), about where people can no longer live. And that’s a really hard thing to do. It’s a conversation is happening in the United States.”
However, she said some encouraging change has taken place at the municipal level in cities such as Montreal and Fredericton.
“There are municipalities that have absolutely jumped both feet in and are changing the way that they build their roads, the ways they’ve done their sewers. They’re investing in green space and natural climate solutions.”
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