Evidence of meeting #20 for Environment and Sustainable Development in the 45th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was homes.
A recording is available from Parliament.
Liberal
Bruce Fanjoy Liberal Carleton, ON
Okay. Thank you.
I believe it was you, Mr. Feltmate, who presented the graph showing the increased rate of insured losses over the years.
My first question is, were those inflation-adjusted numbers?
Head, Intact Centre on Climate Adaptation, University of Waterloo
Well, it's adjusted for inflation and for per-capita wealth accumulation. In other words, if you were insuring twice as many homes today as 10 years ago, you'd assume insurance would be twice as high. That's taken into account.
Horizontally, you were looking at a comparison of apples to apples.
Liberal
Bruce Fanjoy Liberal Carleton, ON
Okay. That's good.
It was a curve, and it was one that was getting steeper. It's hard to imagine a more existential crisis for an insurance industry than unmitigated climate change. How prepared is the insurance industry for that curve to get steeper?
Head, Intact Centre on Climate Adaptation, University of Waterloo
I'm not speaking for the insurance industry, but overall there are about 160 property and casualty insurance companies in Canada, or something in that order. I could say that some are very well prepared. It tends to be those at the larger end of the equation that are much better prepared than others, but there's a lot of variance in the system.
Liberal
Bruce Fanjoy Liberal Carleton, ON
What about the different levels of government? You mentioned that municipal governments and the insurance industry are working quite well together. You were leaving provinces and the federal government out, I noted.
How big is the gap? What would you like to see?
Head, Intact Centre on Climate Adaptation, University of Waterloo
From my perspective, I have spent a great deal of time with mayors and councillors across this country. I would say that something like nine out of 10 mayors, when you show them what they need to do and the actions they need to take in their communities to help their constituents not end up with a flooded basement or the house burned down, get it instantly, within five or 10 minutes. They want to mobilize action to mitigate the risk.
Adaptation in Canada is moving forward at the level of the municipality.
Conservative
The Vice-Chair Conservative Ellis Ross
To all our witnesses, thank you very much for that testimony. Thank you very much for all that. It was very enlightening.
We will now suspend and give our staff time to get our next round of witnesses in for round two.
Liberal
The Chair Liberal Angelo Iacono
The meeting is resuming.
The committee is continuing its study on protecting Canadian residents from extreme weather events.
This afternoon we are meeting with the following witnesses: as an individual, Mr. Craig Stewart, author; from the Corporation of the City of Markham, Robert Muir, manager, stormwater and environmental services. From Wawanesa Mutual, we have David Leibl, vice-president, sustainability and corporate affairs; and Mitchell McEwen, director, sustainability and climate affairs. Welcome to you all.
The witnesses will have five minutes per organization for opening statements. I will hold up this card to indicate that you have a minute left. When I hold up the back side of the card, it means that you are out of time; please finish your sentence, so that we can move on.
We start with Mr. Craig Stewart. You have five minutes.
Craig Stewart Author, As an Individual
Good afternoon. Thank you, Mr. Chair and distinguished committee members, for the opportunity to speak to you about your present study on protecting Canadian residents from extreme weather events.
For the past decade, I have worked closely with many of your other panellists, leading advocacy work for the property and casualty insurance industry on disaster resilience. In that capacity, I founded a national advocacy coalition called Climate Proof Canada, co-chaired the disaster resilience and advisory committee for Canada's first national adaptation strategy, and co-chaired the national advisory committee on flood insurance. I have now left IBC and speak only as an individual expert. My opinions are my own.
Seventy-one years ago, on October 15, 1954, Canada experienced its worst natural disaster in modern times, when hurricane Hazel swept through southern Ontario, claiming 81 lives. The regional government of Metropolitan Toronto had been formed that very year and, together with the provincial government of Leslie Frost and the federal government of Louis St. Laurent, collaborated on swift action to ensure Ontarians and Canadians would be better prepared for hurricanes in the future.
St. Laurent and Frost—one a Liberal and the other a PC—collaborated in appointing a royal commission. As a result of that commission's findings, the Toronto and Region Conservation Authority was formed, within three years, to oversee management and flood control across nine watersheds; the dominion weather bureau was resourced to provide better flood forecasting and alerts during severe weather events; and, most importantly, the Conservation Authorities Act in Ontario was modified to allow authorities to procure land and regulate development in flood plains, paving the way for the establishment of the greenbelt. Today, Toronto residents are safer, and flood losses in Ontario are fewer because of the focused collaboration between the Frost and St. Laurent governments in the lee of hurricane Hazel—all this from one event.
