Why Canada is budgeting for extreme earthquake preparedness

Résumé détaillé

Prime Minister Mark Carney's second budget proposal aims to help Canadians prepare for the possibility of a major earthquake.

Prime Minister Mark Carney's second budget aims to help Canadians prepare for the possibility of a major earthquake that experts forecast has a 30 per cent chance of happening over the next 50 years on the Pacific Coast.

When the federal budget was tabled last Thursday, Finance Minister François-Philippe Champagne introduced legislation to establish a "Canadian earthquake insurance facility" that the government hopes will protect Canadians "against catastrophic earthquake risks" by providing the Canadian insurance sector with emergency funding of up to $50 billion.

"We're very encouraged," said Liam McGuinty, the Insurance Bureau of Canada's vice-president of federal affairs. "At some point, a major earthquake in Canada is going to happen. And the greatest risks are in B.C. and then also between Ottawa and Montreal."

McGuinty said that even though Canada's insurance industry is prepared for the "vast majority of earthquake scenarios," there would be significant economic loss "in the event of a really extreme earthquake" in the country.

"That could result in tens or hundreds of billions of dollars in economic losses and it would put extraordinary pressure on the insurance system," McGuinty said. "At that point, it's not an insurance problem anymore. It becomes a financial stability and an economic problem for Canada."

The Insurance Bureau of Canada says that to date, Canada is the only G7 country with significant earthquake exposure without a government-backed mechanism in place to manage the risks associated with major earthquake damage.

"That really is what the government has proposed in the budget," McGuinty said.

Extreme earthquakes aren't a new threat. Edwin Nissen, the Canada Research Chair in Geophysics and an earth and ocean sciences professor at the University of Victoria, says the proposal is removing what has long been a blind spot in public policymaking.

"I think it's right that the government's thinking ahead, planning long term for how to respond to these…

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