Municipalities and provinces will be further encouraged to invest in strategic disaster mitigation measures. The federal government made the announcement with new details on the modernization of the Disaster Financial Assistance Arrangements (DFAA).
Canada's Minister of Emergency Preparedness, Harjit R. Sajjan, outlined the DFAA changes, which come into force April 1, 2025, at a conference organized by the Canadian Red Cross on Jan. 29. The federal government is thus fulfilling one of the commitments made in Canada's National Adaptation Strategy.
Risk reduction through pre-disaster investment will be encouraged through an incentive measure. The modernized program will reimburse provinces and territories for activities that contribute to disaster risk mitigation.
Some examples
Disaster mitigation activities can include a wide range of projects related to structural or natural infrastructure. To be eligible, the project must offer risk reduction benefits that are superior to conventional infrastructure.
“Examples may include but are not limited to engineered riverbank or shoreline stabilization infrastructure or armouring; conveyance channels, culverts, bioswales, or stormwater retention ponds; engineered breakwaters, revetments, groynes, sills, or river training works; permanent fire breaks; permanent, engineered debris and landslide control structures, etc.,” explains the Public Safety Canada website where the new guidelines are published.
Community programs with the same risk mitigation objective may also be funded. At the community or property level, the distribution of sump pumps is one of the eligible activities.
Work can be carried out upstream or in another geographic area where they can be shown to effectively reduce risk in the disaster-affected area, it adds.
Non-structural disaster mitigation is included in funded activities, for example, buyouts and relocation, including land purchase and expropriation, property purchase, demolition or site decommissioning.
Other examples include hazard mapping, public education and risk communication, and updating municipal bylaws and land use regulations.
National strategy
The National Adaptation Strategy provides an overarching framework “to reduce the risk of climate-related disasters, improve health outcomes, protect nature and biodiversity, build and maintain resilient infrastructure, and support a strong economy and workers,” says the Canadian government.
The modernized program should ensure the rapid and efficient delivery of financial assistance to provinces and territories following a disaster. The changes announced will aim to increase support for those most affected by the impacts of major disasters.
Above all, the new rules will increase investment to mitigate the impacts of these extreme events and allow for “building back better to minimize disaster impacts on communities and the risk of future disasters,” says the federal government.
The new DFAA provides incentives for “risk reduction, pre-disaster planning, and improved hazard awareness to reduce the risks and impacts of disasters.”
Guidelines for the modernized program have been published, as have those for eligible disasters occurring before April 1, 2025. As final payments may be processed years after the disaster, the old guidelines will remain in force until such time as the old files are settled and closed.
Financial value of natural environments
Natural environments also have a financial value, and public and private organizations now have a tool for determining the impact of the ecosystem services they provide to communities, particularly in terms of mitigation.
On the same day that the federal government announced funding for disaster risk mitigation efforts, researchers at the University of Waterloo's Intact Centre on Climate Adaptation (Intact Centre) published the guide Getting Nature into Financial Reporting: Natural Asset Disclosures for Local Governments.
Edited by Joanna Eyquem, the guide drew on contributions from over 120 experts across the country. It was prepared for the Standards Council of Canada thanks to a partnership between the Natural Assets Initiative and KPMG.
The Intact Centre points out that natural assets such as wetlands, rivers, forests and coastal dunes are recognized as infrastructures that provide services of considerable value, as they absorb and store water to hinder flooding, reduce the temperature of urbanized environments during heatwaves and store carbon.
“Nature-related reporting is critical to recognize our dependencies on, and effectively manage, the financially valuable services nature provides to people. Accountants have a key role to play, and we are delighted that so many certified professionals contributed to this new guide,” says Joanna Eyquem.
Municipalities such as Toronto and Montreal now include information on natural assets in their financial reports. The absence of Canadian standards, however, means that the quality of reporting is quite variable, a shortcoming that the guide aims to address.
The guide lists nearly 160 local governments, from municipalities to regional authorities, that have defined their natural assets and assessed their quality in their financial statements. There are 60 examples in Ontario, 51 in British Columbia, but only 13 in Quebec.
It is suggested that the following metrics, recommended by experts, be disclosed:
- Natural asset types and classes: Identification of ecosystems, like forests, wetlands and coastal dunes, on which the community depends for services;
- Natural asset extent: Detailed location data and spatial extent, and ownership distinctions between government-held and external assets;
- Natural asset condition: Assessment of the ecosystem composition, structure and function;
- Ecosystem services: Metrics outlining services provided (e.g. water storage), benefits to the community, and associated dependencies;
- Financial valuation: Assignment of monetary value to services provided, as well as replacement costs.
The natural asset disclosures explored in the guide are voluntary, unaudited and based on existing guidelines. The aim is to encourage local governments to declare what they can and flesh out their disclosures over time.
“There is a place to start for every community,” says report contributor Bailey Church, and lead for Public Sector Accounting Advisory at KPMG.
“We look forward to hearing how communities are using the guide and where we can provide additional support to mainstream natural asset management,” adds Chantal Guay, CEO of the Standards Council of Canada.