Now to look at the present, in our work preparing the national adaptation strategy, Canadian experts identified three risk factors related to extreme weather events: hazard, exposure and vulnerability.
The first factor is the hazard itself—flood, wind, hail, wildfire—and is usually determined by geography. For example, if you live in a dry, coniferous forest, you may face wildfire risk, or if you live in a valley bottom next to a river, you may face flood risk. However, that does not determine your outcome.
The second factor involves exposure to that hazard. If your home is built with fire-resistant materials in a fire-smart community, your exposure to wildfire can be decreased. The massive investment in the Red River floodway in the 1960s reduced flood exposure for most of the city of Winnipeg.
The third factor involves personal vulnerability. Two neighbours facing the same hazard with the same degree of exposure may face very different outcomes, based on either their financial or health-related situations. If one person, for instance, has chronic obstructive pulmonary disorder, they are more vulnerable, and their health may be impacted much more severely by extreme heat or wildfire smoke than a neighbour's. If one is better protected by their insurance policy or has ample savings, they may be less financially vulnerable and better able to recover financially from extreme weather losses than one who does not. Therefore, a financially sustainable path forward to protect Canadian residents from extreme weather should include measures to reduce both household exposure and personal vulnerability.
Household exposure can be reduced by some of the measures you've heard already: retrofitting homes to make them more climate-resilient, building new homes to higher resilience standards, implementing defensive infrastructure and ensuring communities are fire-smart. Personal vulnerability can be reduced by ensuring that we identify vulnerable populations in advance of extreme heat and wildfire smoke events and provide necessary supports to them. Financial vulnerability can be addressed by ensuring that public insurance programming is in place when private insurance is no longer available, starting with high-risk flood.
Finally, there has been too little collaboration, beyond the programmatic level, among orders of government. The development of the national adaptation strategy did not engage other orders of government in a meaningful way. Ongoing disaster preparedness discussions do occur at federal-provincial-territorial tables, such as among the senior officials responsible for emergency management, but we need to strengthen this base. Politicians have collaborated, with urgency, across orders of government and political parties in the past. All that is needed now is sufficient political will.
Liberal
The Chair Liberal Angelo Iacono
Thank you, Mr. Stewart.
Mr. Muir, the floor is yours for five minutes.
Robert Muir Manager, Stormwater, Environmental Services, Corporation of the City of Markham
Thank you.
Good day, and thank you for the opportunity to support the work of the committee and speak on the important topic of extreme weather damages.
I'm Robert Muir. I'm a professional engineer who has practised across the country for 35 years, specializing in flood hazard and stormwater management for natural and urban systems. I'm currently the manager of stormwater at the City of Markham, where we developed a long-term, $386-million flood control program to reduce flood risks. The program, now in its 12th year of project construction, reduces sewer backup and overland and river flood risks through proven, cost-effective means.
Prior to joining the city, I was a partner at Dillon Consulting Limited, where I was the national water resources practice leader. My work there included developing and reviewing city-wide master plans to reduce risk in municipalities like Stratford and Windsor, Ontario.
In Markham and in the private sector, I've been active in the development of flood management guidelines, including Natural Resources Canada's federal guidelines on flood hazard identification and priority setting; the CSA standard, “CSA W210:21, Prioritization of flood risk in existing communities”; and the National Research Council's cost-benefit guideline, whose full title is “Guidelines on undertaking a comprehensive analysis of benefits, costs and uncertainties of storm drainage and flood control infrastructure in a changing climate”.
I'd like to draw from these NRC guidelines to comment on the October 6 motion by the committee. On economic losses, the motion states “that...insured losses alone...don't adequately represent [all public] economic losses”. Data provided by Munich Re and presented in the NRC guidelines supports that motion's statement. Specifically, expected uninsured losses were estimated to be over 90% of reported insured losses.
