Canadian Underwriter

The fire truck that can’t get any water

June 21, 2017   by Devin Pacholik

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White Bear’s only fire truck is kept in a garage with very little equipment

White Bear’s only fire truck is kept in a garage with very little equipment

A sign on the side of the single road cutting through White Bear First Nations reads, “Respect all life,” with a flying eagle painted above the red font. Across from the sign is White Bear’s lake and a shoreline resort community nestled within a patchwork of brush. Only minutes from the cottages are the Bear Claw Casino and Hotel and a golf course, which features fine sand imported from Revelstoke, B.C. And just beyond White Bear Lake Resort amenities, residents live in crumbling houses without fire services on the southern Saskatchewan reserve.

The resort is the community’s main source of employment. And while oil and gas development royalties and lease-ready land bolster the band council’s coffers, Chief Brian Standingready says they still can’t afford fire services. When property burns down on White Bear, his first priority is to ensure his community members are safe. Later, he prepares for yet another increase of the band council’s insurance premiums. As with more than 600 First Nation reserves in Canada, the risks are higher and the budgets tighter, compared to non-reserve communities.

“The number of fires we’ve had in our housing has pretty well doubled our insurance,” he explains. “We’ve had to change insurers because of the high cost. What we received from insurance didn’t pay for replacement—probably only half.”

White Bear has a single fire truck. The GMC pickup saw action on the morning I visited the reserve. Dry thatch and high April winds fueled a brush fire and had been extinguished by volunteers and the reserve’s lone full-time firefighter.

“We have a bit of fire equipment, but nothing that’s going to fight any major kind of fire,” says Standingready. “The truck is mainly for grass fires and things like that and to prevent it from spreading.” The White Bear fire hall, a garage secured with a single padlock, has no respirators suited for running into burning buildings.

White Bear’s fire truck cost $10,000—paid for by a grant from Enbridge’s Safe Community program. But there are no water lines running through the residential areas to feed the truck’s hoses. And Standingready says his band council can’t afford the cost of fire services offered by the town of Carlyle, which is about 16 kilometres south. “By the time they get out here, it’s about half an hour to hour before they arrive. The times they’ve been out here, the house is already gone.”

White Bear does, however, have two other fire service contracts with Carlyle. Town councillor Darcy Moore says one agreement is up for renewal and covers White Bear’s casino. The other deal, which Moore says costs roughly $10,000 a year, is for the White Bear Lake Resort, which includes 800 cottages, the community’s school and an assisted living facility.

That assisted living facility cost between $2 million to $3 million from the band’s trust fund to build, and it once housed up to 24 disabled and senior residents for about two years. The bright, shiny dining room is now empty, the rooms unoccupied, and the facility abandoned. Standingready says the non-profit facility operated on revenue generated from resident fees but was shut down about six years ago.

While this empty building has fire service coverage, if a resident on White Bear calls 911 when their house is burning down, dispatchers will not send help—Carlyle’s fire agreement for White Bear’s on-reserve population ended in 2012. Moore says the Carlyle fire council has sent “numerous letters” encouraging White Bear to renew the contract. “They decided to look elsewhere.” In the case of a life-or-death call, “I’m sure we would go and worry about the dollars later.”

On average since 2010, Indigenous and Northern Affairs Canada has provided $15,800 a year for the reserve’s fire protection services, money that’s used “at the First Nation’s discretion.” Standingready says that allocation is spent on basic maintenance and firefighting, but it’s not enough to improve infrastructure or risk management. And about 900 people live in some 200 houses on the reserve, with three generations of people often packed together in homes that are falling apart.

In fact, the reserve is still working on repairing flood damage from back in 2011, which spread black mould “up to the ceilings” of many basements. Standingready believes the mould is causing ongoing respiratory health problems in children and older residents.

Yet White Bear’s looming housing crisis and lack of fire services is emblematic of many Canadian reserves. Ontario’s Eabametoong First Nation lost its 6000-square-foot community hall to a fire last month. Senior advisor Andy Yesno says they don’t have a trained fire brigade, and volunteers often battle blazes without protective equipment.

He says that like many northern communities, Eabametoong has difficulty regulating building standards. “When the homes are built brand new, they usually come with one smoke detector and one fire extinguisher, but we don’t have any safety standards or laws here that apply so they aren’t really enforceable.”

Late last month, Prime Minister Justin Trudeau met Saskatchewan’s File Hills Qu’Appelle Tribal Council chiefs in Fort Qu’Appelle. Part of his trip was to promote Ottawa’s planned $8.4-billion investment in First Nations over the next five years. Some of that cash injection includes housing development.

During a visit to Oskayak High School in Saskatoon the day after his stop in Fort Qu’Appelle, Trudeau was asked by one student, “Why do you allow the First People of this land to endure and live in Third World conditions?” Trudeau gave a lengthy response about “renewing the relationship” with indigenous people, but conceded, “The federal government can’t fix this on our own.”

