Weak productivity, high household debt, low housing affordability, and a strong exposure to physical climate risks top structural economic challenges Canada faces, the OECD highlights in its 2025 Economic Canada Survey.
What the report also shows is how environmental factors (E), social well-wellbeing (S), and effective governance (G) intersect through the lens of housing.
Housing affordability has been front and centre for Canada’s residents from coast to coast, with vulnerable populations facing “the most pressing housing needs.” The reasons are rooted both in the demand and supply sides. One explanation often cited by economists is the rapid increase in Canada’s population, especially among non-permanent residents, which that hasn’t been matched by an increase in housing supply. Canada’s population grew by 3.0% in 2023 and 2.6% in 2024, faster than the U.S. and Europe. This has led the Canadian government to implement measures to curb such immigration, including non-permanent resident admissions. On the supply front, Canada’s new prime minister, Mark Carney, ran on a campaign promise to double the pace of home building.
Climate disasters only compound housing challenges as illustrated by the evacuating orders related to the wildfires currently devastating Manitoba and Saskatchewan.
While the curent wildfires are in the headlines, floods are Canada’s most common and costly natural disaster, with costs projected to keep rising. Rising temperatures and extreme weather events translated into insured losses averaging CAD 2.3 billion per year between 2011 and 2020 – more than five times the average from 1983-2000. These are material financial risks.
The damage isn’t limited to housing and buildings: critical infrastructure, including water systems, transportation, and energy utilities, are all impacted. Addressing this complex intersection of E and S challenges requires robust governance.
The OECD report calls for a shift from simply reacting to disasters to proactive risk mitigation and investment in climate-resilient infrastructure (G/E/S).
How OECD’s recommendations link E, S, and G
Here’s how the report’s recommendations illustrate the need for integrated problem solving:
- Investing in climate-resilient housing and infrastructure: This involves government support for investments in infrastructure that can withstand floods, wildfires, and other extreme weather. It also means integrating climate adaptation into building codes and improving energy performance standards for buildings (linking environmental performance with the social aspect of housing). Such investments, supported by government policies and funding, build resilience and can contribute to more sustainable communities.
- Improving climate risk awareness and disclosure: The lack of public awareness about climate risks is a major barrier to adaptation. Governance can play a role, for instance through disclosure of climate-related risks in property sales. This governmental action provides essential information about environmental risks, enabling individuals and businesses to make informed decisions and potentially encouraging property-level adaptation.
A lack of sufficient climate-related risk awareness prevents individuals and businesses from adapting more effectively. Most people in high flood risks areas are unaware of the risks they face. OECD Economic Surveys: Canada 2025.
- Strengthening insurance and financial resilience: The report calls for improving the availability and risk-sharing of flood insurance, potentially involving a federal subsidiary for reinsurance. Effective governance in this area can help make insurance more accessible in areas facing environmental risks, reducing the financial burden on households and public finances. Combining insurance initiatives with strong incentives for risk reduction is critical to ensure the long-term affordability and resilience of the insurance sector.
- Integrating climate risks into land use planning: Preventing land development in high-risk flood zones is a key governance action that directly reduces social exposure to environmental hazards. In some cases, this may even require considering managed retreat from high-risk areas, a challenging social process guided by governance.
Communications TIP
The OECD’s recommandations underscore that Canada’s economic resilience depends on its ability to effectively manage the interplay between its environmental vulnerabilities and social challenges, particularly within the housing sector.
What it means for communications, whether you communicate directly for the government or the private sector, is that systematically segmenting environmental, social and environmental factors can lead to siloes that prevent your publics from clearly understanding the benefits of policies and public or private investment decisions. While disclosure requirements can drive to a segmented approach, education and thought leadership can help your publics connect the dots and understand how they benefit.
