Report warns of financial fallout from climate change in Canada

In the aftermath of Hurricanes Fiona and Ian battering the East Coast and leaving a path of destruction, we’re getting a better idea of the consequences of climate change in today’s world.

A new report from the Canadian Climate Institute finds damages are already adding up quickly from floods, fires, heat, and hurricanes and it finds by 2025 climate change will slow the country’s economy by $25 billion a year.

The Canadian economy is not the only thing being affected. It also finds individual households are feeling the pinch.

“We find that costs escalate dramatically over the course of the remainder of the century. We also find that costs are already showing up now. Climate change is not some distant threat that’s only going to hurt people’s grandchildren, it’s already hurting the wallets of Canadians,” Sarah Miller, research associate with the institute, explained.

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The report shows that low-income households will face the brunt of economic losses.

“We find that it’s household affordability that is hit the hardest. That’s from a combination of factors. We see shrinking incomes over time as climate damage affect the economy as a whole. We also see increasing cost of living, so there’s increased direct damages to people’s homes and businesses. We also see the price of everyday goods go up and supply chain disruptions take hold,” something that’s happening right now, Miller said.

She adds in a bid to cover the costs of changing climate, Miller says it’s very likely governments will raise taxes. “It’s really a whole mix of things coming together to really hurt household affordability.”

The report finds most regions of the countries are hit pretty hard by our changing weather patterns.

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“Some regions are particularly hit hard. We find that Alberta is hit hard by extreme weather events and that the north of Canada is hit particularly hard, but this is really something that affects all regions of the country. B.C. doesn’t face quite the same acute impacts from extreme weather, as Alberta does in our modelling, but it’s definitely up there and is significantly affected by climate change.”

For proof of that, you just have to look back to 2021 when B.C., specifically the South Coast, was trapped in a deadly heat dome that claimed the lives of more than 600 people. Record-setting floods that destroyed crops, damaged homes and wiped out hundreds of thousands of livestock in the Fraser Valley, and scorching wildfires that depleted parts of the Interior.

The number crunching of climate change is possible, but Miller says there are costs that are being overlooked.

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“There’s obviously a whole host of costs that are harder to quantify — mental health impacts from people dealing with severe damage and destruction, loss of their homes and businesses. It’s difficult to put into monetary terms but it’s obviously extremely significant,” Miller said.

Despite all this, there is some hope for the future.

“The costs are substantial but the future we’re talking about is not inevitable. We also find global greenhouse gas emissions reductions as well as proactive adaption here in Canada can substantially reduce costs. We found… moving from a high to low emissions scenario, as well as proactive adaption measures to protect people and infrastructure, can reduce costs by 75 per cent. Our analysis shows… for every $1 spent on adaptation measures today, $13-$15 will be returned in years ahead in direct and indirect benefits.”

Miller feels that a reduction in costs will come with help and support from varying levels of government.

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