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Don Forgeron is president and CEO of Insurance Bureau of Canada.

Lost in all the talk and analysis of the most recent federal budget was a landmark investment of $2-billion for disaster mitigation funding – the largest infusion of dollars dedicated to disaster mitigation in Canada's history. The investment is designed to reduce the almost $9-billion spent by the federal government in unbudgeted disaster relief expenditures from 2005 projected through 2020.

Many commentators completely missed the significance of this investment.

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However, Canada's property and casualty insurance industry noticed. We noticed because we have been encouraging governments to shift their investments toward disaster mitigation, particularly flood mitigation, for several years now.

In the aftermath of the Fort McMurray fires, in the face of accelerating and severe climate-driven events, and in an era of few new spending announcements and dozens of competing priorities, this redirection of federal tax dollars was a remarkable and positive shift in importance.

Finance Minister Bill Morneau announced tangible measures to identify at-risk federal infrastructure, elevate building codes and invest billions in mitigating climate risk across this country. He announced a new Centre for Climate Services, which should help align the array of fragmented climate data, starting with flood models. And most important, he signalled these funds would be invested in a way that creates jobs while simultaneously increasing this country's resiliency to climate change.

Climate change has a huge economic effect on our country. In the first six years of this decade, federal disaster relief spending rose to an average of more than $600-million a year. In 2013, federal spending hit a record $1.4-billion, largely because of the flooding events in Ontario and Alberta.

The human toll of climate change is just as significant. We often take our safe, comfortable lives for granted. But in recent years, catastrophic weather events have taken lives and caused untold hardship for many Canadians. According to Catastrophe Indices and Quantification Inc., insured damage for 2016 topped $4.9-billion, smashing the previous annual record of $3.2-billion set in 2013.

Last summer's biggest natural disaster, the Fort McMurray wildfires, resulted in approximately $3.7-billion in insured damage – more than twice the amount of the previous costliest, single natural disaster in Canada. The annual economic cost of natural disasters around the world has increased fivefold since the 1980s. From an average of $25-billion a year in the 1980s, it increased to an average of $130-billion a year in the 2000s.

Here at home, federal disaster relief spending rose from an average of $40-million a year in the 1970s to more than $1-billion a year projected this decade. This is the cavalcade of increasing liability that Mr. Morneau is trying to arrest.

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Canada must shift from a culture of disaster recovery to a culture of disaster risk reduction. This new focus must resonate with individuals and engage all levels of government, as well as businesses and institutions. The federal government's leadership should be congratulated. By investing in strong infrastructure and resiliency now, it is helping to mitigate the economic and physical impacts of future severe weather events. These funds will have a positive impact on job creation while simultaneously creating safer, more resilient communities for all Canadians.

In the area of severe weather, we often pay attention when things go wrong. When the budget came down though, we didn't pay enough attention when the federal government got things right.

Beata Caranci, chief economist at TD Bank says the 2017 federal budget did not have large initiatives and is a very safe budget in terms of spending
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