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Understanding Hazards
Canada is exposed to a number of climatic hazards, including windstorms, tornadoes, floods, hailstorms, and icestorms, as well as the geological hazards of earthquakes and related fires.

While there are significant climatic and geological hazards in northern areas, they cause relatively little financial loss in comparison to the highly concentrated populations of the major Canadian cities of Toronto, Montreal, Vancouver, Ottawa-Gatineau, Edmonton, Calgary, Winnipeg and Quebec City.

Damaging coastal winds, inland windstorms and tornadoes do occur in Canada. Historically, damage from hurricanes has been rare. In 1954, however, Hurricane Hazel caused severe damage in southern Ontario, primarily as a result of flooding. If Hurricane Hazel occurred today, the potential damage could exceed anything ever experienced in Canada. In September 2003, Hurricane Juan, aided by rare conditions, reached the Canadian Maritime Provinces as a Category 2 storm, causing insured losses estimated at over CAD 100 million.

Hail damage occurs regularly, particularly in the Prairie Provinces of Alberta, Manitoba and Saskatchewan. Flood and sewer backup damage can also occur, especially in spring, due to melting winter snow and Canada's abundance of lakes and rivers. In the past, flooding has caused the greatest aggregate amount of property damage in Canada.

Earthquake damage in Canada has been minor in modern times. However, seismologists at the Geological Survey of Canada have found evidence of seismic activity in the past on a scale, if not a frequency, comparable to other earthquake-prone areas of the world. Southwestern British Columbia on the west coast and the St. Lawrence and Ottawa River valley areas in the eastern provinces of Quebec and Ontario are believed to be especially vulnerable.

The ice storm of 1998, which affected both Canada and the northeastern United States, was, at the time, one of the 30 largest worldwide losses ever recorded by the insurance industry. Still the largest Canadian loss on record, the storm left millions of people without power in the middle of winter and caused extensive property damage.

And yet, claims from these three events pale in comparison to the claims and losses that could arise from a major earthquake and related fires in British Columbia, Quebec or eastern Ontario. The potential economic damage from a major seismic event. British Columbia is estimated at CAD 30 billion, and insured losses could reach as high as CAD 15 billion, not all of which would be reinsured. The insurance loss estimate for a major earthquake in Quebec and eastern Ontario is CAD 5 billion.

(Source: The World Catastrophe Reinsurance Market: 2005, Guy Carpenter, September 2006)
 
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The Institute for Catastrophic Loss Reduction

Toronto Office
20 Richmond Street East, Suite 210, Toronto, Ontario M5C 2R9
Tel: (416) 364-8677
Fax: (416) 364-5889

London Office
Boundary Layer Wind Tunnel Laboratory
Western University
1151 Richmond Street, London, Canada N6A 5B9
Tel: (519) 661-3234
Fax: (519) 661-4273