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The federal government is planning to implement a national flood insurance program next year, allocating $15 million in the 2025-26 fiscal year budget. Emergency Preparedness Minister Harjit Sajjan emphasized the importance of proper mitigation measures and updated flood risk data to prevent building in high-risk flood areas. The government is working with provinces and territories to produce updated flood mapping, which will help identify properties in hard-to-insure areas. The aim is to offer low-cost flood insurance within the next 12 months through a subsidiary of the Canada Mortgage and Housing Corporation.

The National Flood Insurance Program will provide affordable insurance to over 1.5 million homeowners at high risk of flooding when launched next year. Insurance Bureau of Canada president Celyeste Power stated that this program is crucial in protecting homeowners from the financial risks of climate change. The program will be integrated with regular home insurance policies so that people can purchase coverage through standard providers. A task force involving provincial and territorial officials and representatives from the insurance industry has been working on creating the program since November 2022.

According to the task force’s 2022 report, the annual flood insurance risk is estimated at $2.9 billion, with a concentration of costs around high-risk homes. Power highlighted the need for eligibility requirements that discourage construction in flood plains and incentivize protection of existing homes in these areas. Climate change makes predicting floods challenging, and despite lower snow levels in some parts of the country, Sajjan remains concerned about flood risks in northern Ontario and south of Quebec. The budget also proposes investing $6.9 million in enhancing the Meteorological Service of Canada’s early warning system for floods and storm surges over the next five years.

The federal government’s commitment to implementing a national flood insurance program is a significant step towards protecting homeowners across the country from the impacts of climate change. The program aims to provide affordable insurance to homeowners in high-risk flood areas and prevent future construction in flood plains. By working with provinces and territories on updated flood mapping and subsidizing insurance policies, the government hopes to mitigate the financial risks associated with flooding. The integration of the program with regular home insurance policies will make it easier for people to access coverage through standard providers.

The government’s focus on flood mitigation measures, such as enhancing the Meteorological Service of Canada’s early warning system, demonstrates a proactive approach to addressing changing flood risks due to climate change. By investing in better forecasting and warning systems, the government aims to improve preparedness and response to floods and storm surges. The program’s eligibility requirements are designed to discourage building in high-risk areas and promote the protection of existing homes. Overall, the national flood insurance program represents a critical initiative to safeguard homeowners from the increasing risks of flooding and climate change in Canada.

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