Builders work on a new construction on a block that was burned down, roughly one year after the wildfire in Jasper, Alta., on Monday, July 21.AMBER BRACKEN/The Canadian Press
Residents and business owners in Jasper, Alta., are at risk of running out of insurance coverage for additional living expenses and business interruption, as delays in rebuilding after last year’s wildfire continue to challenge the town, an industry association warns.
The Insurance Bureau of Canada said in a new report that, while rebuilding efforts are progressing, only 56 of the 358 properties destroyed in the western Alberta town have as of July 7 received the necessary permits and approvals to proceed with the restoration of homes and businesses.
Insured damage from severe weather events in Canada hit a record $8.5-billion in 2024. That is triple the losses recorded in 2023, and 12 times the annual average of $701-million in the decade between 2001 and 2010, according to calculations by Catastrophe Indices and Quantification Inc.
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At the end of 2024, the Jasper wildfire accounted for $1.2-billion in insured damages. That number is expected to increase, as residents and business owners have had to claim additional living expenses this year through their insurance coverage.
But that coverage is likely to expire, as many home policies exhaust the percentage of claim allocated to additional living expenses, said Craig Stewart, the IBC’s vice-president of climate change and federal issues.
The delay in construction is largely connected to the town of Jasper being situated within a national park, he said. Therefore, there are certain federal remediation requirements that the town has to meet regarding soil testing after a fire.
“Parks Canada is under a mandate to return the park to pristine condition,” Mr. Stewart said in an interview. “When you’re spraying wildfire suppressant chemicals, or you have vinyl siding melting off of homes or treated wood that’s burning, you can end up with contaminants in the soil.”
As a result, the agency needs to be extra cautious from a health perspective and has had to issue fairly extensive soil testing and remediation guidelines, he added.
Burnt buses and cars in Jasper after the 2024 wildfire.AMBER BRACKEN/The Canadian Press
The additional steps have added time, complexity and overall costs to the rebuilding efforts – expenses that are not typically covered under a standard property insurance policy.
Over the past year, Mr. Stewart said there have been disputes around who would be responsible for the added costs, with some homeowners receiving invoices in the tens of thousands of dollars for soil remediation on their property.
However, in a joint statement issued last week to resolve the impasse, Parks Canada and the Canadian Red Cross announced up to $5-million in additional support for Jasper residents who require contaminated soil testing and removal prior to rebuilding permanent housing.
“This new funding will ensure a swift, safe and dignified path forward for those most impacted,” the two organizations said.
The federal government also committed to an “expedited process” to ensure there are no further delays by soil remediation issues. Through Parks Canada and other federal partners, the government says it has invested more than $180-million in rebuilding Jasper.
“With debris removal complete and development permits issued through a streamlined process, the focus has now shifted to soil remediation and ensuring the future health of residents,” Parks Canada said in a statement.
According to the agency, there are currently 500 individuals occupying more than 300 interim housing units in Jasper. In comparison, the 2016 wildfire in Fort McMurray – the costliest in Canadian history – saw much of the reconstruction begin prior to its first anniversary.
The delay in construction is largely connected to Jasper's location within a national park, says Craig Stewart, the IBC’s vice-president of climate change and federal issues.AMBER BRACKEN/The Canadian Press
Mr. Stewart said rebuilding delays – such as the ones happening in Jasper – are occurring more frequently in Canada following after large catastrophic events.
Last summer was the most destructive season in Canadian history for insured losses. In just July and August, 2024, four catastrophic weather events resulted in more than a quarter of a million insurance claims amounting to insured losses exceeding $7-billion.
As a result, the IBC is urging the federal government to lead a national discussion on how to better manage catastrophic events.
“Canada needs a federal co-ordinating agency to guide emergency preparedness and recovery so that Parks Canada, and other jurisdictions, don’t have to create unique playbooks after each catastrophic event,” Mr. Stewart said in the report released last week.
Canada is the only G7 country to not have an agency operating in this capacity, the IBC added.
“It’s time for Canada to follow suit and take on a proactive approach to emergency management,” Mr. Stewart said.
The federal government did not respond to The Globe and Mail’s request for comment.