Paying for Urban Infrastructure Adaptation in Canada: An Analysis of Existing and Potential Economic Instruments for Local Governments

As is the case in many other countries in the Western hemisphere, local governments in Canada have a significant role to play in minimizing the impacts of climate change on their population, economy, and fiscal budgets. Simultaneously, local governments typically experience limited capacity, expertise, and limited financial resources.This report examines a number of instruments that local governments in Canada may use to generate revenues in support of adaptation in general, and in support of the development of climate resilient infrastructure in particular. The report also examines instruments aimed at incentivizing behavioural changes at local levels that may reduce the need for public investments in adaptation, and could thereby reduce the need to generate revenues in support of such investments. The most effective combination of incentives and investments is likely to vary across local governments.For local governments, it is recommended that they: include adaptation in long-term strategic planning using downscaled climate change projections; reduce incremental costs associated with climate change by incorporating adaptation actions into existing municipal processes (e.g., into infrastructure maintenance and replacement programs, or in updates of community plans); act strategically and be creative with the current tools available.