The Insurance Bureau of Canada is calling for stronger earthquake resilience measures, arguing that a major seismic event could produce losses on a scale that would reverberate across the national economy.
IBC president and CEO Celyeste Power (pictured right) said a major earthquake in British Columbia or Montreal would have severe and far-reaching economic consequences.
“The financial fallout from a catastrophic earthquake in BC or Montreal could be as much as $180 billion between insured and economic losses,” Power said at an IBC conference.
Power said there are signs the issue is gaining traction with government. She pointed out that earthquake resilience appeared in the 2025 federal budget, which she said suggested the industry’s message is beginning to be heard. She said that creates an opening to push for measures that would better protect households, businesses and the economy from a major seismic event.
She said the insurance industry has an important role to play in shaping Canada’s preparedness, while acknowledging that more work is needed to turn that role into practical action.
That case was reinforced by keynote speaker Lucy Jones (pictured left), the American seismologist, who argued that earthquake resilience should be understood not only in terms of physical damage or loss of life, but as the ability of a society to continue functioning after a disaster.
“We all agree on resilience. We sometimes argue about what resilience means.”
Jones said earthquake risk is driven by hazard, exposure and fragility, while response capacity and the pace of recovery can reduce some of the ultimate damage. Hazard itself cannot be controlled, she said, and exposure is largely fixed because cities and infrastructure are already built where they are. In her view, that leaves fragility – especially the resilience of buildings and infrastructure – as one of the clearest areas for policy intervention.
A central point in her remarks was that building codes are often misunderstood. Jones said modern codes are designed primarily to protect life safety, not to ensure that buildings remain usable after a major earthquake. That distinction, she said, has major implications for business disruption, reconstruction costs and long-term economic recovery.
She said jurisdictions such as Japan and Chile have gone further in strengthening resilience and that many earthquake-related losses are preventable rather than inevitable. In her view, stronger standards and more robust retrofit requirements can materially reduce the scale of future damage, even if they involve higher upfront costs.
Jones also said one of the biggest barriers to action is not scientific uncertainty but human behaviour. She said data and technical analysis are necessary, but rarely sufficient on their own to drive policy change. People often respond to risk emotionally, she said, and fear can just as easily lead to avoidance as to action when threats feel too large, too uncertain or too remote.
That theme continued in a fireside chat with Power, which focused on how scientific evidence is translated into policy and what role governments, regulators and insurers should play in the process.
Jones said progress in Los Angeles came only after sustained engagement between scientists, policymakers and local institutions. She said that work required repeated conversations and practical negotiation, not simply the publication of research. Scientific evidence was essential, she said, but it had to be paired with what she described as “science activation” – the process of connecting technical findings with political, economic and regulatory realities.
The discussion also turned to the wider economic consequences of major earthquakes. Power said there is still a tendency to view such events as geographically limited, affecting only the directly hit province or region. She said that view understates the broader economic impact.
Jones made a similar point, arguing that the consequences of a major earthquake would not stop at provincial or municipal borders. She said the effects would extend through insurance markets, banking systems and the wider economy. She pointed to past catastrophes as evidence that major insured losses can trigger broader financial strain if recovery is delayed or underfunded.
That broader framing appeared to align with IBC’s central argument: earthquake preparedness should be treated not as a narrow regional issue but as a national resilience issue with implications for lenders, insurers, businesses, governments and households.
The conversation repeatedly returned to regulation. Jones said market incentives alone are often too weak to overcome short-term cost pressures, especially when builders, property owners and lenders do not fully absorb the long-term consequences of future losses. She said stronger building codes and regulatory intervention are likely to be necessary if governments want to reduce systemic economic risk.
In one of the clearest lines of the session, Jones said: “We can prevent the losses. We just have to choose to do it.”
She also said resilience depends on more than engineering. Social capital, public trust, infrastructure strength and the speed of recovery all shape how communities perform after disaster. In her view, recovery capacity is often underestimated in resilience planning, even though prolonged disruption can deepen losses and weaken the long-term viability of affected regions.
Power returned to that point in the discussion, saying economic losses do not remain local after a major disaster. She suggested that a large event on the West Coast or in Quebec would affect Canadians across the country, regardless of where companies are incorporated or where direct physical damage occurs.
Jones said that dynamic makes early funding and rapid recovery particularly important. She said insurance plays a critical role because it can move money into damaged communities more quickly than most other institutions, helping stabilize rebuilding efforts and reduce longer-term economic scarring.
The discussion also highlighted how limited the policy window can be after major catastrophes. Jones said public attention fades quickly, often within months, reducing the chance of meaningful reform unless governments act while the issue remains immediate. In her view, waiting for the next disaster is a poor substitute for deliberate preparedness, even if recent events can temporarily sharpen public focus.
