Canada is unprepared for a major earthquake that would cause between $60 billion and $75 billion in damage, a new study warns.

The report, commissioned by the Insurance Bureau of Canada, says a major earthquake would have a significant economic impact on the region it hits, as well as a domino effect on the entire Canadian economy.

Nearly 4,000 earthquakes hit Canada each year, but the vast majority are too small for humans to notice.

However, there are seismically active regions both off the West Coast and in Quebec that could produce damaging earthquakes within the next 50 years. There is a 30 per cent chance of a major earthquake hitting B.C. in that time period, and a five to 15 per cent chance of a damaging quake hitting Quebec.

It's the first study of its kind in 20 years, and highlights how unprepared Canada is for a major seismic event. The study looked at two scenarios – a major earthquake off the West Coast of British Columbia, and one in Quebec east of Quebec City.

The report does not look at loss of life or casualties, focusing solely on the impact to the economy, but says it considers an earthquake "sufficiently threatening and devastating to warrant prudent planning and preparation now."

Earthquake scenarios

According to the report, a 9.0 magnitude earthquake off the western coast of Vancouver Island would have a major impact on the economy. It estimates that scenario would cause $62 billion in direct damage in the region, primarily due to building damage, and $12.7 billion in indirect impact caused by things like supply chain interruption and infrastructure damage.

Although most Canadians would consider a western earthquake most likely, there is a seismically active area in Quebec that could produce a lower-magnitude quake that would be less devastating but still potentially damaging.

The report's eastern quake scenario models what would happen if a 7.1 magnitude earthquake hit to the east of Quebec City, in the Charlevoix seismic zone. That earthquake could cause $61 billion in damage, $49 billion of which would be direct impact.