Today, the federal government released its budget. Following its release, Liam McGuinty, Vice President, Federal Affairs, Insurance Bureau of Canada (IBC), issued the following statement:
“With today’s Budget, the federal government has signalled its intent to consult with Canada’s property and casualty (P&C) insurance industry on ways to ensure the stability of Canada’s financial sector and broader economy in an extreme earthquake event. This is a welcome development for the P&C insurance industry, the broader financial services sector, and Canadians.
For years, IBC has been calling for the federal government to help protect Canadians from the economic fallout in the event of a major earthquake. Canada is the only G7 country with a significant earthquake risk that lacks a formal government-backed financial backstop for earthquake insurance. Without a federal backstop, a major quake could trigger widespread financial instability.
Modeling shows that a major earthquake off the coast of BC would have staggering impacts on Canada: nearly $100 billion in total economic losses. In Quebec, a smaller earthquake could produce losses in the tens of billions of dollars. In either scenario, the economic and social repercussions would extend across the country, posing a foundational threat to Canada’s economy.
IBC is eager to partner with the government to quickly find a solution that will protect Canadians in the aftermath of a catastrophic earthquake and address the risks associated with a seismic event to the Canadian economy.”
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