Homeowners living in Canada's highest flood-risk areas could be required to pay at least $350 annually for flood insurance or risk losing access to federal disaster relief under a long-delayed national insurance program now under review by Ottawa.Internal records obtained through Access to Information show the Department of Finance has been working on the proposal since 2020, with officials considering a federally backed insurance system designed to shift more responsibility for flood damage onto homeowners in high-risk areas.Blacklock's Reporter said according to a 2025 briefing titled Working Group On Flood Insurance: Record Of Discussion, the government intends to use the cost of overland flood insurance premiums to determine whether a property qualifies as high risk."The Department of Public Safety clarified that high risk will be determined using the premium for overland flood coverage as a proxy," the memo states. "The premium threshold is currently envisioned as being set at $350."Under the proposal, homeowners would no longer qualify for federal Disaster Financial Assistance Arrangements if flood insurance is available for their property."A home will be ineligible for federal Disaster Financial Assistance Arrangements once flood insurance is deemed to be available," the memo states. Federal disaster assistance would remain available only where flood insurance cannot be obtained, such as when a homeowner cannot secure primary insurance coverage.Municipalities and provincial governments would retain authority over whether flood-damaged homes could be rebuilt.The records show Ottawa envisions a two-part program consisting of a reinsurance product administered through a Canada Mortgage and Housing Corporation subsidiary alongside a subsidy program intended to make premiums more affordable. The documents do not estimate the cost of those subsidies.Optional overland flood insurance first became available in Canada in 2015, but uptake has remained low. Since 2019, the insurance industry has urged Ottawa to establish a federally managed insurance pool for homeowners in flood-prone regions.Finance Department records acknowledge the existing system places a disproportionate burden on taxpayers who do not live in flood-prone areas.A 2023 memo states that flood risk is heavily concentrated among a relatively small number of properties, estimating that 10% of homeowners account for 90% of Canada's flood risk..Another internal document notes the country's 15,000 riskiest residential buildings represent just 0.1% of all homes but account for 6.5% of Canada's total flood risk. The riskiest 0.5% of properties account for 21.5% of the country's flood exposure.Internal correspondence also shows growing frustration within the insurance industry over the pace of the federal review."The flood insurance file has been a difficult one to advance and our members are frustrated that we are not yet over the finish line," an Insurance Bureau of Canada executive wrote to Finance Department officials.In a 2024 report, the Insurance Bureau of Canada estimated a national high-risk flood insurance program would cost less than $100 million annually while addressing an average of $988 million in flood losses each year.The bureau projected approximately 75% of eligible homeowners would enroll in the program within five years. It also noted insured flood losses have averaged about $280 million annually over the past five years.
