New study estimates future costs of climate change

Study builds case for infrastructure investment

Toronto, ON (Dec. 11, 2015) – Canadian communities need to adapt to avoid the projected increasing costs due to climate change, according to a new study by Insurance Bureau of Canada (IBC). The Study of Economic Impacts of the Weather Effects of Climate Change, released today, estimates some of the future costs to the Halifax, N.S., and Mississauga, Ont., communities from specific severe weather events stemming from climate change. It points to the need to increase infrastructure investments now to reduce costs down the road.

“Halifax, Mississauga and other Canadian municipalities are working hard to adapt to changes in our climate. But they can’t do it alone,” said Amanda Dean, Vice-President, Atlantic, IBC. “Municipalities tell us they need cooperation and funding from provincial and federal governments to prepare. This study provides a partial analysis of the significant costs of severe weather events in our future.”

Researchers looked at two severe weather events per city. For Halifax, they studied extreme winds and storm surge flooding. For Mississauga, they considered ice storms and stormwater flooding.

For each weather event, the researchers calculated what the economic costs to the city could be as a result of these weather events five years out (in 2020) and 25 years out (in 2040). They also considered the effect of worsening climate change, and ran the numbers for 2020 and 2040 three times � first using the cities’ current climate conditions, and then assuming moderate and high acceleration in the rate of climate change. Here are some of the results:

For Halifax by 2040:

  • The annualized loss expectancy from extreme wind events could be about $18 million. A moderate increase in the rate of climate change could increase this figure to $20 million.
  • One extreme wind event (calculated as a 1-in-25-year event) could cost an estimated $123 million to $126 million.

For Mississauga by 2040:

  • The annualized loss expectancy from ice storms could be about $9 million. A moderate increase in the rate of climate change could increase this figure to about $12 million per year.
  • One severe ice storm (calculated as a 1-in-25-year event) could cost an estimated $23 million to $38 million.

“As a port city, Halifax is acutely aware of the sea level rise occurring in its harbour, and the need to prepare for more extreme weather conditions,” said Shannon Miedema, Acting Manager of Energy & Environment for the Halifax Regional Municipality. “Halifax was an early adopter of greenhouse gas emissions tracking and reduction targets, and our Mayor recently signed on to the Compact of Mayors to show commitment and support in the lead up to the 2015 Paris Climate Conference (COP21). Halifax is also active in climate adaptation and resilience building efforts, incorporating these considerations into our policies, plans and projects. This study helps us make a business case to take action in the short term, alongside our efforts to take a precautionary approach to decision-making.”

“In Mississauga, we’re working with other levels of government to study the impacts of climate change so that we can prepare ourselves to prevent future impacts,” said Brenda Osborne, Director of Environment for the City of Mississauga. “Currently we’re working with the Peel Climate Change Strategy Partnership to examine risks and impacts to the community from climate change as well as implementing a stormwater charge to better maintain and expand our stormwater infrastructure.”

Across Canada, insured damages from extreme weather events have cost almost $8 billion since 2010, which is only a portion of the total economic costs to the country. Research, including the IBC study released today, is key to assisting governments, companies and Canadians to prepare for the future effects of climate change. The Canadian home, auto and business insurance industry is advocating for adaptation to climate change to help individuals and communities reduce their risk.

IBC conducted the Study of the Economic Impact of the Weather Effects of Climate Change with support from Natural Resources Canada through Canada’s Adaptation Platform. The study was conducted with the support of Team Green Analytics (Green Analytics Corp. & Ontario Centre for Climate Impacts and Adaptation Resources). The full study, which includes an executive summary, and a backgrounder are available at

About Insurance Bureau of Canada

IBC is the national industry association representing Canada’s private home, auto and business insurers. Its member companies make up 90% of the property and casualty (P&C) insurance market in Canada. For more than 50 years, IBC has worked with governments across the country to help make affordable home, auto and business insurance available for all Canadians. IBC supports the vision of consumers and governments trusting, valuing and supporting the private P&C insurance industry. It champions key issues and helps educate consumers on how best to protect their homes, cars, businesses and properties.

P&C insurance touches the lives of nearly every Canadian and plays a critical role in keeping businesses safe and the Canadian economy strong. It employs more than 118,000 Canadians, pays $6.7 billion in taxes and has a total premium base of $48 billion.

For more information, visit

About Natural Resources Canada and Canada’s Adaptation Platform

Natural Resources Canada chairs the Adaptation Platform, which brings together Canada’s expertise, information and financial resources to enable the development and widespread use of adaptation information and tools. The Platform fosters collaboration across Canada’s provincial and territorial governments, federal government departments, industry associations and professional organizations, to collaborate on shared adaptation priorities.

