Extreme weather events such as wildfires in British Columbia and the Northwest Territories, floods in Manitoba, and heat waves in Eastern Canada are taking a toll on Canadians financially. According to a recent report from Statistics Canada, rising insurance premiums are being driven by these extreme weather occurrences, including floods and fires.
The changing weather patterns in Canada, characterized by hotter, drier summers and warmer, wetter winters, are leading to more intense wildfires and flooding, as stated by Aaron Sutherland, Pacific vice-president of the Insurance Bureau of Canada. These events are exacerbated by climate change.
Insurance claims for storms, wildfires, and floods have significantly increased in recent years, from a few hundred million dollars annually to over $2 billion per year, with a peak close to $10 billion. This surge in claims is putting pressure on insurance premiums nationwide.
Homeowners directly pay these increased premiums to insurance companies, while renters may also be indirectly affected through higher premiums passed on by landlords. Over the past five years, flooding has been a major driver of insured losses in Canada, contributing to sustained upward pressure on home insurance premiums.
In 2024, Canada experienced its highest level of catastrophic weather claims, amounting to $8.6 billion, making it the hottest year on record both domestically and globally. Notable events included a $3 billion Calgary hailstorm, a $1.1 billion wildfire in Jasper, $2.7 billion in flooding in Quebec, and $990 million in flooding in Ontario.
The StatsCan report highlighted that Alberta has been particularly impacted by extreme weather events, leading to a significant increase in home and mortgage insurance premiums. The province has been termed the “catastrophe capital” due to the high frequency of costly weather events.
While insurers cover a portion of the damages, uninsured losses, including municipal infrastructure damage, are typically borne by taxpayers through government assistance programs. The federal Disaster Financial Assistance Arrangements Program has paid out over $14 billion since 1970, with costs expected to rise in the coming years.
Adaptation is crucial for managing costs and mitigating the impact of extreme weather events. Despite a more stable weather year in 2025, consumers are advised to prepare for future challenges posed by changing weather patterns. Increased federal funding for disaster mitigation aims to incentivize provinces and regions to invest in resilient infrastructure for long-term protection against floods and wildfires.