Extreme weather driven by irreversible climate change is reshaping financial risk across every sector of the Canadian economy.  Flooding in southwest British Columbia is the most recent demonstration of how this evolving risk impacts homes and businesses.

In 2022, the Office of the Superintendent of Financial Institutions (OSFI) established the Climate Risk Hub to build internal expertise and advance its supervisory capabilities of climate-related financial risks. At the time, it foreshadowed the growing impacts of extreme weather; by 2025, the hub had evolved into a permanently mandated Catastrophic Risk Division.

Of direct relevance to many Canadians, OSFI recognized that extreme weather — primarily flooding and wildfire — had the potential to convey material risk to residential housing and, by extension, sectors under its charge that included: banks (mortgage providers), life and health (L&H) insurance and property & casualty (P&C) insurance. Let’s consider why OSFI was concerned with extreme weather affecting housing and the subsequent actions it took.

Relative to mortgage risk, homes sold in communities impacted by catastrophic flooding over the past decade across Canada experienced........

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