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Eastern Canada could be out billions in the event of an earthquake, report finds

A Hydro Quebec worker navigates a causeway where a section of road collapsed following an earthquake in Bowman, Quebec Wednesday June 23, 2010. (Adrian Wyld/Adrian Wyld/THE CANADIAN PRESS)

People living in Ontario, Quebec and Atlantic Canada are ill-prepared for an earthquake, unlike their counterparts in the West, despite a long history of seismic activity in those areas, according to a report from Swiss Re, a reinsurance company.

Swiss Re predicts $10.6-billion in private residential property losses should a 7.3-magnitude earthquake hit Charlevoix, a seismic zone near Quebec City, that has seen multiple major earthquakes of magnitude 6 or higher dating back to the 1660s. After factoring in commercial, heritage and cultural properties, the figure jumps to $30-billion – nearly 8 per cent of Quebec’s GDP.

The report says some of the most populated regions of Eastern Canada – Montreal, Ottawa and Quebec City– are situated in the most earthquake-prone areas, which was why Swiss Re started to research earthquake preparedness there, despite the risk of much larger earthquakes in the West.

“If you go to Eastern Canada, you have much older buildings on average and not a lot of buildings built with earthquakes in mind, so it takes a lot less shaking to cause damage,” said Balz Grollimund, author of the report and head of underwriting for Canada and the English Caribbean at Swiss Re.

British Columbia is the most earthquake-prone province in the country, making the risk of large earthquakes more imminent on the West Coast. However, Mr. Grollimund referenced the 6.3-magnitude earthquake that hit Christchurch, New Zealand in 2011 as an example of a relatively small earthquake causing devastating damage because it hit the downtown core of a highly populated area even though the awareness of the risk was high and the country has stringent building codes.

“It’s really those scenarios we look at. It doesn’t take a huge earthquake if it’s in the the wrong place,” said Mr. Grollimund.

Despite the size of Canada and some parts being sparsely populated, according to the report, 40 per cent of the population is concentrated in areas with the most seismic activity. In Quebec, 70 per cent of the population live in such areas. While building codes were put in place by the province in 2005 to account for that risk, Swiss Re found that 90 per cent of the existing residential buildings were built prior to them being implemented.

Natural Resources Canada predicts that there is a 5- to 15-per-cent chance that a large enough earthquake to cause damage will hit the Montreal, Quebec City and Ottawa region in the next 50 years. There isn’t an increasing risk of earthquakes in the region but a greater potential for damage, according to Allison Bent, a research scientist with the Geological Survey of Canada.

“The probability doesn’t change. Some years there could be a few more and some years there could be less,” said Ms. Bent. “It’s not that the risk of earthquakes is increasing, but there are more buildings and people now.”

While people in British Columbia have an earthquake insurance take-up rate of about 65 per cent, according to Swiss Re, only 3.4 per cent of the residential property in Quebec is covered for earthquake damage. That type of coverage is usually an optional add-on in most home-insurance policies.

“There’s two ways to approach damage or the aftereffect of an earthquake. One is to prepare for it and do something pre–event, which we feel is the right way to go about it, and the other is to wait until something happens,” Mr. Grollimund said.

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