Excerpted from an ICLR Research Paper —
By Keith Porter, Jasem Alhumaidi & Daniel Guerrero-Santaren, Institute for Catastrophic Loss Reduction —
The Institute for Catastrophic Loss Reduction (ICLR) provides disaster information to encourage people in Canada to become more resilient. That mission is aided by data on the total costs of natural disasters that occur in Canada. But no entity currently publishes estimates of the total societal cost of Canadian natural disasters.
Some organizations collect and report important pieces of those costs, however. Catastrophe Indices and Quantification Inc. (CatIQ) has estimated insured losses for catastrophes since 2008 and provides its estimates to subscribers. Before 2008, the Insurance Bureau of Canada (IBC) collected and disseminated similar insurance loss information.
Public Safety Canada offers the Canadian Disaster Database, a source for monetary losses, deaths, and injuries for notable disasters since 1900. The meaning of its monetary loss estimates is unclear, however, and may vary from event to event. It may reflect only property loss, or it might sometimes include emergency response and recovery costs.
But nobody collects and reports certain kinds of losses. Nobody polls people for their uninsured losses, either for uninsured property losses or indirect business interruption. We are unaware of anybody estimating the externalized cost of carbon embodied in repairs or debris. And while the federal government reports expenditure on the Disaster Financial Assistance Arrangements (DFAA), it does not seem to report the portion of those expenditures that pay for repairs to utilities and transportation infrastructure.
It would aid ICLR’s mission to compile and disseminate all these categories of loss with a single, consistent, transparent methodology. The sum would represent something approaching total societal loss. One could examine the sum and its components for trends over time or differences between locations or perils. We could then use trends and differences to examine underlying causes, with the ultimate goal of reducing catastrophic losses, ICLR’s eponymous objective.
Objectives and Scope
We set out to estimate the total societal loss in constant dollars for each Canadian catastrophe since 1983. Here, catastrophe means CatIQ’s definition of a catastrophe, currently defined as an event causing at least $30 million in insured loss ($25 million from 2008 through 2021, and no standard threshold before 2008). We further aim to estimate the total societal loss for each catastrophe by summing 10 key loss categories; note that this list excludes potentially large and important sources of loss (access the complete report via the link below for a full list of included and excluded categories and perils).
We note the similarity between the trends observed here and in the United States. There too, catastrophe losses are increasing much faster than population, gross domestic product, and construction investment. Since the two time series share no common geography or data sources, the similarities between them suggest a real underlying physical phenomenon. They seem to share a common problem, perhaps with common solutions.
Summary of Results
In this initial work, we exercise the methodology for losses between 1983 and 2024, inclusively. Total societal losses currently average $9.2 billion per year, in 2025 CAD. For scale, this figure equates with:
- 2.2 times average annual insured loss ($4.2 billion per year in the period 2020 to 2024)
- 3% of annual construction spending (about $270 billion per year; Statistics Canada 2025a), or about 2 weeks of construction spending lost per year.
- 1.3 times the $7 billion 2024 federal budget for childcare (Library of Parliament 2024).
- 20% of GDP growth ($46 billion CAD in 2024; Data Commons 2025)
The majority of the loss (54%) is attributable to the loss of personal property, about half of which is uninsured. Half the rest (23%) is attributable to commercial property, and the balance derives from indirect business interruption (8%), auto losses (7%), utilities and transportation infrastructure repairs (4%), embodied carbon involved in repairs (3%), and the cost of deaths and injuries (1%).
Total societal loss appears to increase by about 9.3% per year in constant dollars. For scale, this
growth rate equates with:
- 9 times population growth (1.1% per year, Statistics Canada 2024a)
- 5 times real gross domestic product growth (2.0% per year, Statistics Canada 2025b, adjusted for inflation using Statistics Canada 2024f)
- 3 times real construction spending growth (3.4% per year, Statistics Canada 2025a)
Let us briefly reflect on the long-term trends. As a fraction of annual construction spending, total societal loss is increasing 5.7% per year. That means that it doubles approximately every 12.7 years and quadruples every 25 years. Thus, at current long-term trend rates, in 2038, natural disasters will erase one month of construction spending per year. In 2050, one generation from now, natural disasters will cost the equivalent of two months of construction spending. And so on. Such losses are unsustainable.
Read the full report:
- Access the complete 38-page PDF with extensive charts and in-depth citations at ICLR’s research paper series.
Executive Summary & Methodology
The Insurance Bureau of Canada and Catastrophe Indices and Quantification Inc. estimate insured catastrophe losses over time by geographic location. Nobody polls people for uninsured losses, so we estimate insurance penetration using insurance policy information and government counts of buildings and vehicles. We use penetration rates to estimate uninsured property loss.
We add private-sector losses for which one cannot buy insurance, public-sector costs to repair utilities and transportation infrastructure, deaths and injuries, and environmental impacts. We use governmentally assigned acceptable costs to protect safety to convert life-safety impacts to money. We use the governmental social cost of carbon to measure environmental impacts.
Losses currently total $9.2 billion (2025 CAD) per year, equal to 3% of construction spending. That is, natural disasters absorb about 2 weeks of construction spending per year. Losses increase approximately 9.4% annually in constant dollars, doubling every 8 years. That growth rate equates with 9 times population growth, 5 times real gross domestic product growth, and 3 times real construction spending growth.
Losses as a fraction of construction spending grow 5.4% per year, doubling every 12.5 years. Disasters cost an unsustainably increasing fraction of wealth: 2 weeks of annual construction now, one month per year in 2038, two months per year in 2050, and so on.
Total societal losses average about 2.2 times insured loss. The majority of the loss (54%) is attributable to the loss of personal property, about half of which is uninsured. Half the rest (23%) is attributable to commercial property, and the balance derives from indirect business interruption (8%), auto losses (7%), utilities and transportation infrastructure repairs (4%), embodied carbon involved in repairs (3%), and the acceptable cost to avoid deaths and injuries (1%).
The reader will find a spreadsheet of estimated annual total losses at www.iclr.org/researchpapers/. The data are made available under the CC BY-SA 4.0 license.
ICLR’s mission
ICLR’s mission is to reduce the loss of life and property caused by severe weather and earthquakes through the identification and support of sustained actions that improve society’s capacity to adapt to, anticipate, mitigate, withstand and recover from natural disasters. ICLR is achieving its mission through the development and implementation of its programs Open for business, to increase the disaster resilience of small businesses, Designed for safer living, to increase the disaster resilience of homes, and RSVP cities, to increase the disaster resilience of communities.
- Browse the ICLR research paper series.
About the Institute for Catastrophic Loss Reduction
Canada’s leading disaster research institute, the Institute for Catastrophic Loss Reduction (ICLR), was established by the insurance industry in 1997 as an independent, not-for-profit research and outreach institute to champion disaster resilience in Canada. ICLR is an international centre of excellence affiliated with Western University, London, Ontario. The Institute develops and champions evidence-based disaster safety solutions that can be implemented by homeowners, businesses and governments to enhance their disaster resilience. For more information, visit www.iclr.org.
Source: Institute for Catastrophic Loss Reduction (ICLR)
