Environment Committee on Dec. 8th, 2025

[The Chair, Liberal, Angelo Iacono]

I call the meeting to order.

Good morning, fellow members and witnesses.

Today is meeting number 20 of the Standing Committee on Environment and Sustainable Development. This meeting is taking place in a hybrid format and is in public.

We have witness testimony for two hours.

For those attending in person, please follow the health and safety guidelines found on the cards on the table to prevent audio feedback incidents.

For the witnesses, you'll be seeing this yellow card go up, indicating that you have one minute left to speak. When you see this side, I'll ask you to quickly complete your sentence so that we can move on.

The committee is beginning its study on protecting Canadian residents from extreme weather events.

This morning, we are meeting with the following witnesses.

From Aviva Canada, we have Mrs. Susan Penwarden, managing director of personal lines, who is appearing virtually; from the Institute for Catastrophic Loss Reduction, we have Paul Kovacs, founder and executive director, and Madame Sophie Guilbault, director of partnerships; and from the Intact Centre on Climate Adaptation at the University of Waterloo, we have Mr. Blair Feltmate, head.

The witnesses will have five minutes per organization for opening statements.

We will start with Susan Penwarden.

You have up to five minutes.

[Susan Penwarden, Managing Director, Personal Lines, Aviva Canada]

Thank you, Chair and committee members, for inviting me today.

I'm Susan Penwarden, managing director of personal insurance for Aviva Canada, a national property and casualty insurer serving two and a half million customers across auto, personal property and commercial insurance. I'm also the outgoing chair of the Insurance Bureau of Canada's natural catastrophe committee and co-chair of the resilient homes task force at the ICLR. All that is to say that I see first-hand both the human and economic impact of extreme weather events on Canadians from coast to coast.

As I'm sure your study will demonstrate, we must act now to protect Canadians and their assets from this ever-increasing risk. For our part, Canadian insurers continue to manage escalating claim volumes while funding community-level projects that support resilience. We share your commitment to protecting Canadians, but the scale of this challenge means we cannot do it alone. We must adopt a whole-of-society approach to solving this challenge.

What can the federal government do to support a resilient future for our nation?

Number one is a shift in mindsets. We must move away from reactive disaster recovery and toward proactive investment in risk reduction and resilience. Why? Simply put, it makes economic sense. Last year, insured losses from severe weather ballooned to $9.2 billion, a shocking sum, yet only a portion of the total economic impact. As our ICLR colleagues will highlight, we estimate that insured losses account for less than half of the total economic cost of disasters.

In contrast, investing in adaptation and resilience creates wide-reaching benefits for Canadians and the broader economy, from the mitigation of direct losses to the ability of local economies to recover quickly. Through investments in research centres like ICLR, our industry knows how homes can be built to withstand these threats. We've invested in putting that knowledge to the test, right now with two pilots in southern Alberta, in partnership with both the ICLR and Habitat for Humanity.

With this knowledge, Canada could become a leader in adaptation, but we need the federal government's help to scale what works. This means updating the National Building Code and ensuring adaptation is at the core of the new Build Canada Homes agency framework. It also means supporting the manufacture of resilient building materials to improve their supply, making necessary upgrades cheaper for Canadians while also generating economy-wide benefits. At a municipal level, it's equally urgent for all levels of government to work together to ensure that critical infrastructure is upgraded to meet the demands of future weather conditions.

This leads me to point number two: We need to close the adaptation funding gap through better capital allocation. The $2-billion disaster mitigation adaptation fund was massively oversubscribed. For perspective, it's estimated that Toronto alone needs $26 billion in infrastructure improvements to withstand severe weather. We need to give adaptation the urgency it deserves.

Point number three, we need to ensure that all Canadians have adequate protection against flooding, which is Canada's greatest climate-related risk. Today, more than 1.5 million homes—or 10% of the current housing stock—are built in areas of high-risk flooding. In effect, these properties are becoming uninsurable. This is why you must continue to work on a national flood insurance program that is complementary to the private insurance industry and will provide protection for those high-risk homes.

However, this has to be a sustainable solution. Over the long term, the program must also incorporate elements of adaptation to reduce risks over time, while also discouraging local governments from steering future development towards these high-risk areas.

Finally, we have point four. Our industry, alongside coalitions like Climate Proof Canada, is urging the federal government to create a national emergency management agency to improve coordination for disaster preparedness, response and recovery.

We were glad to see the federal government's recent launch of a new weather alert system. This is an important step towards helping Canadians to protect themselves. However, Canada remains the only G7 country without a dedicated national emergency management agency, which would greatly enhance national coordination, strengthen resilience and reduce the financial toll of natural catastrophes.

