Carney’s comeback: what it means for the P&C insurance industry

With the scope of the Liberal government’s minority now clear, Canada’s property and casualty (P&C) insurance industry is looking forward to working with a more stable government — and one that intends to move forward on its promise to establish a national flood insurance program.

As of press time, with 99.93% of the votes counted, the Liberals are leading and elected in 169 of Canada’s 343 Parliamentary seats, with 172 seats needed for a majority government, Elections Canada reports. The Conservatives are leading and elected in 144 seats, the Bloc Quebecois 22 seats, the NDP with seven seats and the Green Party with one seat.

The result was notable for the collapse of the NDP and a race between Canada’s two main political parties — the Liberals and the Conservatives, as noted by CBC political commentators on the night of the election. With the vote now clear, Canada’s brokers are calling for the parties to work together for the good of the country.

“The results are clearly mixed and divided,” Insurance Brokers Association of Canada CEO Peter Braid told Canadian Underwriter in an email statement. “Moving forward, we need bold action to confront the economic challenges the country faces, and we call on all parties and levels of government to work together to ensure that we can emerge stronger than ever.”

Prime Minister Mark Carney called the election shortly after succeeding Justin Trudeau as Prime Minister in March. In January, the Liberals’ support was polling behind the Conservatives by 20% to 25%. Braid described Carney’s electoral victory Monday as a “remarkable political turnaround for the Liberal government.”

Carney’s strong minority could give him a wider latitude to implement the party’s election platform without needing substantial support from other parties to move forward, says Craig Stewart, vice president of climate change and federal issues with Insurance Bureau of Canada.

“It’s good news to have a relatively stable government for a change,” Stewart told CU in an interview Wednesday. “Although it’s a minority, it’s a very strong minority, and we expect that we’re going to have, at least for the next two years, a stable and constructive Parliament, which certainly hasn’t been the case over the last few years.

“So that creates an environment where we have a better chance of advancing the issues we care about as an industry.”

Funding flood

One of those issues is the establishment of a national flood insurance program, which appeared in the Liberals’ 2025 election platform.

“We were pleased to see the Liberals recommit to the National Flood Insurance Program (NFIP) in their party platform,” Braid told CU. “We look forward to working with the new Liberal government on getting this important initiative across the finish line. Insurance brokers represent the most effective channel of insurance distribution in this country, and they will be essential to the success of this program.”

Related: New government, old request: Industry renews call for quake backstop

In its 2024 budget, the Liberals committed $15 million for the “Canada Mortgage and Housing Corporation to establish a national flood insurance program, to be developed in partnership with provinces, territories, and the insurance industry,” as the budget reads. At the time, IBC noted the funds were not enough.

But Stewart said the Liberals’ long-term financial commitment in the election platform is more in line with the recommendations of Canada’s P&C insurance industry.

“The important nuance in the Liberal platform is that there’s a timeline to get this [flood insurance program] launched by [next] April,” said Stewart. “And there’s a cost restraint. It’s clear this is to be a low-cost program and that it is to be implemented for $450 million over four years, which is in line with what our industry originally proposed…

“That has to be reinforced in a federal budget. But hopefully we’ll see that in the next couple of months.”

The industry and Trudeau’s Liberal government were in discussions about how the flood insurance program in the short term may lead to an earthquake insurance program in the future.

On Tuesday, the Property and Casualty Insurance Compensation Corporation (PACICC) reiterated the need for a federal government quake backstop, as endorsed a year ago by Canada’s solvency regulator, during its annual general meeting in Toronto.

Stewart says Carney’s financial background as the former governor of the Bank of Canada and Bank of England, in addition to his past work with Lloyd’s when he undertook sustainable finance initiatives, means he understands the insurance industry well.

“He knows how the P&C insurance industry operates, and he gets our issues,” Stewart said of Carney. “He’s familiar with the need for backstops.

“He’s certainly familiar with the need for investments in climate adaptation. And most importantly, he understands the need to work in collaboration with the private sector when it comes to converting government spending from simply spending to investing. And I think we’re going to hear a lot more about that in the months to come.”