Flooding is the most common and costly occurring natural hazard in Canada, causing over $1 billion in direct damage to households, property and infrastructure and devastating thousands of Canadians each year.
While flood risk has long been on the docket for Canadian legislators and the insurance industry, it was brought further to the fore in the 2020 Speech from the Throne in which the Government of Canada announced it will invest in reducing the impact of climate-related disasters, like floods and wildfires. In November, the federal government held true to that statement by launching a new interdisciplinary ‘Task Force on Flood Insurance and Relocation’ in an effort to “create a more resilient and sustainable approach” to flooding in Canada.
The task force, which is comprised of representatives from federal, provincial, and territorial governments, and the insurance industry, will assess the viability of creating a low-cost National High Risk Residential Flood Insurance Program to protect homeowners who are at high risk of flooding and don’t have adequate insurance protection. It will also consider options for potential relocation for residents of areas at the highest risk of recurrent flooding.
Approximately 1.8 million households in Canada are estimated to be at high risk of flooding, according to the Canadian Institute for Climate Choices (CICC), amounting to 10% of all households nationwide. Despite the availability of flood insurance in Canada growing annually, homeowners in high-risk flood areas still struggle to access coverage at an affordable rate. This is something the task force hopes to address.
“Every Canadian deserves a safe and affordable place to call home. Flooding threatens our homes and our livelihood,” said the Honourable Ahmed Hussen, Minister of Families, Children and Social Development. “This task force will explore the best ways to mitigate flood risks for many Canadians and guide us in developing future housing plans. We must protect our homes as sanctuaries and ensure our communities remain safe.”
The federal government has also made a commitment to ensure that broad Indigenous perspectives are included in flood risk management in Canada. Indigenous Services Canada announced it will work with First Nations partners on a dedicated Steering Committee on First Nations Home Flood Insurance Needs to examine the unique context of flood risk on reserves.
“First Nations communities are among the most susceptible to seasonal flooding and its devastating impact,” said the Honourable Marc Miller, Minister of Indigenous Services. “Any flood risk planning needs to take their needs, priorities and circumstances into account and we must engage with First Nations-partners from the start to be successful.
“Furthermore, First Nations communities are 18 times more likely to be evacuated than off-reserve communities during emergencies such as floods. In general, response and recovery efforts for on-reserve communities can be more challenging compared to off-reserve communities. This is why we are creating a steering committee that will ultimately provide First Nations-led solutions regarding flood insurance and related needs.”
The flood risk Task Force and Steering Committee have been welcomed by many in the Canadian insurance industry as steps in the right direction. Shawna Peddle, program director of Co-operators Community Funds at The Co-operators, recently hosted a panel discussion on ‘The Future of Flooding’ at CatIQ Connect in which she said she was “happy and grateful” for the federal government’s announcement.
“Flooding is the most common and expensive natural hazard in Canada; it causes over a billion dollars in damage a year,” said Peddle. “As our climate warms, urbanization ramps up, and our infrastructure ages, understanding the risk of property and health posed by flooding events is becoming more of a challenge than ever before. But that understanding remains key to planning a resilient and sustainable future for Canadian communities.
“The importance of data, of collaboration, of partnerships between the private sector, between governments and residents as well, for effective and coordinated risk assessment, and visualization for communication and decision making has never been greater.”
The problem with flood risk in Canada is that it’s only going to get worse as the climate changes. The CICC published a report in December called ‘Tip of the Iceberg: Navigating the Known and Unknown Costs of Climate Change for Canada,’ in which it revealed that weather-related disasters like floods, storms and wildfires are getting more frequent, more extreme and more expensive—already adding up to billions of dollars each year.
The CICC recommends significantly increasing public funding for adaptation measures that improve resilience, and co-ordinating climate change adaptation efforts across provincial, territorial, Indigenous and municipal governments to scale up adaptation. It also encourages public and private entities to incorporate greater transparency about the risks of a changing climate in decision making, to drive resilient investments and adaptation solutions.
“One lesson Canada must learn from the global pandemic is that we need to get much better at foreseeing and acting on risk,” Kathy Bardswick, president, Canadian Institute for Climate Choices. “As climate change accelerates, no individual, province or sector will be immune. Now more than ever, we cannot afford to ignore massive future costs—especially those that we have the power to manage. We can limit our risk exposure and make better decisions by investing in resilience and mandating climate risk disclosure.”