To close my remarks, I must emphasize again that severe weather directly impacts people, their communities and our economy. The scale of the threat in the future depends on what we do today. If we act now by making meaningful investment in resilience a national priority, scaling the adoption of evidence-based solutions and better coordinating national disaster recovery and preparedness response, then we not only protect Canadians today but also shift the economic trajectory of our nation and transform risk into an opportunity.

With your support, we are ready to work with you to make adaptation part of Canada’s economic strength.

Thank you.

[The Chair, Liberal, Angelo Iacono]

Thank you, Ms. Penwarden.

The floor is yours, Mr. Kovacs, for five minutes.

[Paul Kovacs, Founder and Executive Director, Institute for Catastrophic Loss Reduction]

My name is Paul Kovacs. I'm the founder and executive director of the Institute for Catastrophic Loss Reduction.

Sophie's going to lead for us, and then I'll follow with some advice.

[Sophie Guilbault, Director of Partnerships, Institute for Catastrophic Loss Reduction]

Good morning. My name is Sophie Guilbault, and I'm the director of partnerships at the Institute for Catastrophic Loss Reduction. I also colead the Canadian Centre for Recovery and Resilience.

Thanks for the opportunity to appear in front of you today. The purpose of ICLR is to build disaster-resilient communities. We look forward to sharing our advice with you today.

ICLR recently published a database tracking the history of societal insured and uninsured losses from extreme weather damage. In 1994, Canada experienced a third of a billion dollars in losses. Last year, we experienced $13 billion in damage, which includes $7 billion paid by insurance companies. Damage increased by 9.4% a year over several decades, which I'm sure you can agree is a trend that is very much unsustainable.

The good news is that most of these $13 billion in losses last year were preventable. We know what to do. We know which locations in Canada are at high risk. We know what the three or four essential actions are that can be taken to reduce the risk of severe damage to homes from different hazards. Often, these three or four actions can be accomplished for under $15,000 per home. We know that each dollar invested in resilience likely results in five to 10 dollars or more in terms of future avoided losses.

I want to give some examples of how we know how to protect homes at risk. This is from the flooding that happened in Montreal and Toronto last year. The insurance companies paid $3.5 billion to 100,000 homeowners who had to clean up their basements of polluted water. We know that on top of the insured claims, there was likely over $1 billion of damage to homes without insurance.

Less than 10% of homes take preventative actions like putting in a backwater valve or a sump pump, or having landscaping that slopes the water away from their homes. Those are all measures that can be easily implemented and can significantly reduce these costs.

Next, in British Columbia, we see on this slide that a house was protected from wildfire by implementing things like a class A fire-resistant roof and fire-resilient cladding, as well as a 1.5-metre non-combustible zone around the property, which stood up through the fire, as opposed to the neighbouring home, which was completely destroyed. We've seen these cases in many communities in Canada when we did forensic investigations in Jasper, Kelowna and all these places.

Finally, in Calgary last summer, we had a roof that was previously rehabilitated with impact-resistant shingles following a hailstorm. The other half of the roof was not. You can see significant differences in damage. Similarly, if you look at the siding of the two homes next to each other, we see severe losses from wind-driven hail, with the house on the right having vinyl siding that was severely impacted. The one with impact-resistant siding is on the left.

There is some good news in what we're sharing. We know how to reduce damage, but we must take actions like these to reduce unsustainable trends.

[Paul Kovacs]

Thank you, Sophie.

We're rushing a bit, trying to respect your time.

I'm going to close with three recommendations.

First, the Government of Canada should establish national building codes by 2030 to protect Canadian homes from flooding, wildfire, hail and severe wind. Again, we know what to do; we just need to codify it by putting it in the codes.

Second, Public Safety Canada should partner with the provincial and territorial governments and the insurance industry, with the focus always being on building back better with resilience after a loss. After you experience a loss to your home or your community, the expectation always should be to build back better. The federal government took an important first step earlier this year with the modification of the disaster financial assistance arrangements. The need now is to coordinate the federal opportunity with provincial follow-through and to collaborate with the insurance industry.

Our third and final recommendation today, which Susan started on and we strongly agree with, is that we need a coordinated approach to proactively encourage homeowners to implement the advice and changes that are needed. At the moment, the municipal governments and insurance companies have been bringing in a number of incentives in different communities, in different ways. We do not yet have a national collaboration whereby the federal government and provincial governments work with the others who benefit when a home is prepared, when a community is prepared. There are big savings that can be made. We think a dollar can save five to 10 dollars more. At the moment, you have municipal governments stepping up to some extent, and you have insurance companies stepping up. We are looking for the federal and provincial governments to have this collaboration, this overall pre-event, “Let's get homes ready, and let's do all these things that our science shows can be done.”

