After years of dismissing warnings from his own climate scientist daughter, a conservative father finally accepted the reality of climate change when one unlikely authority presented irrefutable evidence: the insurance industry. The fact that every major insurance company now employs climate scientists and prices climate risk into their policies signals a profound shift; there would be no financial incentive for them to do so if the threat were not real. If climate change were a hoax, insurers would simply undercut one another, offering cheaper coverage while dismissing long-term risk. Instead, they are doing the exact opposite, quietly rewriting the rules of risk as extreme weather becomes more frequent, more destructive, and far more expensive for everyone. The financial sector’s response serves as a stark acknowledgment that the escalating pattern of floods, wildfires, and storms is not a random anomaly but a predictable consequence of a warming planet.
1. The Soaring Price Tag of a Changing Climate
The year 2025 served as a sobering reminder of the planet’s increasing volatility, marked by 55 separate billion-dollar weather catastrophes that included the most expensive wildfire ever recorded and four catastrophic storms. A new report from Gallagher Re detailed the staggering financial impact, with global direct economic losses from natural catastrophes reaching an estimated USD 296 billion. Of that total, insurers and public entities covered roughly USD 129 billion, underscoring a significant and growing gap between total losses and insured losses. This trend reflects the dual pressures of changing hazard conditions and increased socioeconomic exposure in vulnerable areas. The data confirms that extreme weather events are no longer distant threats but present-day economic realities, forcing a fundamental reassessment of risk and liability on a global scale. As these events become more common, the financial systems designed to absorb their impact are being strained to their limits.
Within Canada, the financial toll of severe weather is hitting closer to home with increasing intensity. According to Catastrophe Indices and Quantification Inc., insured losses from events like ice storms, wildfires, and flooding surpassed $2.4 billion in 2025, making it the tenth costliest year on record. This figure, while substantial, pales in comparison to the historic damages of 2024, which reached a record $9.4 billion—a staggering twelve times the annual average recorded between 2001 and 2010. Specific events, such as the late-March ice storm in Ontario and Quebec, contributed heavily to these losses, accounting for $490 million alone. These escalating costs are not an anomaly but part of a clear upward trend. The financial burden is ultimately transferred to homeowners and businesses through higher premiums, reduced coverage, and, in some cases, the outright refusal to insure properties in high-risk zones, fundamentally altering the economic landscape for countless Canadians.
2. When Coverage Vanishes for Canadian Homeowners
For many Canadian families, the consequences of this new reality are both immediate and devastating. In communities like Mississauga’s Lisgar and Rathwood neighborhoods, where residents say “flooding has become a way of life,” the safety net of insurance is disappearing. Homeowner Karri Siemms, whose home flooded three times, shared that her insurance premiums have doubled to nearly $300 per month. Despite being a loyal customer for 25 years, her claims for two flooding events in 2024 were denied. Now, her family is trapped; other insurance companies refuse to even provide a quote once they see the flood claims and the street’s high-risk designation. This issue extends far beyond individual households, directly impacting property values, jeopardizing financial stability, and threatening the long-term viability of entire neighborhoods. The lack of transparency and recourse leaves homeowners feeling powerless against decisions that carry life-altering financial consequences.
This trend of rising costs and shrinking coverage is projected to worsen dramatically. A report by Investors for Paris Compliance suggests that combined insured and uninsured climate-related damages in Canada could skyrocket to $100 billion per year by 2050. This forecast is based on projections from insurance giant Swiss Re, which anticipates that losses from natural catastrophes will continue to grow by five to seven percent annually. The analysis used a midpoint of six percent to project 25 years of Canadian losses, starting from an average of $5.44 billion in insured losses between 2022 and 2024, with uninsured losses estimated to be about three times higher. This grim outlook places an immense strain on household finances, particularly in provinces like British Columbia and Ontario, where a significant portion of household debt is held by families living in areas vulnerable to natural disasters. The predictable financial risk, as one expert noted, is hiding in plain sight.
3. A Nation Under Threat From Floods and Fires
The undeniable link between climate change and the escalating frequency of severe weather is becoming clearer. Dr. Blair Feltmate, Head of the Intact Centre on Climate Adaptation, likens the situation to a baseball player on steroids who suddenly hits five times as many home runs. “You can’t attribute any single home run to the steroids,” he explained, “but when the numbers jump that dramatically, cause and effect is pretty clear.” The data supports this analogy. From 1983 to 2008, catastrophic insurable losses in Canada averaged between $250 million and $450 million annually. Since 2009, these losses have exceeded $1 billion in 16 of the past 17 years, averaging nearly $3 billion annually and climbing along a steep curve. The conclusion is stark: “Things aren’t just getting worse, they’re getting worse faster,” Feltmate noted, signaling a new and dangerous era of climate-driven risk.
