Toronto floods expose Canada’s $2.9B climate risk

Toronto was hit by a torrential downpour last week, leading to flooding across the city, shutting down Union Station and leaving thousands without power. The total damages from the storm could exceed $1B according to the Insurance Bureau of Canada.

At risk: Severe weather is becoming more frequent and costly due to climate change. And we’re not well equipped.

Much of Ontario’s infrastructure is at risk, according to a report commissioned by the Ontario Ministry of the Environment. All infrastructure assets across the province had “Medium” risk profiles or higher and every region in the province is currently facing “High” risks for stormwater management.

2 in 10 homes in Canada are at risk of flooding with a potential price tag of $2.9B per year. Insurance companies are taking notice, no longer offering coverage in high risk zones. 

A costly trend: According to research group RAND, the US used to experience just three billion-dollar weather disasters a year. That’s gone up to 6 in the 2000s, 13 in the 2010s, 20 in the last five years, and just hit 28 in 2023. Meanwhile, 56% of Canadian businesses say they took a hit to profitability from extreme weather events last year, and more than 90% fear they’ll be affected in the year ahead.

The bottom line: The price tag for infrastructure upgrades can be politically unpopular, but they pay off in the long run. In Ontario, a proactive approach to adaptation could save more than $1 billion.

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