A resident views a property that burned during the Eaton fire in the Altadena area of Los Angeles county, Calif., on Jan. 21.JOSH EDELSON/AFP/Getty Images
Elliott Cappell is PwC Canada’s national climate change leader. He previously served as Toronto’s chief resilience officer.
For Canadians, it might be hard to fathom just how destructive the Los Angeles wildfires have been. So let me describe the rough equivalent: It would be as if the entire downtown and midtown of Toronto, from Lake Ontario to roughly Eglinton Avenue, was burned to the ground in a matter of days.
Imagine the effects that would have on families, the economy, and our environment. It would be a national emergency.
Toronto, L.A. and cities worldwide are on the front lines of ever-growing extreme weather. Part of what has made the L.A. fires so extraordinary is the combination of different extremes that occurred in sequence, which is being referred to as the “bloom-combust cycle.” From 2022 through mid-2024, America’s second-biggest city experienced one of the wettest two-year periods on record, which led to a massive bloom of vegetation. This was followed by a record-breaking heat wave in late 2024 and the driest May-to-January period on record. This historically extreme combination of wet-hot-dry left behind significant amounts of highly combustible fuel scattered across the region. Recent research has shown that climate models typically underestimate this “hydroclimate whiplash.”
Climate models are relatively strong on simpler metrics such as temperature or precipitation, but more complex and localized impacts are not as well understood, and it’s possible modelling significantly underestimates some risks. Climate scientists, for instance, hold divergent views on how climate change will affect winds, such as the Santa Ana winds, which also played a role in the L.A. fires.
So there is, then, a meaningful takeaway for Canada: though the conditions that caused the L.A. fires were extraordinary, extraordinary is also very much plausible here. Because our understanding of the risk in our climate projections is worryingly incomplete, we don’t know how much we have accounted for the most severe plausible impacts.
An obvious place to start working on this challenge is to listen to the insurance sector when they say that some parts of our country will be uninsurable due to climate change. In the case of Los Angeles, insurers were the among the first to act on climate risk, having pulled policies from the Pacific Palisades in recent years. Already we see in Canada that insurers are pulling back from the known risks, like basement flooding in higher-risk zones. At some point soon it may be hard to call a flood or a fire force majeur, given the evidence of what we know is coming.
Having higher-quality, locally specific climate change data is also essential to assessing risk. Over the past 10 years, Canada has gone from a laggard to a leader in this space, investing in the creation of the Canadian Centre for Climate Services and hosting world-class organizations like Ouranos in Quebec. The job is not done, though, and investing in Canada-specific climate data, making it free to access, and training an AI-equipped generation of professionals needs to be a priority. It is critical for Canadians to make investments in Canada-centric research, because local phenomena like lake-effect snow or the Prairies’ chinook winds will never be a top priority for other countries. This “climate data nationalism” approach would pay dividends for the Canadian economy moving ahead.
Canadian businesses and investors will then need to take that data and use it across enterprise-wide functions such as risk management, strategy, due diligence and procurement. Climate risk is a specialized function today, but the goal should be to integrate climate into the enterprise. Regulation should be a last resort but on the table if businesses adapt too slowly, which is the current state of play: PwC Canada’s 2024 research on Canadian companies’ disclosure shows that 81 per cent had not yet quantified climate-related risks.
The old Bruce Springsteen lyric still holds true: You can’t start a fire without a spark. The L.A. wildfires required some ignition, and it could have been human-induced. We need to invest in early warning systems to make sure Canadians are aware of risks in real-time so as to prevent such ignition, and bad actors need to be held to account.
None of what I have said is all that controversial – and yet unfortunately it will be. Once the term “climate” is attached to sound risk management, even polite Canadians often put their sensibilities on ice. The depoliticization of climate risk is essential to maintaining progress. Like other extreme and imminent risks to our major cities, ports, roads, telecommunications, and military, we should call climate risk what it is: a matter of national security.
The roadmap is relatively clear: manage our known risks, improve the data, get the data into the hands of the decision makers, and treat the risk seriously. The L.A. fires are a tragedy – but let’s not assume it can’t happen here, and let’s not dismiss the extreme but plausible risks Canada faces due to climate change.