Underinsured homeowners are costing the federal government a fortune: this was the message from the Parliamentary Budget Office.
In a report to Parliament, the PBO, which reviews federal spending, zeroed in on flooding in the Prairie Provinces as the largest expense of a disaster financial assistance program, and indicated the issue was down to both a lack of flood insurance, and a lack of co-ordination and co-operation between the provinces.
The report, which covered the ten years from 2005 to 2014, singled out flood relief as the biggest line item of the federal Disaster Financial Assistance Arrangements plan, saying it costs the federal treasury $673 million annually and represents 75 per cent of DFAA’s weather-related expenditures.
“Manitoba, Saskatchewan, and Alberta have accounted for 82 per cent of all DFAA weather event costs, almost all of which are a result of flooding, despite accounting for only 18% of Canada’s population,” said parliamentary budget officer, Jean-Denis Frechette.
Driving the cost up is a lack of private homeowner flood insurance in Canada, Frechette added, as well as the absence of incentives for flood damage mitigation measures.
The next five years are likely to result in a bill for the federal government of an average of $229 million per year due to hurricanes and storms and $673 million for floods.
