Glen Hodgson, a C.D. Howe fellow-in-residence, in an open letter to “Canadian climate watchers,” argues for governments to find the political will needed to align around reasonable policies for addressing flood and fire risks.

“We need improved risk management and climate adaptation,” he writes. “A forward-looking risk management plan through comprehensive property insurance and climate adaptation would reduce the need for governments to assume open-ended climate damage risk and related costs. Without adequate flood, fire and other severe weather insurance coverage, property owners will inevitably seek government bailouts to restore the property to a livable state or pay for it to be abandoned. Some key questions need to be answered.” 

First, he asks if property insurance which covers flooding should be made mandatory. “Mandatory coverage would expand the risk pool and thus improve the capacity for effective management,” he writes. “The options for pooling flood risk have been extensively analyzed.” 

Estimated total residential flood risk is pegged at $2.9-billion a year, he adds, but only 40 to 60 per cent of Canadian homeowners currently purchase some form of flood coverage, with uptake mainly concentrated in low and medium-risk areas. “According to the task force, the mandatory offer of flood insurance by insurers is a fundamental requirement for a successful flood insurance arrangement in Canada; voluntary purchase will not produce sufficient market penetration.” 

As a first step, he also advocates for a stop to new construction in risky areas. 

“Political will is now required. The federal and provincial governments need to align around a reasonable policy. Flood risk management discussions have proceeded for years and, even with a thoughtful options paper, the issue is still not a priority,” Hodgson continues. “What will it take to finally adopt a realistic plan for extreme weather risk management? This is a question of political will and leadership, not just finding the best possible technical solution.”