Climate change costs taking increasing chunk off Canada's GDP growth: study

·3 min read

Climate change costs are already taking an increasing bite out of Canada's economic growth and the country is falling behind other nations when it comes to planning for them, says federally funded research.

"Some of these impacts we've already seen are going to continue into the future and grow," said Ryan Ness of the Canadian Institute for Climate Choices. "But there's going to be other kinds of impacts that we haven't even seen before."

The institute was formed and is funded by Environment Canada as a source of independent advice and analysis on climate change threats and possible ways to minimize them. This is its first report.

Using data from government sources as well as groups including the Insurance Bureau of Canada, it concludes weather-related disaster costs are increasing dramatically. It says the number of such disasters had risen to 27 a year in 2016 from an average of eight annually in the early 1970s.

There were $14.5 billion in total costs from 2010 to 2019, dwarfing the total of $21 billion for the four previous decades.

Those figures are adjusted for population growth and increasing land values, said institute economist Dave Sawyer.

"Sure, we've got more stuff, but we're also being kicked harder," Sawyer said.

That drain is starting to dent the economy. The report says disaster costs used to equal about one per cent of GDP growth. Over the last decade, that has climbed to between five and six per cent.

The biggest threats are still down the road, the report predicts.

Health costs can be expected to increase due to heat waves and increases in insect-borne illnesses such as Lyme disease. Wildfire smoke worsens lung problems and weather-related disasters of all kinds have mental-health impacts.

The report says business costs will emerge, too.

People don't work during disasters. During the 2016 Fort McMurray fire, 40 per cent of Canada's oil production was off-line for weeks. Economists have found that labour productivity drops during times of extreme heat or cold by about 2.7 per cent.

Property vulnerable to disasters such as floods, fires or permafrost thaw will lose value, the report suggests, at a cumulative loss estimated by some of up to nearly one per cent of GDP by 2050.

It also says agriculture will be disrupted. Precipitation patterns and timing will change. Freak events will damage harvests, such as the 2012 Ontario March heat wave that made apple trees vulnerable to a later frost and cost orchardists about $100 million.

Insects will ruin valuable timber. Services that nature once provided free -- like dependable, easy-to-treat water -- will become expensive.

Canada just isn't toting up the costs, said Ness.

"The gold standards are the (European Union) and the U.S., where they've had programs for years that research climate impacts and evaluate their costs. We don't have the scale of funding or the sophistication of the programs that those two jurisdictions do."

More importantly, said Sawyer, governments need to start talking to each other and work together.

"Our governance arrangements need to be better to co-ordinate the feds, the provinces and the municipalities," he said. "(We need to be) sitting down together and figuring out how we can better manage and prepare for this changing climate."

This report by The Canadian Press was first published Dec. 3, 2020.

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Bob Weber, The Canadian Press