Climate change costing Canada billions in lost GDP: parliamentary budget officer

Canada’s economy is missing out on billions of dollars due to climate change, and a new report from the parliamentary budget officer finds the hit will be much larger in the decades ahead.

The new report finds that Canada’s gross domestic product (GDP) in 2021 was 0.8 per cent lower than what it could have been without climate change. That equals around $20 billion to $25 billion in lost opportunity.

Parliamentary Budget Officer (PBO) Yves Giroux says that loss will keep rising to the end of the century, hitting about 2.4 per cent by 2050.

“Best case scenario will further reduce Canada’s real GDP by 5.8 per cent by 2100,” he said, noting that’s only if all countries achieve their climate targets in the decades to come.

If not, Canada is expected to be hit harder, especially in sectors like agriculture, tourism, and energy. Coastal regions are also at risk amid rising sea levels, and damage to property has also been listed as an area of concern.

“Our analysis is intended to be a first step in reporting the economic impacts of climate change to parliamentarians,” the report summary reads, in part.

It goes on to note that “Canada’s weather patterns continue to deviate from historical experience due to climate change,” pointing to things like drought, rising temperatures, and severe storms as some examples.

“The sign and magnitude of the climate impact on GDP can vary depending on the size of the climate shock, methodology and dominant channel,” the report explains, adding, “Studies have used different approaches to model the physical impact of climate change on economic output.”

Canada has seen severe storms damage infrastructure and deadly heatwaves pass through various regions with more frequency in recent years. In B.C., a catastrophic atmospheric river devastated parts of the South Coast, leaving highways and communities washed out or flooded.

That came the same year as a heat dome that contributed to hundreds of deaths in the province.

Meanwhile, on the east coast, the storm that made landfall in Nova Scotia in September resulted in devastating damages. Estimates have suggested Fiona was the most costly weather event to ever hit Atlantic Canada.

In September, a report from the Canadian Climate Institute found that damages related to climate change were already adding up quickly from floods, fires, heat, and hurricanes. The institute noted that by 2025, climate change will slow the country’s economy by $25 billion a year.

The PBO’s report comes as the United Nations’ annual climate conference takes place in Egypt, with Canada Environment Minister Steven Guilbeault in attendance.

Guilbeault says the world has only a few years left to keep the planet livable.

The meeting is being touted as the “implementation COP,” which is aiming to move the world’s governments from promises to real action.

Canada has committed to net-zero emissions by 2050.