The Interplay of the Climate and Cost-of-Living Crises in Canada

Canadians call for immediate action on the climate crisis but are drawn back due to the country’s cost-of-living crisis. According to the Canadian Climate Institute, these crises are not mutually exclusive and a proactive adaptation strategy is necessary to address both. 

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Canada’s Rapidly Unfolding Climate Crisis

Extreme weather, wildfires, and floods are becoming more frequent on an international level as the climate crisis continues to intensify. Canada is no exception. 

The country has been seeing significant shifts in temperature and a rise in extreme weather events. Compared to the global average, Canada’s temperature has increased at more than twice the speed, with significant repercussions on the country’s economy and security, and the health of its residents.

Weather conditions have become less predictable, water temperatures are increasing, winters are becoming warmer, and ice caps in the Canadian Arctic are shrinking, according to the International Institute for Sustainable Development and the Library of Parliament of Canada. 

The nation has also seen an increase in wildfires. Canada is home to 28% of the world’s boreal forests. With global warming bringing hotter and drier weather, these forests are becoming increasingly vulnerable to wildfires. According to the National Forestry Database, over 8,000 fires occur in Canada each year, and burn an average of over 2.1 million hectares. 

Moreover, a decrease in surface water and other natural resources has put a disproportionate strain on Indigenous communities. This is because many traditional activities, such as fishing and hunting, have been disrupted as animal populations and other wildlife are being impacted by rising temperatures, habitat loss, and an increase in animal mortality rates.

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With a rise in the frequency and intensity of natural disasters, which not only destroy houses and businesses but can even render certain regions completely inhospitable, temporary or permanent displacement have become more common. Additionally, the increasing frequency of extreme heat threatens the health and wellbeing of Canadians. The Canadian Climate Institute defines extreme heat and heatwaves as situations in which temperatures are abnormally high. An elevated threat to human life exists during such occurrences, as seen in the 2021 heatwave in British Columbia, which claimed over 600 lives. 

In 2022, the Government of Canada committed to a plan to reduce emissions significantly by 2030, and to eventually reach net zero emissions by 2050. According to the Climate Action Tracker, the emissions generated by Canada are beginning to decline as a result, though stronger action has been deemed necessary to meet targets. A National Adaptation Strategy was also published by Canada, including plans for the future and ways to reduce risks caused by changes in the climate to citizens’ safety, health, and livelihoods. 

According to a 2023 survey conducted by Ipsos, about 65% of Canadians are calling on the government to act on climate change and curb its effects on their safety and health. 

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Canada’s Cost-of-Living Crisis

While fighting climate change is a top priority for many Canadians, some find that the cost-of-living crisis is a more imminent issue, according to a 2023 survey of 2,000 Canadian adults by Abacus Data. When asked to identify the top three most significant issues confronting Canada today, 73% cited the growing expense of living, a significantly lower portion – 29% – cited climate change, an indication that the former is viewed as a significantly more pressing concern. 

The growing sentiment among Canadians that the cost-of-living crisis is becoming an increasingly critical issue is rooted in the outpacing of expenses, such as housing, rent, food, utilities, and transportation, in comparison to income growth. According to Statistics Canada, rising prices are not coinciding with salary or wage increases, diminishing Canadians’ ability to meet everyday expenses. 

The housing affordability crisis and continuous rent increases across Canada are worsening financial insecurity for many Canadians, and rent regulation policies only exist in six provinces and they vary greatly, according to the Canadian Centre for Housing Rights. 

Addressing Both Issues

Notwithstanding these economic difficulties, the need to solve the climate crisis urgently persists. Like many other nations, Canada is facing the impending issue of climate change, which puts human well-being at serious risk from extreme weather events and environmental damage. There is no denying the necessity of making the switch to a sustainable economy, and the majority of Canadians concur. 

While it is acknowledged that measures targeted at lowering emissions are crucial going forward, these regulations cannot be implemented at the risk of worsening the living situation of Canadians, such as by increasing taxes or other costs. Environmental and economic issues must be addressed through a balanced and proactive approach. 

According to the Canadian Climate Institute, these two crises are interlinked, with climate change expected to continue costing the government and Canadian households billions of dollars every year. In a 2021 report, the institute found that within this century, heat-related deaths and ozone exposure-related deaths will cost Canada’s healthcare system and economy $8.5 billion and $246 billion, respectively, unless an effective strategy to mitigate emissions is adopted. 

The combined costs of weather-related disasters in Canada increased by 1250% over the past five decades, from an average of $8.3 million per event in the 1970s to an average of $112 million between 2010-2019. 

Climate change is also impacting economic growth. The rise in extreme weather, natural disasters, and other effects of climate change will drive down incomes, raise unemployment and taxes, and increase the cost of goods as supply chains are disrupted, making daily living in Canada even more unaffordable. By 2025, the climate crisis is expected to slow Canada’s economy by $25 billion annually. 

Implementing proactive adaptation measures to reduce greenhouse gas emissions have been recognized as an effective approach to reduce costs preemptively for Canadians and to support the economy, according to the institute. Such an approach has the potential to reduce Canada’s GDP losses by 75%. 

This highlights the importance of implementing proactive mitigation and adaptation strategies to cut emissions and reduce climate-related costs. According to Ipson, these measures have the potential to reduce Canada’s GDP losses by 75%. 

“Our analysis shows that… For every $1 spent on adaptation measures today, $13-$15 will be returned in years ahead in direct and indirect benefits,” a 2022 analysis read.

Climate change has proven costly for the government and for individual Canadians, and effectively combating the climate crisis is thus necessary to address the cost-of-living and other crises the nation is battling with. Individuals can also play their part by opting for a more sustainable lifestyle, though attaining more environmentally friendly options has often proven difficult for many Canadians.

According to EY, 68% of Canadian consumers are making trade-offs when purchasing products as sustainable and energy efficient goods are found to be too costly. Inflation and the cost-of-living crisis are worsening financial constraints and driving consumers to select less environmentally friendly and cheaper products more frequently, despite a desire for sustainable living. This directly affects the environment, as unsustainable production and consumption only further contributes to the climate crisis. On a governmental level, ensuring the affordability of sustainable options, such as for food, housing, and public transportation, can ease the cost-of-living crisis by improving the accessibility of necessities. This can also help alleviate the financial constraints that currently hinder many Canadians from making environmentally friendly choices. 

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Moving Forward

Economic losses resulting from the climate crisis affecting Canada disproportionately affect low-income households, and the affordability crisis continues to become aggravated as a result of issues caused by climate change. The Canadian Climate Institute shines a light on the importance of approaching both the cost-of-living crisis and the climate crisis simultaneously rather than individually as these issues directly affect one another. By doing so, both crises can be effectively combatted without neglecting or compromising on one issue. 

The adoption of a proactive adaptation strategy, alongside Canada’s plan to reduce emissions and some adaptation strategies that are already in place, will improve the future of the country by ensuring economic prosperity, affordability, the health and safety of Canadians, and the protection of the environment.