On finding a financially sustainable path forward to protect Canadians, the federal government has already taken important steps to reduce costs and risks. One step is through supporting guidelines for risk prioritization to guide its partners in identifying worthwhile projects. Another step is through grant funding like Housing, Infrastructure and Communities Canada's disaster mitigation and adaptation fund, DMAF, which funds 40% of project design and construction costs.
In Markham, five sewer upgrade projects have been completed with generous DMAF grant support, and more projects, including naturalized flood plain reclamation, are now ongoing.
In my opinion, the DMAF program is a strong template for financially sustainable risk reduction efforts, as it requires a minimum project benefit-cost ratio of 2:1 for approval. This was a unique requirement for infrastructure funding in Canada. A review of over 20 approved DMAF projects in our NRC guidelines showed ratios between 5.5 and 17 to one, showing the high cost-effectiveness of approved projects.
In the future, additional DMAF-type funding can continue to cost-effectively reduce risks across Canada. How much funding? I'm glad you asked, as the NRC guidelines included a case study to answer this specific question. We estimated that the 10-year national infrastructure project spending that could be justified based on damage reduction benefits was $28 billion. This compares with the $9.5 billion in project spending that DMAF program grants of $3.8 billion could support today.
In conclusion, three times more spending can be justified, even with pre-2024 extreme weather and damages. Increased weather risks and damage would only increase the benefits of project spending.
In closing, I'd be pleased to submit a brief on the above, including some further recommendations on tracking losses to help assess risk reduction effectiveness over time.
Thank you.
Liberal
The Chair Liberal Angelo Iacono
Thank you, Mr. Muir.
The floor is yours, Mr. Leibl, for five minutes.
David Leibl Vice President, Sustainability and Corporate Affairs, Wawanesa Mutual
Thank you, Mr. Chair and members of the committee.
I'm very pleased to be here on behalf of Wawanesa Insurance to join this important conversation.
Wawanesa is a national insurer. We insure just under two million Canadians across Canada. We are a mutual insurer, which means we're owned by the Canadians we are privileged to protect.
We've been in business for about 130 years. That is a very long time, but there is no precedent for what we're seeing now when it comes to the impacts of severe weather on the communities that we're fortunate to serve.
If you were in downtown Winnipeg this summer, where our headquarters are located, you would have had a front-row seat to something that was certainly unprecedented, at least in this part of Canada. Our headquarters are immediately adjacent to the Winnipeg convention centre, which was filled this summer not with conference delegates but with wildfire evacuees, as was the case with hotels across Winnipeg. It was a front-row seat to very significant human hardship and disruption, with people displaced from their communities.
We are doing our best as a mutual insurer—as other insurers are trying to do—to be part of the solution. In the past three years alone, we've committed over $5 million to people and organizations on the front line of climate change. This committee has heard about the gap when it comes to adaptation spending, and that's where we're directing a significant allocation of our funds.
However, we of course need a whole-of-society approach; the committee has heard that many times today, and there are many levers that only government can pull.
I'll share my time with my colleague, Mitch McEwen. I'm glad to take any questions.
Thank you.
Mitchell McEwen Director, Sustainability and Climate Resilience, Wawanesa Mutual
Thank you, Mr. Chair and members of the committee.
Extreme weather is no longer a future projection; it's a present reality. Protecting Canadians now requires a more proactive, collaborative approach across government, industry and communities.
Insurance is fundamentally a promise to be there when people need us the most. The growing frequency and severity of climate change-fuelled extreme weather is threatening that promise, and the industry cannot solve it alone. The solution is reducing losses in the first place and making recovery faster and more predictable for Canadians.
We recommend three priority areas.
The first is building climate-ready homes and infrastructure. Canada needs modernized building standards, land-use planning and clear national resilience standards. Federal investments should focus on the highest-risk communities and support municipalities as they upgrade infrastructure that keeps people safe.
The second is to strengthen disaster recovery. Canadians in the highest-risk areas need predictable financial protection after major events, including a national flood insurance program and a federal earthquake backstop. Recovery also depends on the ability of local governments to manage prolonged rebuilding and re-entry efforts.
The third is to help Canadians take practical action. Homeowners want to reduce their risk but often lack clear guidance. Canada needs consistent standards and accessible incentives for proven resilience measures like fire-resistant materials and wind- and hail-resistant roofs.
