Ottawa commits to faster, stronger disaster recovery

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In an historic step forward in Canadian disaster management policy, the federal government recently announced bold and transformative changes to the Disaster Financial Assistance Arrangements (DFAA) program. This is the most significant improvement in more than 50 years. The changes promise faster recovery after a flood, wildfire or other disaster, and stronger, more resilient communities.

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Now, “building back better” with added protection will replace “restoring to pre-disaster conditions” as the standard approach to recovery. Investments in resilience will now reduce the risk of future disaster damage, bringing savings over the long term. Research by the Institute for Catastrophic Loss Reduction shows that each dollar invested in resilience will likely prevent $5 to $10 or more in future damage — a compelling return on investment.

The federal government has provided more than $9 billion in financial assistance for disaster recovery through the DFAA program. However, rebuilding to pre-disaster conditions often perpetuated vulnerabilities, leaving those at risk before the disaster equally at risk after the recovery. Moreover, achieving full recovery often took years. The revised DFAA aims to shorten recovery timelines and break the cycle of repeated loss through increased federal funding support to add resilience in recovery.

In 2023, the federal government paid more than $1.5 billion to rebuild to pre-disaster conditions. The 2025 DFAA program now offers an additional 25 per cent to invest in risk reduction and protective measures, including relocation support and buyouts, where appropriate. Hundreds of millions of dollars will be invested to help damaged homes and infrastructure recover beyond pre-disaster conditions with protection from future risks. The federal government will cover up to 50 per cent of costs in zones of low and moderate risk, and 90 per cent in high risk zones.

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Presently, most at risk Canadian homes lack essential protections against flooding, wildfires and other hazards. DFAA reforms offer an opportunity to change this. Some municipalities are leading by example, providing incentives for basement flood protection (Toronto, Ottawa, Edmonton, London and a dozen others), wildfire resilience (Fort McMurray and others), and storm resistance (Dufferin County in Ontario and an expired program in Calgary). Revised federal assistance encourages broader adoption of financial incentives by governments of all levels.

Recovery planning is vital to accelerate a healthy rebuilding process and embed resilience into reconstruction. DFAA now includes a Disaster Risk Reduction Incentive that rewards the efforts made by provinces and territorial governments that proactively support their communities in recovery planning and mitigation. Greater investments in mitigation and planning will ensure that people return to their homes, schools and workplaces sooner.

Canadians are effective in pre-disaster response planning, and now we need to apply this strength to recovery planning. Much of an effective recovery process can be set out in advance, before a disaster strikes. Planning allows recovery funds to revitalize and enhance the community.

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In 2024, Canadians experienced $12 billion to $14 billion in preventable direct damage from disasters. The trend in rising disaster loss and damage in Canada is unsustainable and unacceptable. Insurance companies paid $3.5 billion last year to repair basement flood damage in Montreal and Toronto, $3 billion for hail damage in Calgary, and more than $1 billion because of the wildfire in Jasper. Investing in resilient homes and infrastructure is essential to break this alarming trend. DFAA modernization directly addresses this need. The federal government will spend more over the near term to support Canadians and communities that invest in protective measures, and this will result in significant savings in the long term through reduced future loss and damage.

The federal government demonstrated bold leadership with DFAA reforms. It also committed to develop a national recovery strategy. Now, it’s up to provincial, territorial and municipal governments, along with insurance companies and other stakeholders, to integrate resilience and add protection investments in recovery. Together, we can ensure that Canadians recover faster and emerge stronger, with homes, buildings and infrastructure designed to withstand future disasters.

This is a pivotal moment for disaster management in Canada — a time to embrace progress and deliver on the promise that investments in risk reduction will ensure safer, more resilient communities for all.

Paul Kovacs is founder and executive director of the Institute for Catastrophic Loss Reduction

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