Canada's aging water and sewage systems will not be able to cope with a disaster caused by climate change, says the president and CEO of the Insurance Bureau of Canada (IBC).

Mark Yakabuski is calling for a national action plan that includes public-private partnerships to protect water, sewage and electrical infrastructure from storms, floods, and other mishaps that result from global warming.

"Even the very best global efforts to reduce the consumption of carbon fuels will not help us evade the reality that the future for ourselves and for several generations to come will be characterized by dramatic climate change, where precipitation is more severe and more frequent than ever in our memory," said Yakabuski in a recent speech to the Vancouver Board of Trade. "None of our communities have been built on the knowledge of this reality."

The Toronto-based IBC represents Canada's private home, car and business insurers, who provide coverage for 95 per cent of the property and casualty market.

Mark Yakabuski

Recent large payouts by insurance firms have included:

* $200 million in damages caused by the Kelowna forest fires in 2003.

* $130 million after winter storms slammed the B.C. Lower Mainland in late 2006 and early 2007.

* $2 billion in relation to ice storms that struck Quebec and other parts of Eastern Canada in 1998.

"The problem is that all of the critical infrastructure of this country - be it transportation networks, public buildings and our water and sewage systems - have been built according to weather-pattern assumptions that are now totally obsolete," Yakabuski said.

"So my message is simple: We must either act today to take practical steps to prepare communities in this country quickly, or we will have failed to face the future head-on."

Canada's water and sewage systems, many of which are 60 years or older, are not adequately equipped to deal with today's more ravaging events, he adds, and all three levels of government must step up to the plate to invest in rebuilding and maintaining facilities.

"We all take clean drinking water for granted here in Canada, but we should not be so smug," said Yakabuski. "After all, we have been under-investing in water and sewage systems and other fundamental infrastructure in this country for well over 30 years. As our housing stock and population has expanded, we have nowhere near kept up to the need to provide households and businesses with a reliable water and sewage network."

He said building codes must be revamped, land-use policies reviewed in every jurisdiction, flood maps updated for the entire country and the country's electricity-distribution network upgraded.

Maureen Enser, national executive-director for the Urban Development Institute, which represents real estate developers across the country, welcomed the call for a national action plan.

"I think it's a good idea," said Enser. "A lot of our cities are facing decaying urban infrastructure. (The call for a national plan) is a bit late, actually. We're a bit slow off the mark. But we need a national strategy to look at all the infrastructure, particularly around water and protection of those services."

She added 85 per cent of Canadians live in cities, but municipal governments only get eight cents of every tax dollar for infrastructure.

"There's a need for a federal plan and federal partnership to work with cities to help (make improvements)," she said. "There's a good role for the federal government to come in with an infrastructure program."

Bob Rennie, a Vancouver-based condo marketer who partners with developers on properties across the country, said the infrastructure action plan - and future projects - have to be carefully considered. Energy conservation ranks among the top factors when a buyer chooses where to live, but the plan also has to consider the consumer, he said.

"We have to look at it region by region and the cost of putting it in place," Rennie said.

"Can the consumer carry that cost, or is it going to have to be government-subsidized?

"So we have to be careful as we push too much green on them. If you really look at it, countries like Canada - that have a conscience - can't put a dent into what other countries are doing."

However, Yakabuski said the necessary infrastructure investment can come from "creative financing.”

Canada needs to take advantage of large pools of private investment capital in this country and abroad that are looking to invest in good projects, because public funding alone may not be enough, he said.

The Canadian Council for Public-Private Partnerships has estimated there is a $50-$125 billion shortage of adequate infrastructure.

Enser said Ottawa should partner with municipalities on a course of action.

Former prime minister Jean Chretien's Liberal government introduced National Infrastructure Program (NIP) grants in the early 1990s, which saw Ottawa, the provinces and municipal governments each fund a third of every project.

But the current Tory government has shied away from a similar program.

(Monte Stewart can be reached at monte@businessedge.ca)