Feb. 25, 2025 — HUNDREDS of thousands of new homes are destined to be built in high-hazard flood and wildfire zones across the country unless policy changes are introduced, the Canadian Climate Institute has warned.

“With millions of new homes planned in the coming years, Canada risks compounding an already serious problem by allowing further development in hazardous areas,” the institute said in a report titled Close to Home.

“Once housing is built in high- flood or -wildfire hazard areas, the risk is locked in for decades or centuries as relocating homes and associated infrastructure is both exceedingly costly and politically fraught.”

The institute, an independent research organization that is funded by the federal government and a group of philanthropic supporters, said the financial implications are substantial.

It said its analysis shows that without changes in policy, Canada could build more than 150,000 homes in areas of very high flood hazard and over 220,000 homes in municipalities exposed to high wildfire hazards by 2030.

It said that if action is not taken, in a best-case scenario, annual flood losses could increase by $340m by 2030, with a worst-case scenario of up to $2bn annually.

And wildfire-related damages could add another $1.1bn annually, leading to total combined damages to new housing as high as $3bn per year.

“Building homes in high-hazard areas will not just affect individual homeowners but will also impose broader costs on governments and society through higher insurance premiums and tax-funded disaster recovery efforts,” the institute said.

It said that in most provinces and territories, gaps in land use policies allow housing to be built in high-hazard flood and wildfire zones. And municipalities — which are often under-resourced and under pressure to prioritize immediate housing needs over long-term safety — may approve development in hazardous areas.

The institute said its analysis shows there is a link between the strength of land use policies and the level of risk to current and future housing.

It said provinces with stronger land use policies, such as Ontario and Saskatchewan, have relatively lower risks to their housing stock, providing a model for others to follow.

The analysis shows that a small number of homes concentrated in the highest-risk zones are responsible for the majority of potential future losses.

The institute said redirecting just 3% of the homes targeted for construction by 2030 away from high-flood hazard areas and towards safer ground could reduce Canada’s flood risk to new housing by nearly 80%.

It said that in most communities, targeted policies can effectively reduce risk without limiting housing growth.

But it said current federal and provincial programs that aim to increase housing supply often overlook climate-related hazards, encouraging development in risky areas.

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