While wildfires have emerged as a defining national challenge—with 2025 being the second-worst year on record for land burned—it is residential basement flooding that represents the single largest climate-related cost facing individual Canadians. Insured losses from basement flooding have roughly tripled over the past decade, creating a crisis from coast to coast. An estimated 1.5 million Canadian homes, or about 10 percent of the housing stock, are now considered no longer eligible for flood insurance. For those who can get coverage, the caps have fallen sharply, leaving homeowners exposed to devastating costs. The expense of repairing a flooded basement can easily range from $43,000 to over $50,000, a financial shock that can render a home uninhabitable within days if insurance is limited or denied. This growing threat adds immense pressure to household budgets, particularly for the nearly 39 percent of Canadian households where high debt levels and vulnerability to natural disasters overlap.
4. Shifting the Blame and Demanding Accountability
As insurance companies adjust to this new climate reality, critics argue that the financial burden is increasingly and unfairly falling on households and taxpayers, rather than on the industries most responsible for driving climate change. “Canadians are getting hit twice,” stated Kiera Taylor, a senior analyst with Investors for Paris Compliance. First, they face the direct costs of rising premiums and shrinking coverage. Then, they pay again as taxpayers through public spending on disaster response, adaptation, and recovery efforts. The current strategy of the insurance industry, Taylor noted, is to continue raising rates while simultaneously asking governments to spend more on resilience, effectively shifting liability onto ordinary citizens. This trajectory is viewed as unjust, particularly as major corporate emitters continue to generate profits while the damages caused by their activities accelerate.
However, a new frontier in climate science may offer a path toward rebalancing this equation. Advances in “attribution science”—research that can quantitatively link emissions from specific companies to measurable climate damages—are creating new legal pathways for cost recovery. A recent study, for instance, found that emissions from any of the 14 largest carbon-producing corporations were sufficient to trigger more than 50 extreme heatwaves between 2000 and 2023. By comparing today’s climate with a pre-industrial baseline, scientists quantified each company’s contribution, showing that fossil fuel production was responsible for a significant portion of the added intensity. Experts believe these findings could become key evidence in legal efforts to hold polluters accountable. This approach mirrors the precedent set in Canada when major tobacco companies were forced to pay $32.5 billion to cover public health costs, suggesting a similar logic could be applied to climate-related damages.
5. A Growing Disconnect Between Policy and Action
Despite the escalating crisis, there is a significant gap between Canada’s climate adaptation strategies and their implementation on the ground. “We are policy-rich and operations-poor,” observed Dr. Feltmate, noting that ambitious plans are often developed only to be left sitting on a shelf. In 2023, the federal government launched its National Adaptation Strategy, which focused on key risks like flooding, wildfires, and extreme heat, with multiple targets set to be met by 2040. However, a 2025 audit by Environment Commissioner Jerry DeMarco found the strategy “was not effectively designed” and failed to prioritize the nation’s most pressing climate risks. The report concluded that the strategy lacked clear definitions for expected results, timelines, or accountabilities, and only one of its three core components had been implemented since its launch, despite a commitment of $1.6 billion.
This implementation failure is compounded by a stark funding imbalance. Since 2015, the federal government has invested roughly $160 billion in efforts to cut greenhouse gas emissions. Over the same period, only $6.6 billion was allocated toward adaptation—a 24-to-1 disparity. “For every $1 they put in adaptation, they put $24 in mitigation,” Feltmate stated, calling it a “completely lopsided commitment.” Ironically, it is often municipalities that are moving adaptation forward the fastest, driven by practical necessity rather than high-level policy. The City of Mississauga, for example, has invested hundreds of millions in stormwater infrastructure to combat its severe flooding problems. Yet local leaders like Mayor Carolyn Parrish have frequently criticized the lack of support from Ottawa and the provincial government, highlighting a disconnect that leaves communities to fend for themselves against rising climate threats.
6. Practical Measures in the Face of Uncertainty
While governments debated and strategies stalled, experts stressed that homeowners were not entirely powerless. Simple, proactive steps could dramatically reduce a home’s vulnerability to flooding, sometimes transforming its risk profile from high to moderate over a single weekend. Practical actions included checking that sump pumps were fully operational, installing plastic covers over basement window wells, and redirecting downspouts to channel water away from the foundation. Ensuring the ground around the house was properly graded to slope away from the structure also proved to be a critical and effective measure. These low-cost actions, when properly executed, offered a first line of defense against water intrusion.
For those seeking a higher level of protection, further investments could provide even greater security. Experts recommended adding battery backups for sump pumps to ensure they continued to function during the power outages that often accompany severe storms. According to Dr. Feltmate, the primary barrier was not a lack of willingness but a lack of clear guidance. He observed that when homeowners were provided with simple, visual instructions—such as one-page infographics distributed by insurers or municipalities—an overwhelming majority acted on the recommendations. This suggested that mobilizing people at scale was achievable if they were equipped with knowledge. It became evident that for millions of Canadians watching their premiums rise and coverage shrink, the financial reality of climate change was a powerful motivator for action. The pivotal question that remained was whether governments would act with the same urgency to not only adapt but also confront who ultimately paid for the damage when they failed to do so.
