The federal government's decision to expand its Earthquake Early Warning system to Quebec and eastern Ontario is being welcomed by Canada's property and casualty (P&C) insurers, who said the move strengthens public safety but also highlights the urgent need for broader financial protections against major seismic events.
Liam McGuinty (pictured), vice-president of federal affairs at the Insurance Bureau of Canada (IBC), said the expanded system will provide a crucial alert to people in regions where a significant earthquake could have serious impacts.
Canada experiences thousands of earthquakes each year, and while most are small, certain areas, especially the St. Lawrence and Ottawa valleys, face the risk of damaging, high-magnitude events.
Insurers see the early warning system as a meaningful step, but they add that preparedness must go beyond real-time alerts.
"Canada is the only G7 country with a significant earthquake risk that lacks a formal government-backed financial safety net for earthquake insurance," McGuinty siad. "Without it, a major earthquake could trigger widespread financial instability, impacting consumers, businesses and even Canada's economic resilience."
Earthquake insurance coverage in Canada operates unevenly, depending on region and insurer. In high-risk areas such as British Columbia, most insurers offer earthquake endorsements, but uptake varies due to high deductibles and affordability challenges.
In central Canada, where major earthquakes are less frequent but still plausible, many homeowners remain uninsured for seismic damage because standard home insurance policies do not include earthquake coverage. This gap creates significant financial exposure for households and raises the question of how losses would be handled after a catastrophic event.
Insurers warn that without a national backstop, similar to programs operating in the US and Japan, the sector may not be able to absorb the magnitude of losses tied to a major earthquake. A government-supported framework could help maintain market stability, ensure claims can be paid, and support long-term recovery.
McGuinty noted that the IBC welcomes the federal government’s recent commitment to consult with the P&C industry on ways to strengthen financial sector resilience in an extreme earthquake scenario.
“IBC is eager to partner with the government to quickly find a solution that will protect Canadians and the broader economy in the aftermath of a catastrophic earthquake and address the risks associated with a seismic event to the Canadian economy," he said.
The expansion of the early warning system marks progress on the public safety side of earthquake preparedness. Insurers now hope it will serve as momentum for a coordinated national approach that addresses the financial risks as well — before the country faces a major seismic shock.
