A federal task force on flood insurance and relocation is considering a temporary, subsidized flood insurance program for people in high-risk areas who cannot get coverage otherwise, according to one of its members. This program would be intended to buy time for governments to put in place better flood protection measures, and to relocate people whose homes cannot be protected. Insurance Bureau of Canada's Robin Edger, who sits on the Task Force for Flood Insurance and Relocation's industry task team, said this proposed program would be similar to an existing partnership between the U.K. government and private insurers. But questions remain about what the Canadian government\u2019s exit strategy would be, who would be covered, and who would still face forced or voluntary relocation. Flooding is routinely the most expensive natural disaster in Canada. A report from the Canadian Institute for Climate Choices says overland flooding currently costs Canadians about $1.3-billion annually. That number could increase to nearly $7-billion by the middle of the century. And preliminary estimates from Catastrophe Indices and Quantification Inc. say that the recent floods in B.C. caused $450-million in insured damage, making it the most costly severe weather event in the province's history. The mandate letter for Emergency Preparedness Minister Bill Blair, pictured during a November 2021 media briefing on the B.C. floods, calls for the creation of a low-cost national flood insurance program. The Hill Times photograph by Andrew Meade The National Disaster Mitigation Program, created in 2014 under then Conservative prime minister Stephen Harper, was tasked with supporting the creation of a private market for residential flood insurance. But the most recent round of mandate letters does not mention private flood insurance. The mandate letter for Emergency Preparedness Minister Bill Blair (Scarborough Southwest, Ont.) instructs him to work with the environment minister, natural resources minister, infrastructure minister and the special representative for the Prairies to create \u201ca new low-cost national flood insurance program to protect homeowners at high risk of flooding and without adequate insurance protection.\u201d \u201cI wouldn\u2019t read too much into the wording,\u201d said Edger, when asked in an interview if this was a signal that the federal government was moving away from the idea of private flood insurance in high-risk areas. \u201cWe\u2019re heading to a public-private partnership.\u201d Edger is the national director for climate change at the Insurance Bureau of Canada, an industry association. He is one of several insurance industry representatives who sit on the industry task team for the Task Force for Flood Insurance and Relocation, which is expected to present its recommendations in spring 2022. Public Safety Canada spokesperson Nic Defalco did not comment on the possibility of a transitional insurance program, but told The Hill Times in a statement that the Task Force on Flood Insurance and Relocation has "completed an international review of high-risk flood insurance options" and started an Indigenous-led process to meet the needs of off-reserve Indigenous communities. He added that while the task force continues its work, "Canadians living in high-risk areas where flood insurance is currently unavailable, are still fully eligible under the federal Disaster Financial Assistance Arrangements." A spokesperson for Indigenous Services Canada told The Hill Times\u00a0that it has partnered with the Assembly of First Nations to examine the specific home flood insurance needs of First Nations on reserves, and that a private insurance program is one of the options still under consideration. Low-cost insurance for high-risk areas One of the primary challenges when creating a specialized flood insurance program is how to create a low-cost program for a high-risk population. At a basic level, a low-cost insurance program needs enough low-risk members within the pool to subsidize the higher-risk members. In a pool made up only of high-risk members, someone else has to provide the subsidy. \u201cThe right way to think about the creation of a high-risk flood insurance pool,\u201d said Edger, \u201cis that it's meant to be something that's put in place for a transition period.\u201d \u201cSomewhere from six to 10 per cent of homes are not insurable, in terms of flood protection, at an affordable rate,\u201d said Edger. \u201cIf you've got a home that, based on flood risk modeling, is going to be subject to flooding once every 10 years, there's no way to make that make sense.