- Canada 2026
- Chapter 1
Canada’s risk is coupled, not cumulative
Part I describes systems and their couplings. It assesses no authority and ranks no province or territory.
Contents
- ·Edition home
- ·Executive summary
- 1Canada’s risk is coupled, not cumulative
- 2Key findings
- 3Systems and sectors at baseline
- 4Risks and capability
- 5Western heat, drought and fire year
- 6Lenses and readings
- 7The 2027 agenda
- 8Systems in depth
- AMethodology
- BData appendix
- CReferences and record
- ·Complete edition, for print
1.1The questions this part answers
Key questions
- Where is Canada’s risk concentrated, and in which systems?
- Which couplings carry shocks from one system to the next?
- Which capabilities hold under compound stress, and which are only documented?
- What must the 2027 programme measure first?
In this part
- Narrative
- Headline finding
- Lead figure
- Twelve-domain reading
- Sector screens
- Dependency matrix
- Risk objects
- Capability ladder
- Scenario
- Three lenses
- Portfolio
1.2The argument
Canada’s exposure is usually described one hazard at a time: a wildfire season, a flood, a heat wave, a drought. This baseline reads the record the other way round. The events that set the loss record in 2024, the Calgary hailstorm, the floods left by the remnants of Hurricane Debby in Quebec, the Jasper wildfire and the flash floods in the Greater Toronto Area, struck different systems in the same summer, and drew on the same insurers, emergency services and public budgets429.
Insured catastrophe losses reached C$9.1 billion in 2024, then fell to C$2.4 billion in 2025. The lower total hides a busier year: seventeen catastrophes were declared, tying the second-highest count on record, and 2025 ranked first for fire catastrophes2. Frequency, more than any single severe event, now drives the record. Over the past decade insured severe-weather losses totalled C$37 billion, against C$14 billion in the decade before4.
The losses are unevenly carried. Over forty-three years insurance has covered about 54% of societal catastrophe losses; the remainder falls on households, businesses and governments, and the long-run loss trend is rising by about 9% a year after inflation3. For flood, the federal task force on flood insurance found that the households most at risk were often the least able to find affordable cover22.
Beneath the losses sits a forcing layer that moves faster than the global average. Canada warmed by about 1.7 °C between 1948 and 2016, roughly twice the global rate, and the North by more5. The 2021 heat dome killed 619 people in British Columbia, the deadliest weather event in the country’s history6. The 2023 fire season burned more than 15 million hectares and emptied almost all of Yellowknife10.
These hazards do not stay in their sector. About 60% of Canada’s electricity is hydro, so a dry year is an energy event9. The 2021 drought and heat cut Prairie canola output by about a third and wheat by more20. Smoke turns a fire season into a public-health season in cities far from the flames18, and the corridors that carry grain, potash and energy to market cross terrain that burns and floods23.
This edition therefore treats risk as a property of the couplings between systems rather than a list of hazards. The dependency matrix, the risk objects, the capability ladder and the compound scenario that follow all ask the same two questions: where does a shock travel next, and who holds the capability to stop it?
Oil and gas and transport together account for more than half of national emissions (52%). Electricity, already largely non-emitting, is the smallest of the named sectors; buildings, heavy industry and waste make up most of the remainder1.
| Item | Bar, scaled to the largest value | Value |
|---|---|---|
| Oil and gas | 208 | |
| Transport | 151 | |
| Agriculture | 70 | |
| Electricity | 50 | |
| All other sectors | 206 |
Source: as cited in the note to this figure. Year 2024.
Figure ID FIG-COUNTRY-CAN-2026-BASELINE-01-003
1.3Twenty couplings between five systems
The Canada matrix types the twenty couplings between the five core systems. Strengths are Nexus estimates from the cited evidence and analogue events; they set the starting graph that the Q1 2027 Foundry cut will test.
Each line is one coupling from one system to another, drawn by the strength the edition assigns. Strengths are Nexus estimates from the cited evidence and analogue events.
