As communities in Atlantic Canada begin their recovery from the widespread damage caused by post-tropical storm Fiona, the federal government says it will step in to support the many people whose homes and businesses were uninsured against coastal flooding, or uninsurable.
Emergency Preparedness Minister Bill Blair told a news conference on Sunday that the government will co-ordinate with provinces to deliver financial aid to uninsured people in Atlantic Canada through a disaster funding program. Dominic LeBlanc, Minister of Intergovernmental Affairs, said he has already spoken to Newfoundland and Labrador’s Premier about the potentially large amount of uninsured storm damage.
“Through the provinces, they determine an assessment of what needs to be done and they’ll make requests to us,” Mr. Blair said. “We have undertaken to them that we’ll work very closely and very quickly.”
But insurance experts say such assistance for uninsured people is only a stopgap measure, and that it’s important that Ottawa make government-backed flood insurance available as soon as possible.
Mr. Blair made reference to this on Sunday, saying a storm like Fiona is a reminder of how important it is to provide Canadians with access to flood insurance.
“It deepens our resolve to get the job done,” he said, adding that last year’s flooding in British Columbia was another instance when such insurance was needed.
Craig Stewart, vice-president of climate change and federal issues for the Insurance Bureau of Canada, said insurance for coastal storm surges or seawater damage is almost entirely unavailable to Canadians, because insurance companies perceive the risk of such disasters as being extremely high. He said there are one or two providers that have started offering coastal flood insurance in the past year, but that the protection is limited to lower-risk homes. Most insurers, he added, are unable to do the modelling required to develop prices for flood coverage.
The Canadian government has for years been working with the insurance industry to offer government-backed flood insurance to all Canadians, regardless of their levels of risk. But Mr. Stewart said that program’s rollout is not expected for at least another year.
Mr. Stewart said federal funding for flood insurance would effectively backstop insurance providers, to ensure they don’t lose large amounts of money when powerful storms happen.
He said such insurance will grow more important as climate change makes weather events like Fiona more common, because the current system of federal assistance for uninsurable properties means that taxpayers are subsidizing other people’s risky homes. Making owners of homes in flood plains pay insurance premiums commensurate with that risk would shift much of the financial burden onto them.
“The problem is the current situation encourages people to live in high-risk areas where they probably shouldn’t, and it’s not sustainable given the amount of damage we’re seeing,” he said. “Essentially what it is is free insurance.”
Last month, the Insurance Bureau of Canada estimated that 800,000 homeowners live in locations that are so risky that private flood insurance is either unaffordable or unavailable.
Mr. Stewart stressed that people with homes in increasingly disaster-prone locations will need to reconsider where they live.
“They need to be aware of the risk and they need to take steps to protect themselves,” he said.
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