Amid a fire season that has seen a record number of blazes, wildfires and poor air quality are top-of-mind concerns for commercial property developers, industry insiders say.
The fires have burned an unprecedented amount of land from coast to coast in Canada, entering communities not typically in harm’s way, such as the outskirts of Halifax, and triggering air quality warnings as far away as Europe.
“It’s been a major point of discussion for some time now and landlords have taken measures such as putting in a number of air exchanges and upgrading to more advanced air filtration systems,” says Samantha Sannella, managing director, consulting services, Canada at Cushman & Wakefield. “It’s something occupiers ask for.”
Ms. Sannella says the growing fire threats are forcing innovation in design and development that could include the use of fire-resistant building materials and Internet of Things technology to oversee sensors and fire suppression systems.
Glenn McGillivray, managing director of the Institute for Catastrophic Loss Reduction (ICLR), a disaster-prevention research centre established by Canada’s insurance industry, says with the wildfire trend moving in the wrong direction as urban boundaries expand, it’s more than likely wildfires will reach urban areas.
“The more fire we see, the more it’s going to get into communities and the more businesses are going to be affected. We’re going to see businesses directly hit by wildfires and operations interrupted,” he says.
Against this backdrop, “there is a huge regulatory gap that needs to be addressed,” Mr. McGillivray says, adding that there are no specific provisions in residential or commercial building codes relating to wildfires.
“There isn’t even any guidance on how small businesses can reduce the risk of wildfires,” he says, though the building code does require that engineers attest that a building designed by an engineer or architect conforms to design standards, and that all potential hazards, such as tornadoes, floods or fires, have been considered.
In Ontario, municipal bylaws and the site-control process that examines design and technical aspects of a proposed development can address wildfire threats at the planning stage of construction, says Victoria Podbielski, press secretary for Ontario Municipal Affairs and Housing Minister Steve Clark.
Municipalities in the province are required to conduct a community risk assessment every five years to identify threats to fire safety, including from wildfires, she says.
“If any new provisions are brought into the National Building Code to address wildfire management, including additional requirements for indoor air quality controls, Ontario would consider the same for analysis and potential inclusion in its building and fire codes,” she says.
FireSmart Canada, a national program that aims to help neighbourhoods increase wildfire resistance, offers resilience guidance for the oil and gas industry that could be adapted to other commercial sectors, Mr. McGillivray says.
ICLR executive director Paul Kovacs says oil sands operators prepared well for the wildfires that ravaged the Northern Alberta community of Fort McMurray in 2016, relying on firebreaks and other protective measures. The flames came very close to their installations but ultimately caused no major damage or injuries.
Mr. Kovacs says industries operating in the so-called wildland-urban interface have a business case for investing in wildfire mitigation.
B.C.-based fire ecologist and consultant Robert Gray says most of the land in the interface in the province is owned by the Crown, limiting private developments in fire-prone areas.
The more fire we see the more it’s going to get into communities and the more businesses are going to be affected.— Glenn McGillivray, managing director of the Institute for Catastrophic Loss Reduction
The wildfire in the Wood Buffalo region that includes Fort McMurray remains the most damaging in Canadian history, with property and casualty insurance claims of more than $3.6-billion to date. Public Safety Canada estimates that more than 2,400 homes and businesses burned down in the region in 2016, with another 530 structures damaged.
The event skews data published by Catastrophe Indices and Quantification (CatIQ), which show that Canada’s insurance companies reported 82,692 wildfire damage claims totalling $4.1-billion for the 10 years through 2022.
This included 50,000 residential damage claims worth $2.4-billion; 7,000 small business claims of $500-million; and 474 claims from large companies for $1.1-billion. Residential and small business damage account for $2.9-billion or almost three-quarters of the total.
The 2022 total insured catastrophic loss of $3.1-billion lands the year in the top three loss years for the country.
According to a June, 2023, report by DBRS Morningstar, Canadian property and casualty insurance companies bear the weight of an above-average wildfire season.
Fire occurrence ‘off the charts’
Marcos Alvarez, global head of insurance at DBRS Morningstar, says while financial results are likely to come under pressure this year, “we expect those insured losses will remain manageable for most companies.”
He added in an e-mail that insurance companies “usually pause underwriting new policies in areas affected by wildfire.” An existing policy for a property in those areas “would need to be revised to make these protections a requirement, (probably at its annual renewal process),” he said.
Michael Norton, director general of the Canadian Forest Service’s Northern Forestry Centre, said in a wildfire update posted on YouTube in early July that the total area burned in 2023 exceeds any year on record in Canada, with the 150,000 people displaced the highest in the four decades of record-keeping.
“The occurrence from coast to coast is unprecedented,” Mr. Norton said, calling the total of hectares burned versus the 10-year average of 805,196 hectares “literally off the charts.”
The Canadian Interagency Forest Fire Centre reported on July 19 that more than 11 million hectares have been consumed to date, with most of the wildfires burning in B.C. According to Natural Resources Canada data, 2023 is already the worst fire season in Canada’s history, topping the previous record of 7.6 million hectares burned in 1989 and with several weeks of fire season still to go.
Cheryl Evans, director of flood and wildfire resilience at the Intact Centre on Climate Adaptation at the University of Waterloo, says small businesses and homeowners can do simple and inexpensive things to mitigate against fire risk such as clearing debris from properties and changing furnace filters.
At the same time, she says, they can “nudge local, provincial and federal government to start moving things further along to provide wider protection.”