Federal officials have pledged to support cleanup efforts in flood-ravaged Alberta, but the government’s track record suggests that years will pass before it cuts a cheque.
The funding arrangement for disaster response essentially leaves everything in the hands of the province, which eventually seeks reimbursement from Ottawa. That’s why, as federal officials have demurred on what the cost may be, Alberta Premier Alison Redford was forced to immediately concede she won’t balance the budget as quickly as planned.
Conversely, Ottawa may not have to pay up for years. After flooding in Alberta in 2005, the federal government paid $129-million in costs, but the majority of that cash was finally delivered only in April of 2013. Floods hit Alberta and Saskatchewan in 2010, but the provinces haven’t yet made a claim, much less received a cheque.
“We expect that it will take some time, and there’s a couple reasons for that. One is, frankly, the track record of the federal government on these issues,” Ms. Redford said, later adding: “It doesn’t mean they’re not going to pay, but they certainly don’t pay upfront. We understand that and we’re prepared to deal with that.”
Those timelines suggest this disaster won’t derail federal plans to balance the budget by 2015-2016. Instead, it will loom for years as a hidden liability.
“The federal government is committed to doing whatever it can to assist Albertans in rebuilding their communities,” Public Safety Minister Vic Toews said in a statement on Wednesday, when he toured flood zones with Ted Menzies, the Minister of State for Finance, and Jason Kenney, Immigration Minister.
It’s Mr. Toews’ department that handles the Disaster Financial Assistance Arrangements, which repay provinces. In this flood, the federal government will be on the hook for 90 per cent of all eligible uninsured damage above roughly $18-million. Since the DFAA’s inception in 1970, Ottawa has paid out $2.3-billion.
Costs are ultimately shared by the insurance sector, which tends to handle commercial claims, and the federal and provincial governments. But each disaster is different, said Steve Kee, a spokesperson for the Insurance Bureau of Canada. He’s hopeful the sector can begin to estimate damages within weeks.
Meanwhile, the federal government has poured money into the Alberta region for infrastructure development. Flood mitigation projects are eligible, but municipalities – including Calgary – instead usually have pursued new roads, cultural centres and public transit programs, rather than flood-proofing projects.
“Across the country, the focus on disaster preparedness has not been made the priority by most communities and most provinces,” said Paul Kovacs, executive director of the Institute for Catastrophic Loss Reduction, a not-for-profit research institute founded by the insurance sector and affiliated with the University of Western Ontario.
Manitoba has done well in preparing for flooding, while the Vancouver region has spent money getting ready for an earthquake. Others have fallen behind. “Alberta’s certainly not at the top [of the list],” Mr. Kovacs said.
Rebuilding work continues, as the Trans-Canada Highway was reopened Wednesday and more than 80 public health inspectors agreed to come to the province from B.C., Saskatchewan and Manitoba.
The City of Calgary also confirmed the death of an 83-year-old woman who drowned in her flooded apartment, bringing the death toll to five. The Town of High River, Alta., remains on an evacuation order. Officials hope they can begin letting residents back in within “days, not weeks.”
By Thursday, the province will begin handing out pre-loaded debit cards, but only to evacuated High River residents at first. The funds will come out of the province’s initial pledge of $1-billion for flood relief.