A bit of stigma

Here then is the atmosphere in which Christopher Pegg has set up shop. Pegg is the president of British Columbia’s Coast Salish Insurance and Risk Management Solutions. The aboriginal insurance sector, he says, requires “understanding,” but many insurance companies won’t deal in the market. “I think it’s because there are higher losses, less risk management and a bit of stigma that there’s not as much caring in the properties. I haven’t found that to be the case.”

His business has adapted to anticipate differences in concepts like ownership on reserves. “The whole concept of ownership versus common ground is different. To own the house, you need to get a certificate of possession from the First Nation [band council.] Some of the First Nations don’t do that.” He says families may pass their houses from generation to generation, changing hands without formal documentation.

In other cases, many band councils apply for housing development funding through the Canada Mortgage and Housing Corporation’s On-Reserve Non-Profit Housing Program, also called Section 95 housing. Property loans funded under this program are insured under the National Housing Act. Bill Montour, president of the Aboriginal Housing Protective Association, says this arrangement can be problematic for residents.

“You have to have insurance while there’s government money in [a Section 95 house,]” says Montour. “But as soon as that mortgage is paid off, the government doesn’t care anymore, so [some band councils] won’t put insurance on these houses because there are so many other needs in the community—education, health and social needs.”

Montour’s association provides training services for reserves to improve housing and risk management. His clients apply for federal funding through the Aboriginal Skills and Employment Training Strategy program.

But there are few insurance providers, he says, specializing in reserve products. Aon Reed Stenhouse, HUB International, and Aboriginal Insurance Services are among the major providers, with Allied World Insurance and Lloyd’s of London doing the only underwriting for Canadian reserve housing. “A lot of insurance companies and brokers are looking for a premium and that’s it. They’re not helping the communities deal with risk management.”

According to statements from First Commercial Brokers, Aboriginal Insurance Services, and Coast Salish Insurance, the most common losses on reserves involve fire and water damage. I approached all three, as well as HUB and Aon, to gauge their profitability in the reserve sector. None of these companies would disclose their loss ratios.

“Housing insurance [is sometimes] lumped together with commercial insurance,” says Montour. “And because of the high cost of premiums for housing, that drives up the insurance for commercial [ventures,] like forestry, mining, power—the businesses that First Nations run.”

People living on reserves, of course, can buy property coverage like anyone else through a broker, and in some instances, large band councils purchase insurance products in bulk to cover reserve properties.

“If it’s a smaller community, it tends to be that the band council is involved in the day-to-day decisions that are made,” says Pegg. “If you have, say, Cowichan Tribes—which is the largest Salish Coast band in B.C.— you have a finance department. You have an HR department. You’re running a large organization.” And commercial lines generally work the same way on reserve as they do off.

Policy development on reserves sometimes requires in-person assessments beyond simply taking photos of and inspecting property. About seven years ago, Pegg visited Amerind Risk Management in Albuquerque, New Mexico. The company is 100 percent owned by tribal policyholders. As Pegg learned, the company’s approach is more hands-on. “They photograph the houses, visit the houses, do safety workshops, and improve the houses and improve the risk management. I liked that model so much I brought it back.”

Aboriginal Insurance Services out of Hamilton is another firm taking a hands-on approach. President Randy Sherwin says its reserve portfolio insures about 16,000 houses, and he has plans for a new venture called Kanonhsa Indemnities, set to formally launch in 2017. The concept for Kanonhsa—the Mohawk word for “lodge” or “house”—is an insurance pool, in which clients are also company owners and share a percentage of the profits. It’s a similar model to Albuquerque’s Amerind Risk Management. “We expect the 2016 profit sharing to be around 10 percent return. We will be paying dividends in the same manner as any other corporation.”

For now, Sherwin would only disclose Kanonhsa has “157 clients and 64 members,” but it’s confirmed that the Aboriginal Housing Protective Association is involved. “Reserve communities don’t have an opportunity to capitalize on [Canada’s housing market.] They don’t have all the tools that are available off-reserve.” So he hopes Kanonhsa’s shared profits will work as an incentive to improve reserve infrastructure.

Brenda Garneau from Regina works with First Commercial Brokers and also recognizes the need for unique programs and custom products for reserves. She says 12 years of working in the sector has taught her brokers require “intimate knowledge” of reserve infrastructure and risks. For instance, she said property construction can vary widely in a single community, with some buildings built from the ground up next to mobile homes in flood-prone areas.

Identifying as a non-status Métis person, Garneau also recommends cultural awareness for professionals wanting to enter the industry. “You just have to be confident and knowledgeable that there are specific groups of people—whether it’s Sioux, Nakoda, Cree. Be mindful of their cultures and history… It’s the people that make it worthwhile and the relationships you establish.”

Copyright © 2016 Transcontinental Media G.P. This article first appeared in the June/July 2016 edition of Canadian Insurance Top Broker magazine

This story was originally published by Canadian Insurance Top Broker.