Insurers Push for Public-Private Earthquake Protection Scheme Ahead of 2026 Budget

Canada’s insurance industry, represented by the Insurance Bureau of Canada, has been urging the federal government for a dedicated earthquake reinsurance mechanism for more than 20 years. Recent consultations with the Department of Finance have brought the parties close to an agreement on a cost-neutral, public-private plan that would only be activated when insured losses surpass a predefined level, such as $40 billion.

The scheme mirrors the U.S. terrorism-risk model, requiring insurers to repay the government through temporary premiums after a quake. Experts warn that a major event could generate claims far beyond insurers’ $30 billion capacity, potentially destabilizing the market. While the government has not confirmed inclusion in the 2026 budget, insurers remain optimistic that the fall budget will outline the framework, including limits on federal contributions and repayment schedules.