Federal government agrees that climate adaptation saves money, analysts question funding

Canada’s first-ever climate adaptation strategy was little more than six weeks old when fast-moving wildfires swept through communities in British Columbia’s southern Interior, forcing thousands to flee and destroying hundreds of homes.

It was part of Canada’s record-breaking summer of fire — more than 19,000 Yellowknife residents were ordered to escape a threatening blaze, fire ripped into suburban Halifax and smoke from fires in Quebec blanketed New York City and Washington, D.C. Some 200,000 people were evacuated from their homes across Canada.

There was also flooding in Nova Scotia that killed four people.

The disastrous events provided a taste of the worsening impacts of climate change, and recovering from such events costs many times more than adaptation, says the federal government.

Supporters of the preventive approach worry there’s a lack of will and funding to implement the national adaptation strategy. And the longer it takes to both mitigate climate change while protecting Canadians from worsening impacts, the more costly it will become to recover from them, experts say.

The national adaptation strategy, released in June, outlines and puts timelines on Ottawa’s goals to reduce wildfires, extreme heat, flooding, and a host of other impacts linked to global heating.

“We rolled up our sleeves, engaged very directly in the drafting of the strategy, and we’re quite pleased with the result,” said Craig Stewart, vice-president for climate change and federal issues with the Insurance Bureau of Canada.

“For the first time, Canada has not only a national adaptation strategy, but one that sets near-term targets for action,” he said.

But Stewart said the strategy so far lacks the necessary funding and implementation planning to get Ottawa’s plans off the ground.

“We haven’t seen the leadership we would expect in the last six months to actually translate those targets into action, nor do we see any funding on the horizon.”

The Insurance Bureau of Canada is a member of Climate Proof Canada, a coalition of insurance companies and associations, climate research institutes and non-profits, as well as the Canadian Chamber of Commerce, the Federation of Canadian Municipalities, the Assembly of First Nations, the Canadian Red Cross, and others.

Last month, the coalition met with cabinet ministers and opposition politicians, pressing Ottawa to “provide key funding” to implement the adaptation strategy.

In a June news release, the federal government said it had allocated more than $6.5 billion toward adaptation measures over the last eight years, including $2 billion in commitments to support the strategy’s implementation.

However, Ottawa’s economic statement last month did not mention adaptation and there haven’t been any new, adaptation-specific funding announcements.

“It’s a bit dispiriting to be honest, given the (disasters) that have happened, given the tabling of the strategy and the lack of follow-through,” Stewart said.

Figures from the Insurance Bureau of Canada show the costs of catastrophes in Canada have been markedly rising, from an average of $440 million each year between 1983 and 2000 to $2.3 billion annually between 2011 and 2020.

The federal government has said the average annual cost of disaster-related losses is projected to reach $15.4 billion by 2030. That forecast “can be reduced by ambitious adaptation action,” Ottawa said in its June statement.

By 2025, climate impacts are expected to slow Canada’s economic growth by $25 billion annually, it said, citing research by the Canadian Climate Institute.

Neal Willcott is the co-author of a 2022 report for the Institute for Sustainable Finance at Queen’s University in Kingston, Ont., examining the physical costs of climate change, including infrastructure and biodiversity, to the year 2100.

The researchers took a widely used model and “repurposed” it for Canada in order to make projections about climate damages and GDP over time, he explained.

The modelling found Canada’s total losses ranged from $2.773 trillion with 2 C of global heating to almost double that amount under a 5 C scenario.

Comparing those losses to the costs associated with mitigating climate change, the report says the model found spending to cut greenhouse gas emissions “more than pays for itself” in terms of avoiding physical damages alone — even without accounting for the potential benefits of transitioning to a low-carbon economy.

The last federal budget allocated close to $32 million “as a first step” toward setting up the program, and Stewart said insurers have offered to help by providing product distribution and claims administration services on a not-for-profit basis.

“But the window of action is now, because it has to appear in Budget 2024 if the program is to be operationalized before the next federal election,” he said.