Disaster Proofing Canada – Earthquake Resiliency Brief
Fact sheets detailing the economic and human risk of earthquakes in southwestern British Columbia.
Disaster Proofing Canada – Earthquake Resiliency
Canada is not prepared for a major earthquake – despite its high risk
It’s not a question of if but when...
- Southwestern British Columbia is overdue for a large earthquake.
- Such a major disaster would cost lives and destroy communities, infrastructure, and supply lines.
- It would have a huge impact on individual British Columbians and on Canada’s economic performance as a whole.
A major earthquake in southwestern BC could result in over $127.5 billion in losses
Over 3 million British Columbians live in this area
45% of British Columbians have earthquake insurance
30% chance major earthquake will hit BC in next 50 years
IMPACT OF EARTHQUAKES AROUND THE WORLD
New Zealand earthquake
- 185 lives lost
- 7,000 homes destroyed due to unstable land
- NZ$40 billion economic cost equivalent to 20% of GDP
Japan earthquake and tsunami
- 16,000 lives lost
- 130,000 buildings destroyed
- $275 billion economic cost equivalent to 5% of GDP
Canada’s National Disaster Mitigation Strategy acknowledges that preparation is crucial to reducing the financial impact of such major disasters. However:
- Canada is not well prepared from a financial resilience perspective.
- Canadians are increasingly concerned about this issue.
The Canadian insurance industry faces its own risk related to an earthquake.
- A recent Conference Board of Canada report found that, while the insurance industry is well capitalized for a major event, a rare and catastrophic earthquake such as the huge quake and tsunami that hit Japan in 2011, could threaten Canada's insurance industry and entire financial system.
- Financial costs to federal and provincial governments would be significantly higher should insurers fail following a catastrophic earthquake. Such an event is likely to:
- Result in $127.5 billion in economic losses
- Cut Canada's economic growth in half
- Remove 43,700 jobs over 10 years
- Add $122 billion to federal and provincial government debt
Governments and insurers must work together to reduce Canada’s earthquake risk
- The insurance industry needs to promote greater insurance take-up through consumer education and new earthquake insurance products that offer Canadians more choice and flexibility. This market-based approach transfers risk away from governments.
- Governments at all levels must increase their investment in mitigation efforts and public awareness activities.
- A public-private partnership at the federal level is urgently needed to improve financial resiliency in the case of a rare and catastrophic earthquake.
For further information:
Aaron Sutherland Vice-President, Pacific asutherland@ibc.ca | 604-684-3635
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