EDITOR’S NOTE: An earlier version of this story said the IBC estimated insurance premiums could rise five to 50 per cent. This was incorrect. The IBC estimates premiums could rise between five and 15 per cent. This article has been updated.
Prime Minister Justin Trudeau acknowledged on Friday that the growing frequency of devastating wildfires will make it harder for some Canadians to obtain insurance.
Trudeau made the comments during a visit to B.C.’s Central Okanagan region to speak with local officials about ongoing responses to the ongoing wildfires in the province.
“We are facing a changing world right now, changing climate,” he said. “We’re seeing more and more intense weather events. Insurance is going to get more difficult for people to obtain, even for those who can obtain it.”
With about 370 wildfires still burning, including nearly a dozen considered fires of note, numerous homes and buildings have burned down including nearly 200 in West Kelowna following flames that tore through parts of the Central Okanagan just in the past week.
The prime minister’s comments come as insurance experts say the range of natural disasters taking place are resulting in increases for many Canadians.
Craig Stewart, the IBC vice-president for climate change and federal issues, told Global News in an interview that he estimated premiums could rise between five and 15 per cent.
Canadian insurers have seen claims totalling about $2 billion every year since 2018, Stewart said.
But those insurance costs have typically come from massive, single events rather than a “number of catastrophes” like what have been seen in 2023.
He said insurers are taking a closer look at how well communities are prepared, including trained fire responses or even possessing fire engines, as various parts of the country are seeing more disasters.
In 2023 alone, more than 15 million hectares of land have been burned during this year’s fire season – a record never seen before in the country since records began being taken. Officials have said it is the worst season on record with more than a month to go until the end of the typical fire season.
With climate change ever present, however, officials with Natural Resources and Environment and Climate Change Canada said earlier this month that it would not be unusual for fires to burn into October, and with the current widespread drought nationwide, fire activity could even continue until the first snowfall.
It’s not just fires that are causing a threat for Canadians and their insurance. From flash flooding that hit Nova Scotia to tornadoes in the Prairies and the Ottawa region all in July, there seem to be little end to storms leaving many with damaged or destroyed homes.
Anne Kleffner, professor of risk management and insurance at the University of Calgary, told Global News that while insurance companies are likely receiving many more claims than normal, government regulations require them to keep enough resources on hand so they can afford that rising number of claims. She added all-home insurance covers fire.
On Friday, Trudeau said with people facing those difficulties, it falls on the government to be there.
“That falls on all of us to be there for help, to help communities and individuals who’ve lost everything who are having to rebuild,” he said. “We need to take lessons in how to rebuild safely.
“I mean, we’ve seen the difference between neighbourhoods that were built with fire safety in mind and neighbourhoods that were built before. That was really something worth thinking about.”
Earlier this week, Trudeau said the wildfires in both B.C. and the Northwest Territories have caused “apocalyptic devastation.” A state of emergency has been declared in B.C, with all residents of the N.W.T. capital of Yellowknife having been ordered to evacuate due to an encroaching wildfire.
Military assets have also been deployed to B.C. and were helping with evacuations, staging and other logistical tasks.
The prime minister did not elaborate on how the federal government could help Canadians with insurance premiums, but added as the wildfires continue to burn, “all orders of government” would work together to help people get through the flames.
–With files from Global News’ Nathaniel Dove
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