- Strong
- Moderate
- Weak
Source: this edition’s coupling matrix (Table 1.1); status Estimated.
| From, to | WAT | ENE | FOO | HLT | BIO |
|---|---|---|---|---|---|
| WAT Water | · | STRONG hydro supply | STRONG irrigation · rain-fed yield | MODERATE drinking water | STRONGflows · wetlands |
| ENE Energy | MODERATEpumping · treatment | · | STRONG fuel · fertiliser · cold chain | STRONG facility power · cooling | MODERATE reservoirs · land use |
| FOO Food | MODERATEwithdrawals · nutrients | WEAK biofuel feedstock | · | STRONG nutrition · food safety | STRONG land conversion |
| HLT Health | WEAK workforce | WEAK workforce | MODERATElabour · disease | · | WEAK residues |
| BIO Biodiversity | STRONGregulation · filtration | MODERATE fire on lines · biomass | STRONGpollination · soils | MODERATEzoonoses · smoke | · |
| Strength: strong, moderate or weak; a Nexus estimate (status Estimated) from cited evidence and analogue events. The scale is defined in Annex A. | |||||
Transmission paths
- 01
WAT → ENE → HLT
A dry year cuts hydro; heat raises peak demand; care settings need power and cooling.
Inferred 2021 heat dome
- 02
CLI → BIO → HLT
A fire season sends smoke over distant cities for weeks.
Reported 2023 fire season
- 03
WAT → FOO → TRD
Drought cuts yields and export volumes.
Reported 2021 Prairie drought
- 04
CLI → INF → FOO
Flood or fire cuts rail links to ports.
Inferred 2021 BC floods
- 05
ENE → FOO
Fuel and fertiliser costs pass into food prices.
Inferred 2022 price shock
1.4Reinforcing loops
A shock entering either system of a loop can return amplified through the other.
| Loop | First direction | Second direction |
|---|---|---|
| WAT and BIO | Water to biodiversity: flows · wetlands | Biodiversity to water: regulation · filtration |
| FOO and BIO | Food to biodiversity: land conversion | Biodiversity to food: pollination · soils |
| A causal-loop reading of the matrix (Sterman, Business Dynamics, 2000): structural, from estimated strengths, not a measured feedback. | ||
Notes
Numbers are the edition’s reference numbers, so a note reads the same in every chapter. The full list, with every source and its licence, is in Annex C. Annex C, references.
- 4Insurance Bureau of Canada (ed.), “Severe weather-related insured losses in Canada exceed $2.4 billion in 2025.” IBC, Toronto, January 2026.back
- 29Insurance Bureau of Canada (ed.), “Insured losses from Calgary hailstorm reach $3.25 billion.” IBC, Toronto, February 2025.back
- 2CatIQ (ed.), Canadian insured losses from catastrophic events: 2025 annual summary. Catastrophe Indices and Quantification Inc., Toronto, January 2026.back
- 3Institute for Catastrophe Loss Reduction (ed.), Societal losses from catastrophic events in Canada: 2025 estimates. ICLR, Toronto, 2026.back
- 22Public Safety Canada (ed.), Adapting to Rising Flood Risk: An Analysis of Insurance Solutions for Canada. Report of the Task Force on Flood Insurance and Relocation. Ottawa, 2022.back
- 5E. Bush and D. S. Lemmen (eds.), Canada’s Changing Climate Report. Government of Canada, Ottawa, 2019.back
- 6BC Coroners Service (ed.), Extreme Heat and Human Mortality: A Review of Heat-Related Deaths in B.C. in Summer 2021. Government of British Columbia, Victoria, 2022.back
- 10Natural Resources Canada (ed.), Canada’s record-breaking 2023 wildfire season. Canadian Forest Service, Ottawa, 2024.back
- 9Natural Resources Canada (ed.), Energy Fact Book 2024–2025. NRCan, Ottawa, 2024.back
- 20Statistics Canada (ed.), “Production of principal field crops, November 2021.” The Daily, Ottawa, December 2021.back
- 18P. Berry and R. Schnitter (eds.), Health of Canadians in a Changing Climate: Advancing our Knowledge for Action. Government of Canada, Ottawa, 2022.back
- 23Transport Canada (ed.), Action. Collaboration. Transformation. Final report of the National Supply Chain Task Force. Ottawa, 2022.back
- 1Environment and Climate Change Canada (ed.), National Inventory Report 1990–2024: Greenhouse Gas Sources and Sinks in Canada. Canada’s submission to the UNFCCC, 2026 edition. ECCC, Gatineau, April 2026.back
- 38Environment and Climate Change Canada (ed.), Canadian Environmental Sustainability Indicators: Greenhouse gas emissions. ECCC, Gatineau, 2026.back