Tech & Science

Why $31.7M for national flood insurance in Budget 2023 is ‘just the start’

The $31.7 million set in Budget 2023 to create a National Flood Insurance Program is just the first step, experts say, and Ottawa will need to act quickly to implement the program as the danger increases. I have.

“Of course, that’s just the beginning. The funding they allocated is to get the program up and running, basically designing it and getting it ready,” said Ryan Ness, director of adaptation research at the Canadian Climate Institute. has said.

“But to actually deliver it will require more time and more financial investment to make it happen.”

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Experts have long called for the creation of a nationwide flood insurance program to offset the costs of facing the more severe weather Canadians face as a result of climate change.

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As part of the 2023 budget, the federal government is allocating $31.7 million over three years to Public Safety Canada and the Canadian Mortgage Authority to work with Treasury to create a low-cost flood insurance program.

Its goal is to protect households at high risk of flooding and without access to adequate and affordable insurance.

The work will begin in 2023-2024 and will include providing reinsurance (insurance for insurance companies) through a separate insurance subsidy program for federal entities and Canadians, the government said. .

It is not clear when the program will be available to Canadians, but we are working with relevant stakeholders on this and other evolving climate-related insurance challenges.

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Manitoba seeks changes to flood insurance: ‘No longer a hut in the bush’

“We expect this to be completed in two years instead of three. Stewart said: ).

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“But really, this is a call to action for the provinces. They can’t just sit back and wait. It needs to be strengthened to ensure that people are protected, not now.”

Hurricane Fiona, which hit Canada’s Atlantic last year, showed that maintaining the status quo for insurance against floods and disasters was not viable for the country’s future, Intergovernmental Affairs Minister Dominique Leblanc said at the time.

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The Hurricane said the insured losses were at least $800 million. Canadian Insurance Agency. Severe weather in 2022 ultimately resulted in insured losses of $3.1 billion.

Flood and storm surge damage is not covered by most standard insurance plans in Canada, and adding them to an existing plan can be expensive for the most at-risk individuals.

This is often due to the impacts of climate change, with ongoing work across the country to update floodplain maps exposing homes that were not previously at significant risk to new hazards. because it is located in a zone where

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Main report The federal government warned in August 2022 that the cost of providing flood insurance “will grow faster than inflation and gross domestic product in the future.”

The report is expected to guide ongoing work on developing a national flood insurance program, which was part of a mandate task presented to Minister of Emergency Preparedness Bill Blair. .

“There’s still a little work to be done,” Blair said Wednesday morning when asked by reporters about the proposed budget.

“The country recognizes that it is very important to better protect people during floods, so when the timing is right, we will work as quickly as possible.”

Flooded homes on the Draper Road subdivision of Fort McMurray are shown Tuesday, April 28, 2020.

Greg Harinda/Canadian Press

Floods cause about $2.9 billion in damage to homes and infrastructure each year, according to the government, and homeowners typically bear about 75% of uninsured losses. LeBlanc said at the time that insurers would become increasingly reluctant to offer flood insurance as costs rose, but leaving Canadians alone was not an option.

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“The intention is to keep the program evergreen, so that as climate change increases risk, people who are probably less at risk than they are today will be caught by the program and have access to flood insurance in the future,” Stewart said. Told.

“The overall intention is to align the government provision with the private sector provision. So, essentially, either the government or the industry mandates to provide flood insurance to households wherever they are. and the program is designed to continue to do so regardless of future risk levels.”

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In addition to the National Flood Insurance Program, the government on Tuesday agreed to provide Canadian Public Safety with $15.3 million over three years to create a publicly accessible online portal through which Canadians can access information about flood risk. I suggested.

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“It’s going to be very important,” Blair said. “Most importantly, Canadians understand the risks and are able to take the necessary steps to protect themselves, their families and property.”

It also provided $48.1 million over five years and $3.1 million on an ongoing basis to Public Safety Canada to implement an updated Disaster Financial Assistance Plan that identifies high-risk flood areas and encourages mitigation efforts.

Work on these additional programs is expected to begin in 2023-2024, but it is not clear when the portal will be available to Canadians. Asked Wednesday if it could be up and running by the end of the year, Blair said, “There’s a strong sense of urgency about this,” though he didn’t give a clear answer.

“Flood insurance and financial assistance alone cannot solve our problem of increased flood risk under climate change. It’s a good stopgap to ensure that those in need get the help they need to rebuild,” Ness said.

“But as a country, as a society, we need to start moving away from these high-risk areas over time,” he added.

“This should be a temporary solution that will be phased out as we develop, move neighborhoods and move communities away from at-risk areas.”

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— Using Amanda Connolly’s files

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