Canadian disaster relief to cost over $900M annually, report
Friday, February 26, 2016, 12:39 PM - Due to the increasing number of extreme weather events, a new report shows the federal Disaster Financial Assistance Arrangement (DFAA) can expect to dish out over $900 million annually over the next five years to Canadian provinces.
The report released by Parliamentary Budget Officer (PBO) Jean-Denis Frechette on Thursday, shows the DFAA's yearly transfers to the provinces have been much higher than its annual $100 million appropriation. The PBO estimates on average $229 million a year will be spent to deal with hurricanes, convective storms and winter storms. In addition, it is expected flooding will cost $673 million annually, which represents 75 per cent of DFAA's weather expenditures.
The high value is partly due to the lack of flood insurance in Canada, as well as complications with floodplain regulations on the Prairies, the report highlights.
"One last consideration is interprovincial coordination of flood management. This currently does not exist in Canada, even through it has been shown to be effective at reducing damages in other countries," the report says. "This is particularly important in the Prairie Provinces where rivers such as the Saskatchewan and its tributaries span all three provinces."
The report mentions climate change as a likely factor behind the intensity of floods on the Prairies.
"The warming in the Arctic has been associated with persistent weather systems in the mid-latitudes as well as extreme weather events. Consistent with this, multiple-day rain events have significantly increased in the Prairie provinces and in the Rockies," the report highlights.
The DFAA program was created in 1970 to reimburse provinces and individuals for expenses and damages resulting from disasters, natural or man-made. Transfers to provinces can take up to eight years after the disaster, the report notes.
To determine annual costs the PBO used data from various sources, including the Insurance Bureau of Canada, DFAA, Swiss Re and the Risk Management Solutions Inc.
The report cites several large weather events that cost millions of dollars including, heavy rains in Saskatchewan in June 2014, which is estimated to run $160 million, the Toronto ice storm of December 2013, anticipated to cost $120 million and the southern Alberta and southeastern B.C. flood of June 2013, at $1.3 billion.
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