Helping communities invest in catastrophe loss prevention is a “smart use of funds,” according to Mary Kelly, a professor in finance and insurance at Wilfrid Laurier University in Waterloo, Ontario.

Kelly views the federal government's changes to the Disaster Financial Assistance Arrangements (DFAA) to be positive news.

In an email to the Insurance Portal, she pointed out that DFAA funds are available to communities through provincial governments. She states that typically, there are two funding buckets – one for individuals, small businesses, farms, and charitable organizations – and another for community recovery. 

“Before this expanded scope, communities could rebuild essential infrastructure, but only to the pre-disaster condition. This is where we might see the most significant impact. Communities can now use funds to build to better standards,” she added. 

Benefit-cost ratio  

Kelly cites findings in the Natural Hazard Mitigation Saves: 2019 Report from Washington's National Institute of Building Sciences (NIBS).

“The benefit-cost ratio for pre-disaster mitigation ranges from 4:1 to 11:1,” she explains. As early as the first published study on natural hazard mitigation in 2005, NIBS found that mitigation-based construction methods saved $4 in damages for every $1 invested. In its 2020 report, the NIBS found that adopting the latest building code requirements could save up to $11 per $1 invested. 

In the past, the most common use of DFAA-funded program funds by those with private insurance was to pay living expenses beyond the 30 days that are typically covered by property and casualty policies, Kelly points out.

The programs cover primary perils such as floods when private insurance is not accessible, and secondary perils that arise from catastrophic losses such as earthquakes, tsunamis, mudslides or rockslides. “If insurance is 'reasonably available' (not well defined) and the property owner chooses not to purchase insurance, they would not be eligible for DFA funds,” says Mary Kelly.

In Quebec, Ottawa's financial contribution following a disaster is paid through the General Financial Assistance Program Regarding Disasters. Virtually every week in the Gazette officielle du Québec, the Minister of Public Security publishes a ministerial order relating to this program.

In the Jan. 29, 2025 edition, three ministerial orders were published, relating to losses in Sept-Îles, Sherbrooke and Saint-Jérôme. On Jan. 22, six more ministerial decisions were published.

At the Minister of Public Security, spokeswoman Louise Quintin confirmed to Insurance Portal that General Financial Assistance Program Regarding Disasters is eligible for DFAA.

“In the event of a major disaster, the Minister of Public Security is responsible for consolidating the amounts disbursed by Quebec government departments and agencies in order to make a claim for reimbursement from the federal government under the DFAA, if the amount of the claims exceeds Quebec's financial contribution threshold,” she says. This threshold has been estimated at $35 million since Jan. 1, 2025. 

Most municipal expenses, such as the opening of an emergency shelter, temporary preventive measures and overtime paid to employees engaged in eligible activities, can be included in the province's claim. Each event is evaluated to determine which expenses can be included in Quebec's claim,” adds Quintin.

During the forest fires of 2023, municipalities in Northern Quebec, including Chibougamau and Lebel-sur-Quévillon, were forced to evacuate their populations. The Quebec government filed a claim with Public Safety Canada, which administers the DFAA. The claim is still under review, confirms the Minister of Public Security. 

Forest fires  

Commenting on the forest fires of 2023, which burned record areas in Canada in 2023, Professor Philippe Gachon of the Université du Québec à Montréal (UQAM) deplored the lack of assessment made by public authorities in the wake of these devastating fires. “I'm not sure that the authorities are fully aware of the scale of the changes that lie ahead.

Gachon, a professor and researcher in climatology at UQAM's geography department, made these remarks at a recent symposium organized by the Laurentian Forestry Centre, part of the Canadian Forest Service. He was presenting work aimed at improving regional modeling of forest fire risk.

“We should have had a pan-Canadian feedback commission following the 2023 fires, with all stakeholders and experts involved,” he stated. The exercise would have “enabled us to determine what was done well or poorly, what should be corrected, both in terms of tools and predictability, but also in terms of our ability to intervene”, he added. “Unfortunately, this exercise was not carried out.”

Los Angeles wildfires 

Commenting on the fires that ravaged the Los Angeles metropolitan area last month, Gachon points out that warmer temperatures and strong winds caused high levels of damage, which were exacerbated by land-use planning.

In his opinion, the fires in Canada in 2021, 2023 and 2024 “cannot be explained without taking global warming into account, and this is linked to human activities.” 

When announcing the changes to the DFAA on Jan. 29, Harjit S. Sajjan the federal Minister of Emergency Preparedness confirmed $12.6 million in assistance to the Canadian Red Cross in its fundraising efforts to help disaster victims in Alberta, particularly those affected by the Jasper fire at the end of July.

On July 28, 2024, the Government of Canada and the Government of Alberta each promised to match every dollar raised by the Red Cross from the public.