Justin Leroux, Julien Picault and Valérie Patreau: We must start budgeting for the harm caused by climate disasters

A trailer parked at a campground in Savona in the B.C. Interior is seen as the Elephant Hill wildfire burns in the distance near Clinton, illuminating smoke in the sky during the early morning hours of July 30, 2017. DARRYL DYCK / CANADIAN PRESS Files

OPINION: Climate harm is already happening, and it is a Canada-wide issue.

How many times during the electoral campaign did we hear “we must address climate change for our children”? Well, the data for Canada is crystal clear. It is not just for our children, it is for ourselves.

Over 195 major disasters were recorded in Canada between 2008 and 2018, according to the 2019 federal budget. In 2016, a report from the Office of the Auditor General of Canada mentioned that “over the past six fiscal years, the federal government spent more on recovering from large-scale natural disasters than in the previous 39 fiscal years combined.” The frequency, severity, and costs of climate disasters are increasing fast from coast-to-coast-to-coast. Such disasters, which include flooding, hurricanes, wildfires, and winter storms, occur in every province.


Finding solutions to mitigate climate change is essential, but it is not enough. The new reality commands us to consider financial relief and recovery efforts. Canadians are already suffering from the growing negative consequences of climate change. But, are the impacted communities being properly supported?

Unfortunately, Canada is not well prepared to handle the harm of climate change. We cannot say that nothing is in place. A cost-sharing formula, the “Disaster Financial Assistance Arrangements”, determines how provincial and federal governments split the bill in the event of important natural disasters. This takes care of the “who pays what.” However, there is practically no plan for how governments actually pay the bill.

In federal and provincial budgets, very little, if anything, is budgeted to handle the harm of climate disasters. So, where is the money coming from? A rather opaque use of public deficits and contingency funds. This will soon no longer be possible.

When climate disasters were occasional, such a strategy was not a serious issue. Governments had enough time to recover financially between events. Nowadays, with increased severity and frequency of climate disasters, governments will not have the same financial flexibility. There will not be enough time between events to settle the debt. Budgeting for climate harm becomes essential.

For now, our governments do not prepare for climate harm. The ugly truth about public governance is that what is not in the budget does not exist for a government. Not only would budgeting for climate harm force governments to acknowledge and be transparent about climate harm, but it would also be a chance for Canadians to foresee the severity of what is to come.

The moral of the story is simple: More climate disasters is the “new normal,” so governments must budget for them. It makes climate change a reality for provincial and federal governments, and not just for the Canadians who already suffer the harm. If climate change matters, budget for it.

Julien Picault is a senior instructor of economics at the University of B.C., Okanagan Campus; Justin Leroux is an economics professor at HEC Montréal; Valérie Patreau is a research assistant at HEC Montréal.

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