Canada’s Budget 2026 proposes an earthquake insurance facility that could provide up to C$50 billion in emergency funding to insurers after an extreme earthquake.
For homeowners, the distinction matters: supporting the insurance system does not automatically add earthquake coverage to an individual home policy.
What is Canada proposing?
The government plans legislation to establish the Canadian Earthquake Insurance Facility. Financed through levies on insurers, it would help the property and casualty insurance sector meet claims and maintain financial stability after an extreme earthquake.
The budget highlights southwestern British Columbia and the region between Ottawa and Québec City as areas facing significant earthquake risk.
Does this mean households receive free earthquake insurance?
The budget describes an industry funding mechanism rather than a household insurance policy. Readers should not interpret the announcement as confirmation that their home is now covered.
The legislative measures accompanying the budget also describe the facility as a proposal. Its implementation and final rules need to be checked as the legislation develops.
Does ordinary home insurance cover earthquake damage?
The Financial Consumer Agency of Canada says home insurance policies may exclude most earthquake damage. Additional earthquake coverage may be available.
This makes checking the actual policy wording more useful than relying on the name of the policy or assuming that “comprehensive” means every disaster is covered.
Ask your insurer or broker:
- Does my policy include earthquake damage?
- What buildings and belongings are covered?
- What exclusions and coverage limits apply?
- How is the earthquake deductible calculated?
- Does the policy cover additional living expenses after an insured loss?
Why does the deductible matter?
A deductible is the portion of an eligible claim that the policyholder must pay. For earthquake insurance, it is commonly expressed as a percentage of a coverage limit.
For illustration only, a 10% deductible applied to a C$500,000 coverage limit would equal C$50,000. This is a calculation example, not a quoted policy term.
Ask your insurance representative to explain your deductible in dollars and identify the amount to which the percentage applies.
What should homeowners do now?
Review your current documents and ask for written clarification of anything unclear. The Insurance Bureau of Canada identifies earthquake protection as optional coverage that can typically be added to a home policy.
The proposed facility concerns the insurance system’s ability to respond after a catastrophe. Your own protection still depends on the coverage, limits and conditions in your contract.