Canada: Destructive weather prompting corporate rethink on ignoring costs of climate change

By Pete Evans

Many in Canada's business community are waking up to the realities of climate change because they are bearing the brunt of paying for it — and starting to plan accordingly.

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Economist Craig Alexander with accounting firm and consultancy Deloitte says it can be a mistake to take individual violent weather events such as Hurricane Florence or the recent spate of wildfires in British Columbia and tie them directly to climate change. But on the whole, he says, "we certainly are seeing increased frequency of these events, and they are taking an economic toll."

Alexander says economists, policymakers and companies are already stress testing the impact of disasters we know will come as part of their basic risk-management policies. When he worked at the Royal Bank of Canada, he says, the bank would routinely try to crunch the numbers on what the economic toll would be for things like a major earthquake in British Columbia, or a wildfire in northern Alberta knocking much of Canada's oil output offline.

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According to the most up-to-date government estimates, Canada has more than $140 billion worth of assets such as roads, bridges, sewers and transit projects that were considered to be in either "poor" or "very poor" condition as of 2016.

That's a big liability looming on the horizon, and businesses and governments are getting ready for it. 

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Mitigating the impact of natural disasters is often painted as a cost of doing business. But Atif Kubursi, professor emeritus of economics at McMaster University in Hamilton, says the investment community is slowly starting to find a balance between the cost of action and the opportunity cost of inaction.

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