\u201d A temporary program would subsidize the cost of flood insurance for these homes in order to buy time for governments to build adaptation and mitigation measures, such as larger dikes and more robust municipal stormwater drainage systems. Infrastructure Canada\u2019s Disaster Mitigation and Adaptation Fund exists to provide federal support for these kinds of upgrades. "It\u2019s a good idea,\u201d said Beth Eden, the Green Party\u2019s deputy environment critic, in a phone interview from Victoria, B.C. \u201cBut the first step before the rollout of a low-cost national insurance program should be the need to educate people. Research across the country says only six per cent of people in flood-risk areas actually know that they\u2019re in a flood-risk area. It\u2019s one thing to put forward a program to protect homeowners, but it\u2019s also important to educate them to know that they are at risk." "There\u2019s a really low rate of insurers across Canada that actually have overland flood insurance programs,\u201d added Eden, \u201cand these are only additional programs as part of their insurance packages. So it\u2019s going to take a lot to get this out there and move forward." NDP MP Richard Cannings says any government subsidies to private insurance companies should come with a clear timeline. Photograph courtesy of Richard Cannings NDP MP Richard Cannings (South Okanagan-West Kootenay, B.C.), his party's critic for emergency preparedness, said he is open to the idea of a subsidized insurance program. But he emphasized that the government must have a clear exit strategy. \u201cIf you have a temporary insurance program where the government is putting in money to lower the risks for private insurance companies,\u201d said Cannings, \u201cit has to be tied to a timeline, where work is being done to lower that risk.\u201d Ideally, said Edger, the pool of high-risk households that need subsidized flood insurance will shrink over time. He pointed to the Flood Re program in the U.K., a partnership between the British government and private insurers that is supposed to last until 2039. \u201cThese kinds of changes don't happen overnight,\u201d said Edger. \u201cBut the idea is, they\u2019ll put the adaptation measures in place for the homes and neighbourhoods where that makes sense. They will relocate others away from areas where they just can't adapt. And then the pool of homes that are in that Flood Re program should reduce over time, between now and 2039.\u201d Who gets relocated? Cannings knows from first-hand experience that relocation programs can be divisive. The city of Grand Forks, B.C., which is in his riding, dealt with severe flooding in 2018. As part of the rebuilding process, the city council voted to buy out 62 homes in a particular neighbourhood that had been built on a floodplain. \u201cThis was a poor part of town where people were forced to leave,\u201d said Cannings. The city had, as part of its long-term planning, chosen to protect its business district. \u201cTo say there were some bad feelings there would be putting it very mildly.\u201d \u201cWe don't want to have those equity issues where the people who can least afford it end up bearing the brunt of it,\u201d added Cannings. \u201cIt\u2019s only fair to distribute these costs so that people who can afford to, pay their fair share.\u201d There is a separate committee looking into the flood insurance needs of First Nations communities, under the authority of Indigenous Services Canada. Matthew Gutsch, a department spokesperson, said this committee includes representatives from the Assembly of First Nations, several Indigenous insurance companies, mainstream insurance industry groups, and the universities of Manitoba and Waterloo. Edger said there\u2019s good reason to address First Nations flood risk with greater sensitivity, because of the history of forced relocation of First Nations communities by the Canadian government. The steering committee\u2019s focus, Gutsch noted in a statement, is on "collecting data from the insurance industry\u2019s perspective on insuring First Nations housing on reserves, including issues and challenges faced by First Nations in accessing insurance products." "This work will inform possible recommendations, to be co-developed with First Nations, on potential flood insurance options, which may include private home flood insurance,\u201d he said. The two federal committees, the Task Force on Flood Insurance and Relocation and the Steering Committee on First Nations Home Flood Insurance Needs, are scheduled to deliver their recommendations in spring 2022. \u201cIt\u2019s difficult to build a program that takes care of everyone,\u201d said Cannings. \u201cEspecially if you leave it to private insurance, because they\u2019ll look for ways to get out of clauses when they\u2019re faced with enormous payouts. Even governments create rules that exclude people unexpectedly.\u201d \u201cI don\u2019t envy the people that are trying to design these programs.\u201d firstname.lastname@example.org The Hill Times CORRECTION: This article was updated on Jan. 7, 2022, to correct the spelling of a riding name. The riding is South Okanagan-West Kootenay, B.C., not West Cootenay.