As Canada experiences more frequent severe weather, we can’t afford to keep building for yesterday’s climate
Canada is experiencing a housing supply shortage that is affecting millions of people. In fact, the country could face a shortage of 3.5 million housing units by 2030. The Canada Mortgage and Housing Corporation estimates Canada needs a 35% increase in homes by that time to meet its housing affordability targets. We need more homes and to achieve our collective goals, therefore it’s important that construction is fast-tracked as much as possible.
Yes, Canada needs more homes, but if they aren’t built in the right way and in the right places, we could be headed for an affordability and insurability crisis. Last year was the most expensive on record in Canada for catastrophic weather events, with over $8.5 billion in insured damage and 228,000 insurance claims during the summer alone. These extreme weather events are important reminders of the need to increase investments to better protect communities.
As Canada experiences more frequent and severe natural catastrophes, all orders of government, and by extension taxpayers, are on the hook for billions of dollars in repairs and disaster relief. Canadians also bear the hard-to-quantify costs of lives disrupted, homes and possessions lost, and financial hardship experienced by individuals, families and businesses.
The urgency to build homes must be balanced with the long-term considerations of making them resilient to Canada’s climate and the rise in natural catastrophes. That means improving building codes, not building new homes in high-risk flood and wildfire zones, and ensuring homeowners understand the risks they face and how they can reduce those risks. The most expensive house is the one you have to build twice.
No homeowner wants to experience a major flood or wildfire, yet in most provinces and territories, gaps in land use policies allow housing to be built in high-hazard zones. According to a report just released by the Canadian Climate Institute (CCI) titled “Close to Home: How to Build More Housing in a Changing Climate,” (“Close to Home”) more than 540,000 homes could be built in flood hazard zones by 2030. This could result in up to $2 billion every year in additional damage to housing in Canada from flooding alone, with the highest costs occurring in major urban areas, according to “Close to Home.” Wildfires could add another $1.1 billion a year in damage. Therefore, more than $3 billion a year could be saved by avoiding building in high-risk areas.
Building with resilient materials can also avoid costly repairs. As of February 2025, the tally for Calgary’s record-breaking hailstorm in August 2024 rose to a total insured loss now estimated to be $3.25 billion, according to Catastrophe Indices and Quantification Inc. (CatIQ). The storm is the second-costliest disaster in Canadian history for insured losses and resulted in more than 130,000 insurance claims. However, homeowners who experienced damage can reduce or eliminate the chance of future loss by repairing their roofing, siding and windows with hail-resistant materials. (IBC’s website has more tips for homeowners on preventing damage from hail, floods, fire and windstorms.)
With severe weather-related losses continuing to escalate across our country, catastrophic events are having a disproportionate impact on home insurance costs. Since 2019, Canada has experienced a 115% increase in the number of claims for personal property damage and a 485% increase in the costs for repairing and replacing personal property.
Building for our current and future climate should be considered an investment rather than an expense. In fact, a 2022 report by CCI shows that every dollar spent on some of the most important adaptation measures for Canada can save $13 to $15 in the long term.
Unfortunately, the analysis in “Close to Home” concludes that, “without policy changes, much new housing will be built in high-hazard flood and wildfire zones across the country, resulting in billions of dollars in additional damage every year.”
But by directing new housing away from hazard zones and strengthening land use policies, governments can still meet the demand for new homes without putting more homeowners at risk of natural disasters.
Canadians also need their governments at all levels to collaborate and protect residents from ever-escalating natural catastrophes. Meaningful investments in climate adaptation include:
Developing new infrastructure, both built and natural, to defend communities against floods, wildfires and extreme heat.
Investing in the principles of the FireSmart wildfire prevention program in communities with high-risk wildfire zones.
Improving building codes to include climate adaptation and require the use of more resilient methods and materials. (Municipal planning and permitting should discourage new builds in high-risk locations).
Offering incentives to relocate homes and businesses away from high-risk areas when the risk and the recurring costs are too high.
The property and casualty insurance industry has been playing a leading role in helping communities adapt to severe weather and continues to call on all orders of government to take immediate action to mitigate the impacts of severe weather and better protect communities.
