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Canadian insurers lead adaptation

Re Insurers unready for climate shift (Oct. 27): In contrast to the U.S. situation, Canada's property and casualty insurers have gone to great lengths to help our industry and our communities to cope with severe weather. Insurers know full well the human and economic costs of weather disasters. That's why in 2008, our industry made adaptation to severe weather a priority issue. We committed to leading the conversation and to making communities more resilient.

Since then, we have urged governments to increase infrastructure spending to protect communities. We have funded important research to help further support the case for adaptation. We developed the Municipal Risk Assessment Tool , a multimillion-dollar technology that helps municipalities pinpoint where catastrophic sewer backups are most likely to occur, and we're working to make it available to as many communities as possible. We're partnering with federal and provincial governments on issues such as flood mapping and resilience, and are researching made-for-Canada solutions. And we continue to educate Canadians on how to protect their homes and property against severe weather. Individual insurers across the country also take part in a number of research projects to help improve Canada's capacity to adapt to, anticipate, withstand and recover from severe weather events and natural disasters.

Don Forgeron, president & CEO, Insurance Bureau of Canada


Ring of Fire region needs protection

Re The Ring of Fire failure to ignite (Oct. 22): Reporter Rachelle Younglai deftly digs into the Ring of Fire and goes beyond the rhetoric. What's missing, however, is the ecological context.

The Ring of Fire is located in the heart of an irreplaceable environmental treasure. This wilderness of trees, wetlands, lakes and rivers is part of the planet's largest intact forest – the Boreal Forest. First Nations call these lands their ancestral home and have inherent rights to the land. The region supports hundreds of plant, mammal and fish species, most in decline elsewhere, and is the continent's main nesting area for nearly 200 migratory birds. For some species, it's the last refuge. As one of the world's largest storehouses of carbon, it helps keep climate change in check.

Sadly, there is no plan or over-arching vision here to ensure these irreplaceable values are protected forever before new mines, roads or transmission lines are built. It's time Ontario takes the lead on developing such a plan with local First Nations, scientists, industry and the public. We can all get behind that.

Anna Baggio, director, conservation planning, CPAWS Wildlands League, Toronto


Economics 101 needs a history lesson

Re Economics 101 no longer cutting it (Letters, Oct. 25): I disagree with the professors of economics that the financial crisis was the result of unregulated markets. Economics is fine, although it is not taught well any more.

The roots of the crisis were equally deep in bad business, bad policy that distorted markets, and bad behaviour. And since economics, properly taught, deals with all three, the crisis fits quite easily into mainstream economics.

But make no mistake: Government policy was at the heart of the crisis, encouraging high-risk mortgage lending and consumer borrowing, and allowing deposit-taking banks to hold high-risk securities, all guaranteed by the taxpayer. This is classic government meddling in markets, not markets malfunctioning. Economics 101 has no trouble explaining this: When the cost of a default is borne by someone else, there will be lot more bad loans.

Neither does economics fail to explain the 'more mundane examples' such as the current lack of inflation and low interest rates. The economics that I studied said that inflation results when excess money is in circulation. One reason the recent central bank bond purchases are not inflationary is because consumers are paying down debt [in the U.S., at least] for reasons that have nothing to do with interest rates – they just want less debt. So interest rates can be zero, and people won't borrow. The printed money is not getting into circulation, so there is no inflation. This is called a "balance sheet recession" and may actually be Economics 400, but it's still economics.

The fault with economics today is that it is full of mathematics and short on history.

Chris Horan, Toronto


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