Canada's wildfire threat is far from a seasonal footnote. With seasons starting earlier, lasting longer and producing fires that are harder to contain and more destructive, wildfires have become a defining financial and operational risk for businesses from coast to coast. And the 2026 wildfire risk outlook in Canada is yet another signal to businesses that now is the time to prepare and ensure their resilience.
Wildfires are a growing and evolving risk
For many Canadians, the summer of 2024 made the wildfire crisis impossible to ignore. The town of Jasper, a beloved mountain community and gateway to one of Canada's most cherished national parks, watched nearly one-third of its homes and businesses burn to the ground. Images of the destruction were shared across the country, felt personally by the millions of Canadians who had camped there, hiked its trails, or simply grown up knowing it as a fixture of the national landscape.
Alberta alone recorded over $1 billion in wildfire losses that year. Nationally, 2024 became Canada's costliest year on record for overall insured catastrophe losses (opens a new window), at approximately $8.5 billion. For commercial insurers specifically, it was the most expensive year in nearly a decade, according to the Insurance Bureau of Canada (opens a new window).
Jasper was the latest chapter in a decade of escalating wildfire losses. Canada experienced 16 catastrophic wildfire events between 2016 and 2025 (opens a new window), compared to just two in the decade prior. The trajectory had been building for years: the 2016 Fort McMurray wildfire forced 80,000 people from their homes and caused over $4.8 billion in insured damages (in 2025 dollars). And 2023 was record-breaking, when we saw 6,000 fires destroy 15,000 hectares of land (opens a new window) – an area the size of England.
The question is no longer whether Canadian communities are vulnerable, but how much so. Last year carried its own warning on that front, despite a reprieve on the surface. As Laura Twidle, President and CEO of CatIQ (opens a new window) put it, “while 2025 marked a welcome reprieve after the record-shattering losses of 2024, the data shows that this 'average' year was anything but. We saw the highest number of fire-related CATs declared, and, perhaps more notably, these all occurred in provinces that had never had a prior industry fire catastrophe."
The toll also falls unevenly within Canada. First Nations communities account for 42% of wildfire-related evacuations (opens a new window) despite representing approximately 5% of Canada's population, according to government data. Last year, nearly 45,000 people from 73 First Nations communities were displaced by wildfires (opens a new window).
The 2026 outlook for wildfires in Canada
Canada's 2026 wildfire season is shaping up to be a potentially serious one. According to the Government of Canada's 2026 preparedness update (opens a new window), above-normal temperatures are forecast for nearly all regions of the country through the summer months, compounding long-standing precipitation deficits, particularly across western Canada. British Columbia faces the highest and most sustained fire risk, while elevated fire danger is expected to emerge quickly in parts of northern, central and eastern Canada as well. Northwestern Ontario, forecast to receive below-normal precipitation, is among the regions drawing particular concern.
The federal government has been explicit that this is not a risk confined to historically vulnerable areas. New geographies are entering high-risk territory and the conditions driving that shift – hotter, drier, and windier weather patterns – are the product of longer-term climate trends, not a single anomalous season.
In response, Ottawa has made wildfire preparedness a significant budget priority, committing dollars to aerial firefighting, civilian response and preparedness and response in federally administered land. Notably, the National Public Alerting System – a critical tool for getting warnings to Canadians quickly – is being modernized with $55.4 million over four years. Longer-term, a $285 million investment running to 2028 is focused on reducing wildland fire risk broadly, including expanding the reach of FireSmart™ Canada guidance into high-risk communities.
Support for Indigenous communities, who bear a disproportionate share of wildfire displacement, is also a thread running through the federal response. The government is directing tens of millions in ongoing annual funding through Indigenous Services Canada to support First Nations emergency preparedness, community resilience, and local health capacity, alongside a five-year, $57.2 million commitment to Indigenous-led FireSmart preventative measures in high-risk areas.
These are meaningful commitments, but government investment does not insulate businesses from operational disruption, property loss, or the growing complexity of the commercial insurance market.
How Canadian businesses can stay resilient to wildfire risk
For businesses operating in Canada, the escalating wildfire environment demands active preparation.
Develop and test an emergency action plan. Every organization operating in or near wildfire-exposed areas should have a documented emergency action plan that identifies core response teams, defines individual roles and clearly outlines evacuation procedures and alternative operating locations. Plans should be tested regularly and updated as staff changes or facilities expand.
In the event of an active fire threat, key actions include monitoring official fire progress updates, confirming fire suppression systems are operational, relocating or securing critical assets, backing up servers and digital records and photographing property for insurance valuation purposes.
Create defensible space around your property. Physical preparation of the property itself is one of the most effective risk reduction steps a business can take. This means removing combustible vegetation and debris in the immediate vicinity of buildings, trimming trees with overhanging branches close to structures, clearing gutters of dry material and maintaining well-watered landscaping buffers where feasible. FireSmart Canada offers detailed, evidence-based guidance on defensible space standards for commercial and residential properties alike.
According to a joint industry report by Lockton Re and Green Shield Risk Solutions, (opens a new window) capturing and implementing even a single localized mitigation feature, such as a managed defensible space or a fire-resistant roof covering, can drive an immediate 6% to 13% reduction in modeled losses.
Prepare for recovery before you need it. Recovery from a major wildfire can take months or years. Businesses that have pre-arranged restoration services, maintain detailed and current property inventories and carry accurate asset valuations are significantly better positioned to navigate the claims process and return to operations faster. Stockpiling long-term fire-retardant products where appropriate can also limit structural damage during a fire event.
Review your insurance coverage carefully. Work with your broker to ensure your coverage does not contain wildfire exclusions and confirm that smoke damage and secondary perils (such as landslides or debris flows that can follow a burn) are included in your policy. As wildfire risk expands into new geographies, standard policy assumptions may no longer reflect your actual exposure. Adequate limits, not just coverage in principle, matter significantly when losses materialize.
Parametric insurance products are also worth exploring. Unlike traditional indemnity coverage, parametric policies can provide rapid claims payments, in some cases within 30 days, and can be structured to cover operational losses tied to air quality deterioration or other conditions beyond physical property damage.
Demonstrate active risk management to your underwriters. Businesses that can demonstrate proactive risk management practices are better positioned to secure coverage and negotiate terms. This may include sharing data on vegetation management, fire suppression system maintenance, staff training, or technology deployments that reduce ignition risk. Underwriters are increasingly attentive to the quality of risk, not just its location.
This effort has a direct financial payoff: the Lockton Re and Green Shield Risk Solutions joint report (opens a new window) shows that thoroughly documenting property-level safety features can lower a business's modeled risk profile by an average of 20%. This gives underwriters the concrete data they need to justify premium discounts and secure better coverage terms.
Now is the time to prepare for escalating wildfires
Wildfire risk in Canada has crossed a threshold. It is no longer a regional concern or a rare catastrophic outlier but a systemic and growing feature of the national risk landscape. The case for action has never been clearer. Businesses that treat wildfire preparation as a strategic priority and not just a facilities management task will be better positioned to protect their people, preserve their assets and recover faster when the next fire arrives.