Major quake could push Canada into a recession
Published: January 31, 2020
Updated: January 30, 2020
Author: Luke Jones
CATEGORY: Industry News
Earthquake regions around Canada have experienced activity in recent weeks. Southwestern Quebec was hit by a 3.4 magnitude quake and Vancouver Island experienced. While the earthquakes were significant in their own right, they also served as a warning of potential worse things to come.
Recently, a study by the Institute for Catastrophic Loss Reduction (ICLR) showed the area in and around Montreal could face a bill of between $10 billion and $30 billion in fire damages if a major quake hit the region.
“The two areas which the insurance industry is most concerned about is the Montreal-Quebec City corridor and then lower mainland BC,” said Craig Stewart, vice president of federal affairs for the Insurance Bureau of Canada (IBC).
Stewart suggests two earthquakes in major port cities in Canada could send the country into a recession.
“What the modelling is showing us is that a significant quake in British Columbia would likely knock out the airport, would likely knock out port facilities, would likely do significant damage, particularly in the areas of Surrey and Richmond in BC. There is a possibility of tsunami damage around Vancouver Island, including up the strait to Nanaimo. The most alarming piece is that there’s a possibility that the actual continental shelf would drop, which would mean that there would be extensive inundation across the delta, right in the corner of southwestern BC, which would result in a significant loss of property. In that scenario, we would expect that the port of Vancouver could be out of function for at least a year.”
In Quebec, the situation is equally as problematic. In Quebec City, a quake would cause major structural damage because many buildings we constructed before there were building codes.
“It’s an old city and the infrastructure is aging. A moderate, shallow quake proximal to Montreal – so that would be around 6.0 on the Richter scale – would do significant damage to Montreal, and it would be a similar situation where transportation infrastructure would be severely compromised,” explained Stewart. “We would be looking at port facilities being out of service and rail lines servicing Montreal out of service for a lengthy period of time.”