(OTTAWA) The federal government committed $31.7 million over three years in its budget on Tuesday to eventually create a low-cost insurance program against flooding, which is becoming more common due to climate change.
The insurance industry was calling for a government-backed program to help protect households at high risk of flooding and without access to adequate and affordable insurance in the event of misfortune.
The government is therefore asking the Department of Public Safety and the Canada Mortgage and Housing Corporation to work with the Department of Finance to establish a program to “provide reinsurance through a federal Crown corporation and a separate program of insurance subsidies”.
The Insurance Bureau of Canada (IBC) has called this federal initiative a “great step forward.” Its president and CEO, Celyeste Power, said that in Canada, flooding is the biggest risk from climate change, with more than 1.5 million homes considered “highly exposed”.
Ms. Power is pleased that the funding provided by Ottawa will help ensure that all homeowners, regardless of their risk, have access to affordable flood insurance.
Experts have indeed pointed out that this storm has highlighted gaps in home insurance, which normally does not cover damage caused by such “storm surges”.
The new flood insurance program would take into account damage caused by storm surges as well as riverine flooding and surface urban flooding, explained BAC’s Ms Power. She noted that Canada joins the United Kingdom, the United States and many other G7 countries.
“IBC looks forward to working closely with the federal government and the provinces and territories to establish the country’s first national flood insurance program over the next 24 months,” said Ms. Power.
In the budget unveiled Tuesday, the government states that “given the extraordinary nature of natural disasters, it is difficult to obtain insurance against them, which leaves some Canadians financially vulnerable”.
“The government will consult with provinces and territories on the development and implementation of the program, as well as requirements for its long-term financial sustainability, including cost sharing and risk mitigation,” reads one in the federal budget.
“At the same time, the Ministry of Finance and Public Safety will launch consultations with the sector on possible solutions for insurance against earthquakes and other climate-related risks which continue to present new challenges in the insurance market. ‘assurance. »
The federal government is also proposing to pay Public Safety $48.1 million over five years, and $3.1 million per year thereafter, for the identification of high-risk flood zones and “the implementation of a modernized flood prevention program. ‘disaster financial assistance arrangements, which would boost mitigation efforts’.
These “Disaster Financial Assistance Arrangements” cover the bulk of response and recovery costs incurred by provinces and territories. “As climate change makes natural disasters more frequent, there is a need to modernize the program to place greater emphasis on prevention and resilience,” the government said in the budget tabled Tuesday.
