Canada's most expensive natural disaster is accelerating and mortgage brokers are increasingly caught in the crossfire
Canada is facing a deepening flood crisis that threatens to reshape housing affordability, strain the mortgage market, and force a long-overdue reckoning over where and how the country builds.
The Insurance Bureau of Canada (IBC) is calling on all levels of government to act with urgency as flood season intensifies and financial losses continue to mount.
Flood and water-related insured losses have grown by more than 350% over the past two decades compared to the previous 20 years, according to data from Catastrophe Indices and Quantification Inc. (CatIQ).
Nationally, severe weather pushed insured losses to a record $8.5 billion in 2024, followed by a further $2.4 billion in 2025, putting sustained pressure on property premiums and the broader home financing market.
For Canadian mortgage brokers and lending professionals, those figures are not abstract. They represent a structural shift in housing costs that is beginning to show up in qualification conversations, renewal discussions, and affordability calculations from coast to coast.
"From spring thaw to intense rainfall events, flooding is becoming more frequent, more severe and more costly in communities across Canada," said Liam McGuinty, vice-president of Federal Affairs at the IBC.
"We need coordinated action from all orders of government, industry and homeowners to reduce risk, strengthen resilience and protect Canadians from the rising costs of extreme weather."
Premiums rising, buyers still in the dark
At the consumer level, premiums for home and mortgage insurance rose 31% between 2021 and 2025, according to Statistics Canada, compared with 15% for overall inflation.
In provinces with heavy claims, the increases have been steeper still, TD estimates averaged five-year premium rises of 68% in British Columbia and 58% in Alberta.
However, many mortgage professionals say the issue has not yet surfaced in meaningful ways in their client conversations.
Jerry Liu, an Ajax-based broker with 8Twelve Mortgage, told Canadian Mortgage Professional that clients had not been raising the issue despite the increases in their market.
"This really hasn't been much of a topic of conversation between my clients and I," he said.
"With a lot of first-time homebuyers, they aren't really too aware of the increased rate premiums year to year, since this is their first premium."
Sean Stewart, principal broker at Ashburn Mortgages in Ajax, described home insurance as "not a topic at all" in borrower discussions — noting that qualification costs and mortgage mechanics continue to dominate.
"Honestly, home insurance is just sort of an afterthought," he told CMP.
"It's really not even a part of the decision-making process when you're buying a house."
That complacency may not last. Research from Desjardins Insurance, based on a survey of approximately 4,000 Canadians, found that nearly 70% of insured Canadians believe severe weather could damage their home.
However, only about one-third have already taken protective steps, and just 38% say they are likely to do so in the next five years.
A policy gap threatening the housing pipeline
The IBC's intervention comes at a critical moment for Canada's housing construction agenda. Ottawa has proposed building 3.9 million homes, of which approximately 500,000 could be situated in high-risk flood areas and more than 200,000 in high-risk wildfire zones, according to IBC's Liam McGuinty.
Canada still does not have a fully implemented national flood insurance backstop. Ottawa signalled support in recent budgets, but as of 2026 federal officials have yet to commit to a launch timeline.
To bend that curve, the IBC is urging governments to restrict development on high-risk flood plains, update building codes to reflect changing climate conditions, invest in wastewater and stormwater infrastructure, scale up home retrofit programmes, and adopt better flood mapping tools, including opting in to the federal government's recently launched Flood Risk Finder.
"The most effective way to ensure the continued sustainability of the home insurance market is by creating more resilient communities," McGuinty added.
"That means better flood maps, smarter land-use decisions, building codes that account for a changing climate and investments in infrastructure. Investing in resilience now is the smartest, most cost-effective way to protect Canadians and their communities for the long term."
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