Federal funding shows acknowledgement of role in disaster mitigation: IBC

Funding for disaster mitigation in the federal government’s Economic Action Plan 2014, announced earlier this year, is an acknowledgement of Ottawa’s role in helping to address the impact of severe weather, Don Forgeron, president and CEO of the Insurance Bureau of Canada (IBC), suggested during an IBC symposium in downtown Toronto Tuesday.

The Economic Action Plan 2014 proposes providing $200 million over five years, starting in 2015-2016, to establish a National Disaster Mitigation Program.

“It’s not a tremendous amount of money for our national disaster mitigation program, but it is a start, and was an acknowledgement by government that they are in the disaster mitigation business,” Forgeron said, speaking to attendees of IBC’s 18th Annual Financial Affairs Symposium.

“The disaster mitigation program was announced several years ago, but not funded, and now the government has seen fit to begin to provide funding and recognize that they have a role to play in protecting Canadians,” he added.

The federal government reports the National Disaster Mitigation Program will support investments in structural mitigation measures (such as infrastructure to control floods that can reduce the impact of severe natural disasters), with project costs being shared with provinces and territories.

Ottawa’s “vision in terms of natural catastrophes was very much reflected in the budget language, which is for a national all-hazards disaster management and mitigation strategy,” Forgeron said. Be it earthquake, flood, ice storm or some other severe weather event, he told attendees “the hazard changes across the country and I think we need to reflect that in our thinking going forward.”

With regard to residential flooding, Forgeron suggested a made-in-Canada solution is needed. That said, he added that it is also necessary “to think carefully about developments internationally, not simply importing what’s happening in other countries.”

There is a role for the insurance industry to play in these issues, including “when it relates to flood in designing a national flood insurance program that works. And a program that works not just for our industry; the program has to work for Canadians, the program has to work for governments,” he emphasized.

“We’ve seen in the other G7 countries programs that only work for one or two of those stakeholders, and not all three,” Forgeron said.

The need for the country to better prepare for and adapt to the reality that is severe weather has been among IBC’s key strategic priorities over the last couple of years, and these will continue in 2014. “The weather of 2013 certainly changed that conversation and put the issue front and centre on the public policy agenda,” he suggested.

But severe weather is hardly the only challenge. “Canada’s regulatory system is viewed by many around the world as being a great regulatory system,” Forgeron said, but the challenge is to ensure that it remains that way.

Citing a recent review of Canada’s regulatory regime by the International Monetary Fund (IMF), he said plenty of positives were identified. “But the sheer volume of regulatory initiatives, the cost to the industry, the opportunity costs, these are all things that I think we need to be mindful of,” he added.

“The challenge for us, I think, is to continue to help regulators understand how this complexity translates into the day-to-day business of running an insurance company, and that we spend as much time as possible on running that insurance company, doing the things we ought to be doing, and not spending an inordinate amount of time on regulatory matters,” Forgeron said.