Industry hails the feds’ updated disaster assistance program

Building back better is now a key feature in the federal government’s updated Disaster Financial Assistance Arrangements (DFAA) program, released Wednesday.

The updated DFAA, expected to take effect Apr. 1, 2025, “will ensure increased, timely, and flexible federal funding is available to support provincial and territorial partners to build back better in the aftermath of disasters and plan ahead for future disasters,” Harjit S. Sajjan, minister of emergency preparedness, said of the changes. “Together, we can rebuild stronger and safer communities.”

The federal government’s DFAA program provides financial assistance to provincial and territorial governments for response and recovery costs from large-scale disasters caused by natural hazards. The DFAA does not provide funding directly to Canadians impacted by disasters; provinces and territories deliver this assistance.

The changes will take effect regardless of whether or not Parliament is sitting.

Paul Kovacs, founder and executive director of the Institute for Catastrophic Loss Reduction (ICLR), applauded the government’s initiative.

“This is a historic moment for disaster management in Canada,” said Kovacs. “For decades, we’ve seen communities rebuild after disasters only to remain vulnerable to the next event…

“The historic approach to rebuild ‘as before’ has been replaced to ‘build back better with added protection to reduce the risk of another loss.'”

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Established by the Canadian property and casualty insurance industry, the ICLR is a centre for multi-disciplinary disaster prevention research and communication. It has long advocated for a disaster management and recovery approach emphasizing resilience.

Now, with Canada fresh off its worst season of natural catastrophes ever (at $8.5 billion in insured losses in 2024), the federal government has heeded the industry’s call to protect communities against future disasters occurring.

 

What the updated DFAA says

Specifically, as of Apr. 1, 2025, the new DFAA offers 15% extra federal funding to provinces and territories to fund rebuilding for increased resilience beyond current building codes and standards.

Also, the feds have increased post-disaster mitigation funding (up to 25%) targeted to high-risk areas. Eligible mitigation efforts include new construction, nature-based solutions, hybrid infrastructure, buyouts and relocation programs.

A new Disaster Risk Reduction (DRR) incentive provides provinces and territories with additional ‘bonus’ funds on each claim for defined, high-impact risk mitigation measures carried out pre-disaster.

Under the DFAA’s funding formula, for example, the federal government provides assistance to the provinces if their disaster recovery costs exceed a threshold of $3.75 per capita (as of 2024) of the provincial/territorial population.

Provinces or territories that undertake activities determined by Public Safety Canada to reduce disaster risk in advance of a disaster may be eligible for up to 40% of their eligible threshold expenses in the event of an eligible disaster.

Also, the federal government says it may restrict access to DFAA assistance in high-risk areas if no efforts are made to mitigate risk in these regions.

“The assistance provided by the DFAA is not intended to contribute to the creation of new disaster risk or delayed action in reducing existing disaster risk,” the new DFAA states. “Therefore, the eligibility of expenses incurred for assets with major damage in high-risk areas (as designated and/or identified by municipal, provincial/territorial, and/or federal authorities) may be restricted where the assets were not appropriately mitigated prior to the eligible disaster.”

Kovacs noted it is up to the provinces and territories to take advantage of the incentives offered by the new DFAA.

“The federal government has shown real leadership with these changes,” Kovacs commented. “Now, it’s time for provincial and municipal governments to step up and ensure these improvements are implemented on the ground.”

 

Feature image courtesy of iStock.com/RyanJLane