Climate adaptation is an urgent need for Canadian cities

Canadian cities should take action now to meet the future challenges of climate change, warns ratings agency Morningstar DBRS in a commentary published Aug. 27.  

Entitled, Floods of Concern: Canadian Cities Face Urgent Need for Climate Adaptation, the commentary highlights findings from Canada's Climate Change Report 2019, including that both past and expected warming in Canada is, on average, double the magnitude of global warming.  

Canada is more affected because warming generally is stronger at high northern latitudes and stronger over land than oceans, explains Morningstar DBRS. “Thus, Canada's large land mass, much of which is located at higher northern latitudes, makes it more prone to a warmer climate.” 

Extreme weather events 

Canadian cities are being hit by more frequent extreme weather events, notes the ratings agency, which underlines the “growing need for investment in climate adaptation.” 

The ratings agency gives some recent examples, including the July 2024 flooding experienced by the city of Toronto that overwhelmed the city's waterways and drainage systems. “This is becoming a recurring event in Toronto, with multiple instances of localized flooding in recent years, which are already influencing capital planning and debt needs,” explains Morningstar DBRS. 

The commentary adds that Toronto’s 10-year capital plan includes investments in climate mitigation and adaptation, “which aims to reduce carbon emissions while also improving the city's resilience to climate change.”  

Avoiding economic disruption 

The ratings agency highlighted information from the Canadian Climate Institute indicating that climate change will cost Canada's economy between $78 billion and $101 billion annually by 2050. However, it also forecast that “every dollar invested in climate adaptation today will return $13 to $15 in future savings, including $5 to $6 in avoided costs of infrastructure repair and a further $6 to $10 in avoided disruption to the economy.” 

Cheryl Saldanha, Assistant Vice President, Global Sovereign Ratings, for Morningstar DBRS, underlines that many large cities have already started to “incorporate climate considerations into their budgets and capital plans." She urges other cities to do the same. "Making this investment now could mitigate economic disruptions and prevent municipalities from drowning in debt in the future." 

Morningstar DBRS points out that both the federal and provincial levels of government have programs in place to help local governments in their climate adaptation initiatives.