To conclude, thank you for the opportunity. We want to share with you that there is a crisis going on in the United States, where they have failed to deal with the same issue that's confronting us. In my opinion, we are not in crisis, but we're going the wrong way very fast. The losses are going up, and we know what to do about it. The fact that the Americans didn't do it is not a good excuse. We need to get on with doing the right things. We need to proactively invest in risk reduction. We need to take advantage after a loss. We need to put in building codes, so that we do this before any risk comes along. We think this does not need to become a crisis, but unfortunately we're going the wrong way fast.

Thank you.

[The Chair, Liberal, Angelo Iacono]

Thank you, Ms. Guilbault.

Thank you, Mr. Kovacs.

The floor is yours for five minutes, Mr. Feltmate.

[Blair Feltmate, Head, Intact Centre on Climate Adaptation, University of Waterloo]

Thank you very much.

My name is Dr. Blair Feltmate, and I appreciate the opportunity to meet with you. I'm head of the Intact Centre on Climate Adaptation, housed within the Faculty of Environment at the University of Waterloo.

I'm pleased to discuss the challenging topic of protecting Canadian residents from extreme weather events. More specifically, I'll zero in on how Canadians can protect themselves from residential basement flooding, which is the number one cost of climate change in Canada, and I'll then turn to residential wildfire protection.

As you will see, there is much that the federal government can do that is currently not being done to help homeowners help themselves to limit their exposure to the growing financial burden of flooding and wildfire. Before turning to these actions, let me just paint the picture of the formidability of the challenge we're facing in terms of insurance costs impacting Canada's housing market.

I've shared a graph with you that profiles insured losses for Canada from 1983 to the present. What matters most on this figure is the shape of the curve. It's bending upwards sharply, which means that the costs of flooding and wildfires are getting worse faster. This is not where Canada wants to be. To go a bit further, as a result of growing extreme weather, 10% of Canada's housing stock—that's 1.5 million homes—is no longer insurable for flood risk. That's one in 10 homeowners who are unable to insure their biggest financial investment and their retirement plan, their home.

No insurance is a problem for many, given that the average cost of a flooded basement in this country right now is $54,000. In Quebec, in communities where flood risk exceeds 5% in a given year, Desjardins has stopped renewing mortgages. This trend will continue across Canada if we don't get ahead of the curve on adaptation. Over the past 12 years in Canada, for homes and communities impacted by catastrophic flooding, the resale value of homes dropped by 8%, which has changed the loan-to-value ratio on mortgages.

Our group, the Intact centre, will soon release a new report documenting that, for homeowners living in flood-impacted neighbourhoods, we see spikes in the costs of medications to cope with mental stress, psychosocial stress, counselling services and lost time for work. These are your constituents who are suffering.

Turning to some wildfire facts, State Farm and Allstate have stopped writing home fire insurance in California and Arizona. Without fire insurance, you cannot secure a mortgage, which renders a home a stranded asset. In Canada, we need to understand, as Paul referenced, that we are not immune to a California-style situation.

Now that we've covered the bad news, the depressing stuff, let's turn to some good news, starting with the return on investment associated with preparing homes for flooding and wildfire. Notably, one dollar invested in adaptation produces, in avoided losses per decade, about three to eight dollars. What does adaptation look like for Canadian homeowners? This leads us to the infographics I've shared with you, starting with three steps to cost-effective home flood protection.

In the interest of time, I'll leave similar infographics that focus on community flood and wildfire protection for another day. The information presented on the infographic is based on input from the Standards Council of Canada, the Canadian Red Cross, the Insurance Bureau of Canada, and scores of subject matter experts.

Along the top row of the infographic, you see steps that a homeowner can take to protect their home for $0 to lower their flood exposure. Actions can be as simple as checking that a sump pump works by adding water to a sump well and seeing if the pump turns on and pumps water outside. Most people find out that their sump pump doesn't work when they walk into three feet of sewer water in their basement. For a bit more effort, a battery backup supply can be connected to a sump pump to keep it running in the event of an electricity outage, which is very common during major precipitation events.

Turning to wildfire risks, three steps to a cost-effective, fire-smart home, the material I shared with you, show that many simple actions can be taken to limit exposure to wildfire, such as removing shrubs from within a few metres of a house and replacing them with nonburnable materials.

These infographics, the ones I've shared with you, motivate homeowners to act, and this is the key point. Upon receiving infographics, within six months, 70% of homeowners take at least two steps, two actions, to protect their home that they otherwise would not take.

Currently, the infographics on flood and wildfire risk are being shared with customers of major Canadian banks, RBC and BMO, credit unions such as Meridian Credit Union, and property and casualty insurers' customers and clients.

Through these distribution channels, the infographics are currently being shared with about 3.5 million Canadian homeowners twice per year. The federal government could help Canadian homeowners to protect their homes by distributing flood and wildfire infographics on Government of Canada websites like those of Environment and Climate Change Canada, Public Safety Canada and Housing, Infrastructure and Communities.

