Panel Recommends Overhaul of Canada’s Disaster Aid System to Confront Era of Climate change
““But Canada’s luck is changing, and without significant investments in disaster risk reduction, it may only be a matter of time until we experience similar events.””
Written by Matthew McClearn
Published April 17, 2023 in The Globe and Mail
Canada’s disaster relief program should restrict payments toward repairing or rebuilding structures on floodplains and other high-risk areas, concluded a report by a federal advisory panel released Monday.
The panel found that the Disaster Financial Assistance Arrangements (DFAA), a cost-sharing program between the federal government and the provinces and territories, had changed little since its introduction in the 1970s. It serves as “de facto insurance” for hurricanes, flooding and other major disasters, with the federal government paying, on average, 82 per cent of eligible recovery costs. That arrangement does little to encourage provinces and municipalities to reduce their exposure to future damages.
“Many governments permit developments in high-risk areas and choose not to purchase insurance for public infrastructure because they can rely on the DFAA program to pay for the majority of damage costs in the event of a disaster,” the report found.
“Municipalities may be disincentivized to provide adequate risk information to property owners or developers, especially for high-yield taxable properties such as those on waterfronts, because the financial responsibility for damages falls to the DFAA when insurance is not available – which is currently the case for areas at the highest risk of flooding.”
The panel recommended creating a national standard spelling out responsibilities for public and private stakeholders, along with new tracking mechanisms intended to hold each party accountable for improving resilience. A resilience rating system should be introduced to help governments understand current levels of preparedness, along with a new funding program to help pay for improvements. Flood maps could be published online, identifying areas for which DFAA funding will be restricted.
“They’re trying to future-proof DFAA, by trying to make a bit more of a pro-active mechanism, and investing in things like adaptation and risk mitigation, rather than relying on DFAA as the insurance of last resort,” said Jason Thistlethwaite, a professor in the University of Waterloo’s environment department.
Dr. Thistlethwaite added that provinces “historically have been quite reluctant” to reform the DFAA. “Is there enough political will to convince the provinces that this is something they ought to be interested in?” The panel suggested increased cost-sharing or special grants for climate adaptation, he noted, which might induce them to co-operate.
The DFAA program has been struck by massive claims in recent years, the largest being for extensive flooding in British Columbia in November, 2021. Of the nearly $7-billion paid out by the DFAA since its inception in 1970, 70 per cent occurred in the past decade. The program has more than $5.4-billion in outstanding liabilities – and costs are expected to continue rising.
In late 2021, Prime Minister Justin Trudeau ordered Minister of Emergency Preparedness Bill Blair to review the DFAA. Mr. Blair convened the eight-member panel last year to provide recommendations. It was chaired by Rebecca Denlinger, a former B.C. deputy minister for emergency management.
Ralph Pentland worked for the federal government for 30 years, and managed the DFAA between 1979 and 1991. He said many of the panel’s recommendations echo procedures and programs that existed decades ago. The federal government used to map and designate floodplains, for example, and prohibited DFAA payments for structures built subsequently.
“We used to have national standards for flood-damage reduction,” he added. “And we had agreements with all provinces and applied these to things like mapping, diking, forecasting, planning and other things. We had these things 30-40 years ago, but they got lost along the way.”
Though released Monday, the report dates from November. In its budget released late last month, the federal government proposed to spend $48.1-million over five years to identify high-risk flood areas and modernize the DFAA. It promised another $85.1-million over five years to create a water agency based in Winnipeg. And it announced a new Crown corporation that would provide flood insurance to households in areas at high risk of flooding who can’t get private insurance.
Echoing previous studies, the panel found that disasters are becoming more frequent and severe as the population becomes increasingly urbanized, and as infrastructure ages. Temperatures in Canada are rising at double the global rate, increasing the risk of heat waves, wildfires, flooding and droughts.
“Historically, Canada has been spared the type of devastation caused by disasters such as Hurricane Katrina or the Great Earthquake and Tsunami in Japan, tragedies that have claimed thousands of lives and cost tens of billions of dollars in damages,” the report noted.
“But Canada’s luck is changing, and without significant investments in disaster risk reduction, it may only be a matter of time until we experience similar events.”