Canada’s parliamentary budget officer is warning that federal disaster assistance costs are on track to double within the next decade as the country faces growing damage from wildfires, floods, and severe storms.
In a new report released Thursday, the PBO projects that federal spending through the Disaster Financial Assistance Arrangement — the program that helps provinces and territories recover from major natural disasters — will climb from about $881 million last fiscal year to more than $1.8 billion by 2034.
The report attributes the rising costs to the increasing frequency and intensity of natural disasters driven by climate change. The analysis shows that while the number of floods has remained relatively steady over time, wildfires and severe storms are becoming more common, larger, and more destructive. The average cost per disaster has also grown dramatically compared to 15 years ago, in part because more Canadians are living and building in high-risk areas.
According to the PBO’s projections, flood-related assistance will continue to account for the largest share of federal disaster spending — averaging about $1.2 billion a year — followed by $325 million for wildfires and $258 million for major storms.
The findings underscore the escalating financial burden of extreme weather on public finances, even as Ottawa faces mounting pressure to reduce overall spending. The PBO’s report suggests that unless governments make major investments in climate adaptation and infrastructure resilience, disaster-related costs will continue to climb sharply in the coming years.