Taxpayers could face more than $1 billion a year in compensation for uninsured property losses from flooding, according to a report from the Budget Office. Blacklock's Reporter says the federal government has considered a national program since 2018 that would shift some of the cost to property owners in flood-prone areas.“Flooding is projected to remain the costliest type of disaster with projected federal costs of $1.2 billion per year on average over 2025 to 2034,” the report, Projecting The Cost Of The Disaster Financial Assistance Arrangements Program, said. Wildfires and storms are expected to cost $325 million and $258 million per year on average, respectively.The Disaster Financial Assistance Arrangements Program, enacted in 1970, reimburses provinces and territories for uninsured losses. .Analysts noted that federal costs have climbed sharply and are projected to rise from $881 million per year on average over 2010 to 2024 to $1.8 billion per year on average from 2025 to 2034. Floods are expected to remain the most expensive natural disaster.Public Safety said last November it planned to introduce a mandatory insurance program for at-risk property owners “by 2025,” but no legislation has yet been tabled.A national flood insurance plan is considered urgent, as about 10% of all residential properties nationwide face overland flooding, according to the Insurance Bureau of Canada. Successive federal reports have warned that ad hoc disaster relief is unfair to taxpayers. .A 2022 task force recommended homeowners on flood plains provide proof of insurance or pay up to $900 for coverage, under threat of losing disaster aid.“In high risk areas homeowners either get effectively free insurance subsidized by taxpayers through disaster financial assistance when provided or are forced to manage the financial risk on their own,” the report said. A separate 2022 study by the Council of Canadian Academies suggested a negative-option insurance system, where homeowners are automatically enrolled but can opt out, noting that people are less likely to decline coverage than to actively enroll.Canada remains an outlier among advanced economies, the report said, offering limited nationalized flood insurance and leaving taxpayers exposed to rising disaster costs.
