Canadian flag with a yellow background

Expensive and Now Frequent Once-a-Century Floods Shifting Conversation

May 8, 2019

As parts of Ontario, Quebec, and New Brunswick suffer from historic floods after recently cleaning up from once-in-a-century floods, political leaders are no longer taking the “we will rebuild at all costs” default position – a potential major shift in the climate adaptation conversation.

While touring flooding in Constance Bay, Ontario Premier Doug Ford said of the people in the region “we will be here to support them 1,000 per cent,” but also said he would willing to discuss relocation from flood-prone areas. In Quebec, Premier Francois Legault said his province will not continue to spend taxpayer dollars on supporting rebuilds in flood-prone areas. Meanwhile, Prime Minister Justin Trudeau said with major and frequent flooding due to climate change, we need to talk about “how we build back better and where we build back.” Trudeau’s public safety minister Ralph Goodale was blunter in his assessment, “if people ignore the knowledge base and deliberately rebuild in danger zones, they are going to have to assume their own responsibility for the cost burden.”

As costs mount, Quebec takes action

Public Safety Minister Ralph Goodale said the federal government’s disaster support program has paid out more in the last six years than it did in the previous 40 years. Since 2009, insurance companies paid out on average $1 billion per year in claims, up from their $400 million average during the 1990s. This is a big jump in costs attributed to extreme weather due to climate change, says Craig Stewart, vice-president of federal affairs at the Insurance Bureau of Canada.

After the 2017 floods, Quebec hired more people to process flood claims (over 6,000 flood claims), funded cities with $20.5 million to improve flood maps, and paid-out over $150 million (and still counting) to afflicted homeowners. The Quebec government also capped compensation at $100,000 per home rebuild and offers up to $200,000 for abandoning homes in flood-prone areas. According to a CBC, a similar program that successfully relocated flood victims in New Jersey after Superstorm Sandy did not cap compensation and paid homeowners market value.

Canada is not prepared

In the U.S., you can plug in your address and find out if your house has a flood risk, but not in Canada. Our flood maps are out of date and not digitized because of government cutbacks and municipalities not wanting to disrupt local development, reports the Globe and Mail. Three out of four homeowners who live in high-risk flood zones incorrectly reported that their home was not in a vulnerable area, according to a University of Waterloo study.

As overland flooding costs continue to increase, “fewer than 10% of eligible households take advantage of subsidy programs designed to increase uptake of lot-level urban flood protection measures,” according to a 2017 report by the Institute of Catastrophic Loss Reduction (co-authored by Mantle CEO Laura Zizzo).

Credit rating agencies have begun to look at flood risk, raising the possibility of a downgrading of credit ratings and default on loans by flood-prone municipalities, according to a report by the Intact Centre of Climate Adaptation.

Litigation threat increasing

Recently, we have begun to see an increase in class action lawsuits following extreme weather events. Residents who have suffered damage from major flooding are suing municipalities and provinces to recover costs.

After severe rainfall in 2002, a major flood in Stratford left many with sewage in their basement. Plaintiffs sued the city, claiming negligence in the design, construction, operation and maintenance of the sewer system. The case was settled in 2010, eight years after the flood, for $7.7 million. These costs came after the municipality spent $1.3 million in emergency relief and made other costly improvements to the system.

After a major 2012 flood in Thunder Bay, a group of homeowners sued the city for alleged negligence in the repair, inspection and maintenance of the city’s water pollution control plant, as well as lack of diligent operation and supervision at the time of the flood. The approximately $300 million suit is on-going.

In 2016, the Muskoka property owners sued the Ministry of Natural Resources and Forestry for allegedly failing to adequately control water levels of nearby rivers. The flooding caused by high water levels and drifting ice during spring runoff damaged docks, boat houses and properties. The $900 million suit is also on-going.

As costs in disaster recovery and successful litigation after major floods continue to mount, expect to hear more politicians talking about compensation and relocation, and moving away from promises to rebuild at all costs. This may be a watershed moment in the climate change adaptation conversation.