About the Halifax Regional Municipality

The Halifax Regional Municipality is the government for the largest municipality in Atlantic Canada, delivering programs and services to more than 413,700 residents across 200 communities and neighbourhoods. Halifax boasts the friendliness of a small town with the amenities, culture and opportunities of a modern urban centre. As home to some of the brightest minds and best educational institutions in the world, Halifax is forward thinking, resilient and resourceful, with a reputation as an energetic, caring community that embraces creativity and innovation.

About Mississauga

As Canada’s sixth largest city, Mississauga is home to 752,000 residents and more than 54,000 businesses, including more than 60 Fortune 500 companies with Canadian head offices or major divisional head offices.


The Study of Economic Impacts of the Weather Effects of Climate Change estimated a portion of the future costs of climate-related extreme weather hazards. It examined how climate change could affect two Canadian communities � Halifax, N.S., and Mississauga, Ont. � in the coming years. (For the purposes of the study, researchers made the assumption that no new adaptation measures would be implemented by the cities during the timeframe studied; however, both cities are pursuing ambitious climate change adaptation strategies.) The results characterize the types of impacts all communities will need to prepare for as a result of climate change.

Insurance Bureau of Canada conducted the study with support from Natural Resources Canada, the Ontario Centre for Climate Impacts and Adaptation Resources, and Green Analytics.

How is climate change affecting Canadian communities?

In recent decades, Canada’s climate has become warmer. Between 1950 and 2010, the air temperature increased by an average of 1.5�C. This rate of warming is about twice the global average over the same time period.

Observed trends in damaging weather patterns arising from climate change include:

  • Frequent heavy-precipitation events associated with an increased risk of flooding;
  • A higher incidence of freezing rain and ice storms during cold months;
  • Long hot spells and more frequent hot extremes, droughts and wildfires.

These trends will continue and may become more pronounced as the climate continues to change.

Key study findings

Even under current climate conditions, the economic costs of severe weather events will have significant impacts from 2015 to 2040. Also, local economies will be hurt by business interruptions, and community resources will be needed to repair the direct damage to homes and businesses.

In addition, the research shows that the cumulative effect from the impacts of extreme weather events between 2015 and 2040 will rise with any acceleration in the pace of climate change.

Summary of results

The study results reflect the assumption that no new adaptation measures are undertaken, and they represent just a portion of the full economic costs of changing weather patterns caused by climate change. In part, this is because researchers analyzed only two severe weather events per community. As well, some costs could not be captured because of gaps in the available information. Additionally, certain costs � such as the costs of weather events to human health and the costs to restore damaged coastal wetlands � were outside the scope of the study.

In the chart below, selected cost impacts from the study are shown. It is to be noted that “average annual costs” are reported because in any given year the frequency and/or severity of extreme weather events will fluctuate.

Extreme weather hazards studied

Average annual economic costs by 2040 assuming current climate conditions

Economic costs from a major (one-in-25-year) event by 2040 assuming no change from today’s climate


Storm surge flooding:

$5 million per year

Up to $30 million

Extreme wind:

$18 million per year

Up to $123 million


Stormwater flooding:

$32 million per year

Up to $195 million

Freezing rain:

$9 million per year

Up to $23 million

The full study can be downloaded from


  • Damage from a major event: Direct damages to residential, commercial and institutional property, business interruption impacts, and associated rebuilding and repairs attributed to the occurrence of a single major severe weather event
  • Extreme wind: High winds of up to 50 kilometres an hour or greater over large areas
  • Freezing rain: Rain that falls during the autumn and winter months that freezes on impact and builds up on surfaces
  • Storm surge: An abnormal rise in water levels along a coast that is caused largely by high winds, often as a result of a hurricane or severe winter storm
  • Stormwater flooding: A result of heavy precipitation that overwhelms stormwater infrastructure causing flooding in urban areas

Key actions to adapt – Halifax Regional Municipality

  • Implementing its Municipal Climate Change Action Plan
  • Mapping sea level rise and land use vulnerability
  • Updating its Hazard, Risk and Vulnerability Assessment (emergency management guide)
  • Performing flood plain studies and overland flooding/stormwater research, and developing policies
  • Participating in an EU-Canada urban policy exchange focused on climate adaptation/resiliency and low carbon development

Key actions to adapt – City of Mississauga

  • Examining risks to the corporation from climate change
  • Working with Peel Climate Change Strategy Partnership to examine risks and impacts to the community from climate change
  • Implementing a stormwater charge to better maintain and expand stormwater infrastructure

Previous IBC research

This report is the latest in a research series that IBC is conducting to increase community resilience to climate change across the country.

IBC released its Telling the Weather Story study in 2012, which showed the effect of climate change on Canada’s regions. In 2014, IBC successfully completed the pilot of its municipal risk assessment tool (MRAT) in three Canadian cities. MRAT is an innovative web-based statistical tool to help municipalities evaluate the impact of climate change specifically on their sewer and stormwater infrastructure.

Source: Insurance Bureau of Canada