P&C execs express concern that tariffs are displacing NatCats on political agenda

Canadian P&C insurance company execs don’t want tariffs to displace natural catastrophes as a priority on the nation’s political agenda.  

“The problem with [climate-related initiatives] is that these tend to be multi-year issues, and governments tend to be shorter,” said Paul Fletcher, managing director of business insurance at Aviva Canada, at an Ontario broker conference last week. “And so, to try and get this top of mind of any particular government is difficult because they’re always understandably focusing on the issue immediately before them.

“So in a way, as upset as I am about tariffs, I’m even more upset that tariffs have almost pushed tough weather off of the agenda for a little while. Because everyone’s focused on tariffs and it’s important to focus on tariffs, but we can’t lose sight of the impact that [climate risk has] an existential impact to humanity, and we need to be able to focus on [that].”

Fletcher and other executives spoke at IBAOcon, an annual broker conference organized by the Insurance Brokers Association of Ontario.

U.S. tariffs on Canada are on the minds of insurance brokers as well.

In a separate ‘Economic Outlook’ presentation at IBAOcon, Doug Porter, chief economist at BMO Financial Group, discussed the overall impact of tariffs on Canada. He said tariffs are having an unequal effect across provinces.

For example, he noted most of the impact from tariffs thus far has been felt in Ontario (tariffs on steel and cars), Quebec (aluminum), and B.C. (timber).

Estimated exports from Ontario to the United States showed an 8% weighted change from 2024, according to a slide in Porter’s presentation. Quebec’s exports to the U.S. show a 12% change from 2024, while B.C.’s exports to the U.S. have changed just under 6%.

But in Alberta and Newfoundland, the impact of tariffs has been muted (an estimated difference of just 2% of U.S. exports), as Porter noted.

U.S. President Donald Trump has imposed several tariffs on Canadian exports to the United States since his administration began in February 2025.

Also in the news: Canada’s commercial market feels “weird,” insurer execs say

Among them, he imposed 50% tariffs on Canadian steel and aluminum exports to the U.S., a 25% tariff on all cars and trucks not built in the U.S., a 35% tariff on softwood lumber, and a 35% tariff on all imports that don’t comply with the Canada-United States-Mexico Agreement (CUSMA).

“So, the average tariff rate the U.S. is imposing on Canada right now is somewhere between 6% and 7%,” Porter said. “Now, coming into this year, it was less than 1%, so that’s a pretty abrupt change. But that is actually one of the lower rates in the world.”

Whether this has changed in light of Trump cancelling tariff deal negotiations with Canada last week remains to be seen. Citing an Ontario-funded TV ad that sourced edited clips of Ronald Reagan criticizing tariffs, Trump has threatened to impose an extra 10% tariff on Canada.

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But all of this press around tariffs has overshadowed the P&C industry’s efforts to build resilience against natural catastrophes, P&C insurance company executives observed on the panel.

The P&C industry has promoted several climate resilience initiatives to politicians, including flood maps, a national flood backstop, building code changes, limiting development on floodplains, a national disaster recovery agency, and establishing a national earthquake backstop, to name a few.

These measures need to gain traction in political circles before insuring NatCat risks becomes “unsustainable,” the executives said.

“To Paul’s point, I’m also disappointed the tariffs have taken the focus of the federal government away,” said Evan Johnston, president and CEO of Wawanesa Insurance. “I think had that not been the case, we might have seen more focus on climate. And I just, I’m not optimistic we’re going to see it anytime soon.”

David Gambrill

David has twice served as Canadian Underwriter’s senior editor, both from 2005 to 2012, and again from 2017 to the present.