Wawanesa is already making investments in community resilience, such as by sponsorship of the Institute for Catastrophic Loss Reduction's resilience display in Winnipeg and providing 35 wildfire prevention grants across Canada since 2022.
Neither the government nor the private sector can solve climate impacts alone. Government brings the scale and public infrastructure, and insurers bring the risk and on-the-ground experience. Partnerships let us move from reacting to disasters towards preventing them, and they are the most efficient way to protect lives, reduce losses and keep insurance coverage available and affordable for Canadians.
In closing, Wawanesa is committed to working with the government and industry partners to make these solutions a reality.
Thank you, Mr. Chair and members of the committee. We would be pleased to answer any questions.
Liberal
Conservative
Dane Lloyd Conservative Parkland, AB
Thank you.
Thank you to the witnesses.
Mr. Stewart, are you familiar with the “Adapting to Rising Flood Risk” report? I found it very interesting. This report estimates, as of 2020 numbers, that there's about $3 billion in annual flood risk, and 34% of that risk is to 1% of all properties.
Can you tell us a bit more about that?
Author, As an Individual
Yes. The report essentially says that the top 10% account for about 90% of the risk.
The financial exposure to flooding is highly concentrated in that top 10% of Canadians who can't presently obtain adequate flood insurance.
Conservative
Dane Lloyd Conservative Parkland, AB
It was pretty shocking to me that probably over $1 billion now is just for that 1% of properties.
It starts to make me wonder whether there is any insurance policy out there that can mitigate risk, when it's 1% of properties facing 34% of the risk. What are the other options you think the government should be looking at and working on with communities to mitigate this risk?
Author, As an Individual
As you've heard, investments in infrastructure, like focusing.... If another DMAF program were to be funded, focusing that infrastructure spending on that 1%, on those at highest risk, is going to provide the best return on investment. Where insurers are still playing a role with flood is in insuring the 90% where unpredictable risk is happening. We're getting these significant rainfall events, such as what happened last summer in southern Ontario and Quebec and what happened in 2023 in Nova Scotia. These were unpredictable events where there were significant...billions of dollars in flood losses, but—
Conservative
Dane Lloyd Conservative Parkland, AB
Thank you.
I actually toured Grand Forks this summer. They had a significant flood event a number of years ago. They did receive some DMAF funding, but they actually had to buy out an entire neighbourhood because there was no way, even with $100 million extra, that they could protect that neighbourhood. People were saying that it was a big issue, because once this flood happened, the value of those properties dropped by two-thirds. This is people's livelihoods, so they actually had to come forward and agree to pay the people out something close to the pre-flood value of their property. These were mostly low-income and fixed-income people.
Is there a policy that says that maybe we should be moving people out of their communities? Is that the most cost-effective way?
Author, As an Individual
That is the most expensive and most difficult decision to make. It has been made in High River, Alberta. It's been made along the Bow River in Calgary. It's been made across the river here, in Gatineau.
Conservative
Dane Lloyd Conservative Parkland, AB
You say that it's the most expensive, but in this case, they ruled that it was cheaper to do than mitigating, so it's not always the most expensive, is it?
Author, As an Individual
It's the most politically difficult, because you're disrupting people, and they don't necessarily want to move. In Calgary, where the offer was made—and it was voluntary—along the Elbow Park part of Calgary, I think about one in three households decided to move, and that was right after they'd been flooded. The others decided that they wanted to stay.
Conservative
Dane Lloyd Conservative Parkland, AB
I'm going to go to our insurance friends here.
If there were to be a national flood insurance program, this report that I was citing says that a mandatory opt-in would probably be the best way to ensure that they have the widest coverage. However, I've been told that the federal government's mandating an opt-in infringes on provincial responsibility. Can you elaborate on that issue?
Vice President, Sustainability and Corporate Affairs, Wawanesa Mutual
I think this underscores the need to have a nationally led dialogue. This is because where we've seen challenges in implementation so far is, in part, around interjurisdictional authority and responsibility. A federal-led discussion is key. We do need all stakeholders at the table to continue to drive the best form of implementation.
Certainly, as insurers, this is something for which we've been advocating for a very long time. My colleague Craig Stewart, in his former role on behalf of the IBC, was leading that discussion. The position that we've certainly taken as an insurer—and that I think others have taken—is that we will work with government to establish the right framework for Canadians.