Major quake could cost US$74 billion to Canadian economy
Conference Board of Canada says insurance companies would fail and spread financial ‘contagion’
By Nelson Bennett
After a 7.3 magnitude earthquake rocked Fukushima, Japan, which is still recovering from a 9.0 magnitude quake in 2011, the Conference Board of Canada released a report that warns Canada’s economy could suffer catastrophic damage, should Vancouver ever be hit with a magnitude 9.0 quake.
According to economic modelling, thousands of buildings in Vancouver wouldn’t be the only things that would collapse – so too would insurance companies and the resulting “contagion” would cause insolvencies in the financial sector and many industries.
The report was funded by the Insurance Bureau of Canada.
Modelling tested the ability of Canada’s economy to absorb the financial shocks of a major earthquake and concluded: “Canada is not prepared to deal with the macroeconomic and fiscal consequences of a massive earthquake.”
According to the modelling, a worst case scenario could result in 43,700 jobs lost over 10 years and a total of C$127.5 billion (US$94.8 billion) loss in economic losses.
“At the industry’s current levels of capitalisation, Canada is not prepared to deal with the macroeconomic and fiscal consequences of a large earthquake,” Pedro Antunes, deputy chief economist for the Conference Board, said in a press release.