Climate Risk is a Core Issue for Municipalities

Climate risks to communities and infrastructure can no longer be seen as future challenge. It’s an immediate financial, operational, and governance concern for Canadian municipalities.

Extreme weather events are no longer rare. They are regular, damaging, and they are redefining the strategies and investment decisions that municipalities need to be making today. Communities must build climate resilience, through risk assessment followed up with practical and implementable actions that become part of regular operational decisions.

Flooding in urbanized areas is a growing threat, as municipalities observe 1-in-100 year storms with greater frequency.

From Weather Events to Economic Disruptors

Canada has seen a significant increase in insured losses from climate-related disasters, with annual losses exceeding $3 billion in 2022 and 2023 —nearly quadruple the long-term average from previous decades. This includes:

• Catastrophic wildfires, displacing communities and destroying infrastructure

• Ice storms, causing widespread damage through fallen trees, power outages, and road accidents

• Flooding, overwhelming drainage systems, damaging homes and businesses

• Heatwaves, straining energy systems and threatening public health

These events are no longer isolated. They are predictable enough to require strategic planning, and costly enough to impact municipal budgets, insurance markets, and Canada’s national economic competitiveness.

Climate Risk becomes Financial Risk

Rating agencies, banks, and insurers have embedded climate risk into growth models. Insurance premiums are rising, and insurance is no longer offered in some high-risk areas. Municipalities that fail to plan for climate risks may face higher borrowing costs, reduced insurability, and a weaker economic profile - where homes cannot be insured if they are at risk.

Adapting proactively by embedding climate risk responses into capital planning, budgeting, and infrastructure investment strategies can help municipalities remain competitive and insurable. To do this successfully, municipalities must:

• Coordinate across departments (planning, finance, infrastructure, public health)

• Engage with residents on equity-focused climate adaptation

• Prepare for legal and reputational risks if responses are insufficient

This calls for a new kind of leadership — one that treats climate adaptation not as a “green” task, but as a governance imperative. Local governments must shift from climate awareness to climate accountability.

UrbanRe partners with municipal leaders to embed resilience thinking into investment planning, facilitating strategies that align with evolving public expectations, legal frameworks, and community needs.

Adaptation is an Investment, Not a Cost

Adapting to climate risk is expensive — but inaction is far more costly. Each dollar invested wisely into infrastructure resilience can lead to over 10 dollars of savings due to reduced damages and avoided costs over 10 years. Cities that invest in proactive adaptation often experience:

• Lower disaster recovery costs

• Higher resident confidence and safety, with investor and insurer support

• Opportunities to fund and pilot innovative infrastructure strategies

UrbanRe helps put municipalities at the forefront of adapting infrastructure to reduce climate risks. We help municipalities identify and invest in scalable, nature-based, and community-centered solutions that create long-term value, environmentally and economically.

UrbanRe’s Role in Climate Risk Strategy

At UrbanRe, we help municipalities and organizations assess local climate vulnerabilities, project future scenarios, and integrate climate risk into asset management and financial planning. This can also include:

• Identifying nature-based solutions and equity-focused interventions

• Developing practical, implementable actions for resilience and strategic roadmaps

• Collaborate across departments to embed adaptation into the municipal governance fabric

Our team is committed to preparing communities for a resilient future through collaboration and innovation, bridging the gap between climate data and real-world decision-making.

A New Era of Accountability

The era of viewing climate change as someone else’s problem — or a problem for tomorrow — is over. The question now isn’t if cities should respond, but how quickly and how strategically they can act.

Climate risk is a business risk. Resilience is now an economic advantage.

UrbanRe is here to help municipalities adapt, to continue to thrive in a changing climate.