March 23, 2016 by Canadian Underwriter
The Insurance Bureau of Canada (IBC) has applauded the federal government’s commitment to addressing climate change in its first federal budget.
“The budget shows a clear and strong commitment to fighting climate change,” IBC president and CEO Don Forgeron said in a statement on Tuesday, the same day the budget was released. “IBC is committed to working with this government to strengthen communities facing increasingly severe weather events stemming from climate change.”
The federal government announced $75 million in new funding for local governments to address climate change, to be delivered by the Federation of Canadian Municipalities. This investment will support municipality-led projects to identify and implement greenhouse gas reduction opportunities. It will also support the assessment of local climate risks, and the integration of these impacts into asset management plans.
Budget 2016 shows a commitment to building climate resilient communities in Canada, “highlighted by the investment in helping grow Canada’s clean economy while helping communities prepare for severe weather events,” the IBC statement said. The budget proposes to invest $5 billion over the next five years in “infrastructure that protects communities and supports Canada’s ongoing transition to a clean growth economy.”
One particular example of funding to build climate resilient communities is a province of Manitoba project to regulate lake levels and provide flood protection to individuals, businesses and communities around Lake Manitoba and Lake St. Martin. The federal government said in the budget that it will provide $248 million for the Lake Manitoba and Lake St. Martin Outlet Channels Project. “Without enhanced water control infrastructure, there is a high risk of recurring flood damage, similar to that experienced in 2011,” the budget document said.
The federal government will also provide $212 million to upgrade the Lions Gate Wastewater Treatment Plant to make it resilient to climate events. The facility provides primary treatment of wastewater for residents of the District of West Vancouver, the City of North Vancouver and the District of North Vancouver, and is threatened by risks posed by extreme weather and climate change, such as a projected rise in sea levels, the federal government said.
The IBC noted that the financial costs to the federal government due to natural disasters, which are linked to climate change, are far greater than previously estimated, as highlighted in a recent report from the Parliamentary Budget Officer (PBO). In late February, the PBO estimated that the Disaster Financial Assistance Arrangements program can expect claims of $229 million per year due to hurricanes, convective storms and winter storms and $673 million for floods, for a total of $902 million, between the years of 2016/17 to 2021/22.
“That is why IBC continues to call for a collaborative national flood program that will provide a framework for the financial management of flood risk, with shared responsibilities between the insurance industry, all tiers of government and consumers,” the statement said.
“Now is the time for action,” Forgeron concluded. “Climate change is a real and present danger costing governments – and Canadians – hundreds of millions of dollars every year. Because Canada is the only G7 country without a national flood program, Canadians, our government and the insurance industry are dangerously exposed to severe weather risks.”