IBC urges action on a national flood insurance program

The federal government announced a second advanced payment of over $550 million for British Columbia through the Disaster Financial Assistance Arrangements (DFAA) program, to assist with recovery costs associated with the 2021 BC Floods.

Following the announcement, Craig Stewart, vice-president, climate change and federal issues, Insurance Bureau of Canada (IBC), issued the following statement:

“On behalf of Canada’s property and casualty insurers, IBC applauds Minister Bill Blair and the federal government on this funding announcement. The floods that hit southern B.C. in November 2021 remain the most costly severe weather event in the province’s history and this funding will help support families, businesses and communities rebuild and recover following this devastating event.

The trend is clear: Canada is experiencing more and bigger floods, wildfires and other natural disasters – all influenced by climate change – costing billions of dollars and putting lives at risk. While DFAA may provide vital support to those unable to obtain financial protection for the risks they face, it is by no means a replacement for insurance.

Canada’s greatest severe-weather risk is flood and, because of that, the insurance industry alone is unable to provide affordable coverage to those living in areas of highest flood risk. Instead, a public-private partnership is required at the national level, building on the approach taken in other industrialized nations. This event is yet another example of the urgency with which we must work to accomplish this.

The federal government is committed to long-term policy actions to address the causes of climate change, but climate resilience must also be a priority. Canada’s insurers have provided the federal government with a proposal to create a national flood insurance program. This program would ensure Canadians living in high-risk areas for flooding would have access to the enhanced financial protection that insurance provides, and allow for a speedier and more holistic recovery process.

Budget 2023 presents an opportunity to both protect Canadians from the impacts of climate change, while also reducing the unplanned disaster costs borne by the federal government, such as the funding announced today. The time to act is now.”