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Dustin Garrick is Philomathia Chair of Water Policy at McMaster University. He also serves on the task force of the OECD/Global Water Partnership on Water Security and Sustainable Growth.

More than a year after U.S. President Barack Obama visited the parched fields of California's breadbasket – the Central Valley – an already severe and sustained drought has intensified in the world's ninth-largest economy.

California just announced its lowest Sierra Nevada snowpack in history for this time of year. Unlike a hurricane, which departs as suddenly as it appears, we now have a front row seat for the slow-moving disaster that is drought. We may feel at a safe distance, cradled by the Great Lakes – the world's largest surface freshwater system – but Canadians are not immune from the impacts of these droughts.

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Like a financial crisis, drought is a 'systemic risk' – and we are all part of the economic and geopolitical system impacted by current shortages in California and Sao Paulo, Brazil. The consequences of the California drought do not stop with the California border or even the Western United States. These ripple effects are delivered through global trade, potential for price shocks in agricultural commodity markets, and energy security issues due to the double crunch of lost hydropower supplies and rising energy demand for groundwater pumping. (In 2013 alone, Canada imported $2.7-billion in food products from California according to Statistics Canada.)

Canadians are also less and less insulated from the geopolitical instability linked to extreme droughts and floods. Drought in Syria accelerated migration from farms to rapidly growing cities without the work or infrastructure to absorb the arrivals. A headline for a 2013 column by Thomas Friedman of the New York Times on the conflict observed "without water, revolution." Although the prospect of water wars has so far proven more rhetoric than reality, water is a threat multiplier, a factor that combines with other social, economic and environmental pressures. The climate shocks are not just droughts, but also floods. Even relatively minor floods can have dire consequences based on our choices about where and how we live. And these shocks are not isolated. With the immediate focus on California in the wake of its first mandatory state-wide water restrictions, it is possible to overlook the fact that the Sao Paulo drought has left Brazil's largest city with shrinking reservoir storage, declining to 5 per cent of capacity in the vital Cantareira system until a slight rebound last month. This leads to a 'perfect storm' – synchronous droughts in multiple regions with unpredictable and possibly synergistic impacts.

The second reason Canadians are less and less immune to distant shocks is because we have been lulled into a myth of abundance. The Royal Bank of Canada's water attitudes survey has been running for eight years; it started measuring perceptions of extreme flooding and drought. In the 2015 results released last month, the vast majority of Canadians do not believe they live in areas vulnerable to floods (72 per cent) or droughts (81 per cent), although awareness increases in some of the hotspots in Winnipeg, Calgary and the Prairie region. Our 'water risk' literacy appears to be low, a striking contrast with the world's thought leaders surveyed by the World Economic Forum each year for a "global risks report." Water crises have been among the top five risks in this global survey for the past five years. In 2015, water crises reached the highest impact risk for the first time. It's time for us to wake up to water risks in an era of climate change.

Never waste a crisis but do not wait for one. A 2014 paper in Science suggests it's freshwater variability that matters, not a black and white world of abundance versus scarcity. The floods in Toronto and Calgary in 2013 illustrate this vividly, with the Calgary flooding alone causing almost $6-billion in damages – one of Canada's costliest natural catastrophes. Two years later, flooding has receded from the political agenda. This demonstrates the short-term memory of politics and the tendency to react rather than prepare. We should take note of California's efforts to seize the crisis as an opportunity. The responses to the California drought last year were an auspicious start – creating the political window for groundwater legislation, which had been elusive despite rapid depletion. California shows the importance to never waste a crisis, but do not wait for one. The architects of the groundwater legislation were 'lying in wait' for their opening. Even while the pain intensifies this summer, the drought will end eventually, and 'drought amnesia' will set in as it does with flooding. And the jury is still out in California, a raft of desalination plants and other schemes could leave coastal Californians with an unwanted legacy long after the current shortages are addressed, mirroring the experience in Australia less than a decade ago. We can learn from the successes and failures across world.

Focusing on variability and shocks shows that Canada's defining water challenges – flooding, safe drinking water crises in the Great Lakes and across First Nations, and degraded waterways and nearshore environments – are already at the top of the global agenda. The common thread is water risk. We need to learn how to understand, measure, communicate and respond to it.

As Canadians, we should heed the clarion call for proactive action. Now is the time to plan and prepare for more frequent and severe extreme weather events. We need innovative policy tools and economic incentives to manage risk, equipping the insurance industry with an updated regulatory framework to use flood insurance to convey information about risks to home buyers and governments from the municipal and provincial level on up. Yes, we need to price water to encourage conservation, but we need to beware the strawman of free markets. Water markets can work, but they're not free. Sound governance is needed at all levels.

The ripple effects of distant extremes also mean that more key sectors and players need to be at the table – water is part of the economy and environment. The corporate world is waking up to water risk. Ontario is already positioning itself as a water technology leader. But the risks are important beyond the water sector.

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We also need to learn the language of water risk, and learn how communicate in this common language for science, policy and enterprise. Understanding water risks can leverage the information economy and big data to monitor, map and manage risks to guide behaviour at the household level, and build capacity in local governments, to tailor the solutions needed for resilient communities. In an increasingly urban world, cities will be the font of innovation; let's empower them.

Like our financial risks, a portfolio of solutions is needed, not a silver bullet. No single solution will work; a package of institutions, infrastructure and information will be needed. We have more expensive options and cheaper options, but no cheap options, nor permanent ones. It's time for our water bills to be higher than our cellphone bills (yes, to pricing – but with social safeguards to ensure affordability for the poor), but it's also time for all of us to get informed about water risk, and roll up our sleeves as water citizens. Water is rarely atop the political agenda unless it's a crisis. Canada – let's not waste this one.

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