Federal budget proposes low-cost flood insurance program
The plan is to provide $31.7 million to Public Safety Canada and the Canada Mortgage and Housing Corporation over three years, starting in 2023-24, which would include offering reinsurance through a federal Crown corporation and a separate insurance subsidy program.
The government said it will work with provinces and territories to develop and implement the program, as well as the requirements for its long-term fiscal sustainability, including cost-sharing and risk mitigation. The Department of Finance and Public Safety Canada will also engage with the insurance industry to develop solutions to earthquake insurance and other climate-related market challenges.
Another proposal is to raise awareness of flood risks by providing $15.3 million for Public Safety Canada to create a publicly accessible online portal where Canadians can access information on their exposure to flooding.
In addition to these plans, the budget proposes to modernize the Disaster Financial Assistance Arrangements program, which covers up to 90% of provincial and territorial response and recovery costs after a disaster.
As noted in the federal budget report, the government will provide $48.1 million over five years and $3.1 million ongoing to Public Safety Canada to identify high-risk flood areas and implement a modernized program that incentivizes mitigation efforts.
The industry responds
The insurance industry has lauded the government’s move to boost climate resilience in Canada, with the Insurance Bureau of Canada noting that the country is now joining “the UK, US and most other G7 countries in establishing a government-backed insurance program.”
“Today’s funding from the federal government will help ensure all homeowners, regardless of their risk, have access to affordable flood insurance,” said Celyeste Power, IBC president & CEO, in a statement released Tuesday. “This is a major step forward, and critical to protecting homeowners across the country, even those at high risk of flooding.”
Climate Proof Canada, a national coalition comprising insurance industry representatives, disaster relief organizations, municipalities, Indigenous organizations, environmental NGOs, and university-based thought leaders, also welcomed the government’s budget announcement.
“Now more than ever, there needs to be a focused effort on the part of the federal government to finalize and fund implementation of the National Adaptation Strategy, such that we make tangible progress toward the targets set out, and better prepare for the present and growing effects of climate change through building a more disaster-resilient country,” a statement from the coalition read.
What are your thoughts on the government’s plans to boost climate resilience in Canada? Feel free to comment below.