[The Chair, Liberal, Angelo Iacono]

Thank you.

[Blair Feltmate]

I'll finish my last sentence.

Canada's national adaptation strategy, published in 2023, stipulated that by 2025, 50% of Canadians would have taken concrete actions to better prepare for and respond to climate change risks facing their households. The infographics I've shared offer a proven means to meet this NAS, or national adaptation strategy, target.

Thank you.

[The Chair, Liberal, Angelo Iacono]

Thank you, Dr. Feltmate.

Now we will start with Mr. Lloyd of the Conservative Party for six minutes.

[Dane Lloyd, Conservative, Parkland, AB]

Thank you for having me at committee today. I'm not a regular member.

Thank you to the witnesses for being here today.

I'll start with Ms. Penwarden.

We're talking about creating incentives for people to protect their own properties. I noticed there was no recommendation to provide a tax credit for mitigating fire or flood risk in homes.

Is that something you think would be useful in encouraging Canadians in high-risk areas to protect their homes?

[Susan Penwarden]

I think anything we can do to help Canadians pay attention to this would be good.

There are a number of actions and incentives—for example, at the municipal level—at the moment that are provided by the government. People can access them freely.

Our main challenge, if I'm honest, is making everyone aware of those things and then encouraging them to actually act. There's an education and action component, and if they worked together, I think we would see a bigger take-up.

There are definitely options around that.

[Dane Lloyd, Conservative, Parkland, AB]

Thank you.

I have an anecdote. I was visiting Kelowna this summer on a wildfire tour, and they had just done a FireSmart program where they were telling people to remove the juniper bushes next to their properties, yet the local school was doing a fundraiser a week later, selling people juniper bushes so they could plant them right next to their properties.

You're right; there is a lack of education.

Mr. Kovacs or Ms. Guilbault, what are your thoughts on a tax credit for home renovations like putting in sprinkler systems or flood mitigation systems?

[Paul Kovacs]

We're fully onside. As Susan said, any incentives are a good thing, as is anything that creates awareness.

We've been promoting more coordination, so we'd like to see the federal government coordinating with the provinces, the municipal governments and the insurance industry in a unified approach. Tax incentives can be a very helpful part of that.

[Dane Lloyd, Conservative, Parkland, AB]

Over the past number of years—at least five years that I've been watching it—I know there's been a lot of talk about creating a national flood insurance policy. That doesn't cover it all, but as you said, Dr. Feltmate, basement flooding is the largest insurable loss in Canada currently.

Do you know where we are on a national flood insurance policy in this country?

[Blair Feltmate]

Right now, it remains a work in progress.

There's a group called Climate Proof Canada, which is an assemblage of insurers, NGOs and academics who are looking at what steps would need to be engaged to launch this program.

Right now, I think it's in a stationary status. It's not moving forward or backward at the moment, I don't think.

[Dane Lloyd, Conservative, Parkland, AB]

Okay.

Mr. Kovacs, would you like to comment?

[Paul Kovacs]

I'd only add that maybe 10% of homeowners can't get flood insurance right now. To make a decision to put a program in place is something we need right now.

[Dane Lloyd, Conservative, Parkland, AB]

The program wouldn't be for the 90% who don't need it. It would be for the 10% of people who can't get insurance coverage. Is that correct?

[Paul Kovacs]

Yes. The majority of us live in places where the risk of river flooding is not serious—90% or so—and flood insurance is offered in the private sector. It's been taken up quite a bit. It's fairly affordable.

The problem is for those with high or extreme risk; that's where most of the flooding happens and where most of the risk is. To move forward and make a decision to have a program would be very helpful.

[Dane Lloyd, Conservative, Parkland, AB]

I've seen some different models. The Americans have a model through FEMA, and I think the U.K. has just launched a model.

What are some recommendations you could make for things to avoid if you were crafting such a policy based on those of our allies?

[Paul Kovacs]

I'm going to sound flippant, but usually what the Americans do does not work.

[Dane Lloyd, Conservative, Parkland, AB]

I see there's about a $20-billion shortfall in their program through FEMA.

I see that the U.K. had a policy whereby they would provide subsidies for the insurance premiums for only 25 years. Can you tell us why that is? Do you know why that is?

[Paul Kovacs]

Frankly, coming up with a program so that all Canadians would be protected against flood and other hazards—so that they have insurance if they experience a loss, they can recover and there's money available—is really important. That's really critical to have.

What's better than having a program where money is paid after a loss is to not have loss. The commitment in the U.K. was to try, over 25 years, for a national effort to avoid any risk of loss by putting in flood defences and all kinds of protection.

Some of us are a little skeptical as to whether that will be completed in 25 years and whether there's enough funding, but the concept was that it would take some time—25 years was the time chosen politically—to not need flood insurance because you'd have protection.