Climate changes mean Canada to spend more on disasters: insurers

Wed May 18, 2016 1:52pm EDT
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By David Ljunggren

OTTAWA (Reuters) - Canada will have to set aside more money to deal with natural disasters like wildfires, storms and floods as climate change starts to bite, the head of the country's property insurance industry group said on Wednesday.

A wildfire sweeping through the heavily forested oil sands region of Alberta near the town of Fort McMurray could eventually cost C$6 billion ($4.64 billion), according to one industry estimate.

Don Forgeron, chief executive of the Insurance Bureau of Canada, noted there are a range of estimates out there on how much insured damage the wildfire will do, from a low-end of "a couple billion dollars" to a high of C$9 billion.

"It will likely be somewhere in between but we really don't know," said following a speech in Ottawa.

Asked whether the wildfire would lift insurance premiums in Fort McMurray and other areas where the perceived risk is higher, Forgeron said it is "rare that one event will cause that kind of reaction."

A special fund that the Canadian government runs to help provinces recover from disasters covers 90 percent of all eligible costs.

In his speech, Forgeron cited a February report by the parliamentary budget officer which said disasters linked to climate change would cost the government C$900 million a year over the next five years.

This amount is far in excess of what Ottawa has currently set aside to deal with such events, he said.   Continued...

A massive plume of smoke, from a wildfire north of the city, stretches over Fort McMurray, Alberta, Canada Wednesday evening, May 5, 2016.  Courtesy Chris Schwarz/Government of Alberta/Handout via REUTERS