Canada One Step Closer to National Flood Insurance Program

Arthur Lofsky, Director, Government Relations and Climate Adaptation Lead, Ontario, IBC

So far in 2022, Ontario has faced its share of Canada’s severe weather events, with four major storms causing damage to homes and businesses. These storms brought flooding to many corners of the province, including the Greater Toronto Area, southern Ontario, and the northwest and eastern regions.

Current climate forecasts project that an escalation in flood events, as witnessed over the past decade, will continue. At a time when $2 billion in annual insured losses from severe weather events has become the norm, Canada must increase its resilience to residential flood risk to keep people safe and alleviate the financial hardship that inevitably follow widespread uninsured flood damage.

The good news is that we are inching closer to Canada’s first national flood insurance program.

The federal government recently released the Task Force on Flood Insurance and Relocation’s report, Adapting to Rising Flood Risk: An Analysis of Insurance Solutions for Canada. Insurance Bureau of Canada (IBC) commended the federal government for showing critical leadership in appointing the task force and guiding its work to conclusion. The report is the culmination of an unprecedented partnership between insurers and federal and provincial government officials. The Province of Ontario co-chaired the task force with British Columbia.

For a long time, Canada’s property and casualty insurers have been on the frontlines, advocating for better flood defences. IBC’s call for a National Action Plan on Flooding during the 2019 federal election led to the creation of the Task Force on Flood Insurance and Relocation in late 2020.

One of the most important aspects of the task force report for the insurance industry is the commitment to a national flood program—not just a high-risk pool. Insurers have clearly signaled that flood mapping/risk modelling, physical mitigation, improved building codes and land-use planning are all necessary parts of Canada’s response to flood risk. 

The government has already committed to producing comprehensive flood maps for the entire country. It has also committed to an online flood portal that will provide homeowners, municipalities, and provincial and territorial governments with accessible information to help guide decisions about whether to rebuild or relocate after a flood.

With the task force report, the federal government now has the fundamental research necessary to inform a national flood insurance program. IBC believes that insurers and their broker partners are well-positioned to support the government and homeowners with the best possible public-private insurance program. It also believes that insurers have the experience and infrastructure to support a quick, seamless implementation. 

As work progresses on the framework for the flood insurance program, IBC will continue to advocate for a national adaptation strategy that results in tangible short-term measures to improve Canada’s climate defense. IBC is leading the national coalition Climate Proof Canada, which is advocating for adaptation as part of the national climate plan. The coalition is supported by numerous national organizations, including the Insurance Brokers Association of Canada. 

Climate Proof Canada’s main message is that governments at all levels must act with urgency to prioritize investments that reduce the impact of these severe weather events on families and communities.

In the coming months, IBC and its Climate Adaptation Working Group look forward to being part of the industry team working with the federal government to translate the task force’s research into a program capable of offering flood insurance to the myriad Canadians who have property at high risk of flooding. A national flood insurance program could help close the insurance protection gap for the approximately 1.54 million homeowners in Canada whose properties are at such high risk of flooding that private insurance is either unavailable or unaffordable. 

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