Canadian Underwriter

The change to disaster mitigation funding that IBC is looking for

April 10, 2019   by Greg Meckbach

Print this page Share

The insurance industry needs to ensure its own flood risk maps are widely available and the federal government needs to make it easier to spend money on disaster mitigation projects, says Insurance Bureau of Canada CEO Don Forgeron.

The federal Disaster Mitigation and Adaptation Fund (to which the government earmarked $2 billion over 10 years in 2017) has had some success stories, Forgeron said during Swiss Re’s Canadian Annual Outlook Breakfast.

But in some cases, provinces and municipalities are having trouble coming up with matching funds, Forgeron said during his presentation at the breakfast, held April 2 in downtown Toronto.

Don Forgeron, president and CEO of Insurance Bureau of Canada

DMAF is intended to help recipients better manage risks associated with natural hazards, such as floods, wildfires and droughts. Organizations like provinces, municipalities and indigenous communities can apply for federal funding but each project must have minimum of $20 million in eligible expenditures.

That threshold is too high, Forgeron said April 2 at the Swiss Re breakfast.

“More realistic expectations from the federal government could help to put shovels in the ground,” said Forgeron.

“Part of the problem right now is that infrastructure  money that has been set aside by the federal government isn’t getting out the door quickly enough.”

During his presentation, Forgeron said government can do four things to mitigate natural disaster risk: target priority infrastructure investment, educate consumers on flood risk, improve land use planning and building codes and restore natural wet lands.

To address flood risk, the industry can improve the way it gathers and shares flood risk data, said Forgeron.

“If we are going to encourage government to make smarter planning decisions and if we are going to educate consumers about the potential risks, we need to be working with the best available mapping data and we need to ensure this data is accessible and widely available.”

Those maps need to be updated, he added.

“We must incorporate provincial and municipal data and account for lowering of risk once flood defences are put in place,” said Forgeron.

“Today the data from risk modelling companies is good, but we really need to take it to the next level, including higher resolution maps and richer data sets. More information means better risk assessments. This means insurers are better able to price risk in specific areas.”

The federal Disaster Mitigation and Adaptation Fund is overseen by Infrastructure Canada. Organizations apply for federal funding and if successful, the federal government will contribute up to 40% for municipalities and not-for profit organizations in provinces, up to 50% for provinces, up to 75% for projects in one of the three territories and up to 75% for indigenous recipients.

One recently-announced example of a project funded in part by the Disaster Mitigation and Adaptation Fund is in Sarnia, Ont. The federal government announced March 29 it will contribute more than $10.4 million towards construction and expansion of wastewater, storm water, and water systems for Sarnia. Those projects are intended to reduce basement flooding in Sarnia and decrease overflow into the St. Clair River, protecting properties  downstream.