Federal financial response to extreme weather events

If a weather-related event becomes extreme enough, and satisfies specific criteria, the Government of Canada may offer financial assistance to those affected. 

The federal financial response is administered by Public Safety Canada through Disaster Financial Assistance Arrangements (DFAAs), which can be established for individual events, similar to an Albertan DRP

When a DFAA is set up for an extreme weather event, federal funding is transferred directly to the government of the province/territory affected but not to individual citizens, which is unlike an Albertan DRP. 

It is then up to each province to use the DFAA funds according to their programs. The transfer of funds can take place over a period of up to eight years following the establishment of the DFAA[1]. In Alberta, the AEMA would receive the DFAA funding and allocate it to extreme weather event response/recovery.

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Figure 5: DFAAs can be used to compensate for the emergency response to extreme weather events. Photo courtesy of the Alberta Justice and Solicitor General[2] 

DFAA Criteria

The Government of Canada provides information regarding the criteria for DFAAs. The primary goal of a DFAA is to assist provinces/territories with expenses including evacuation operations, restoring public works, and restoring “essential property of individuals, small businesses, and farmsteads”[3]

Like an Albertan DRP, DFAAs will not provide funding to cover insurable losses, losses for large businesses, or losses that may be covered under another program. For example, federal funding is not likely to be used to repair automobiles from hail damage, since insurance for this is widely available. Similarly, crop production is not covered by DFAAs. 

DFAA Eligibility Based on Per Capita Spend by Province/Territory

Eligibility for DFAAs is also based on the per capita amount a province or territory has spent to recover from the event, according to a funding formula used by Public Safety Canada. The formula is updated regularly to account for inflation and changes to government policy. 

In 2017, the formula specifies a DFAA will not be used to pay for any provincial/territorial spending which amounts to less than $3.07 per capita. This means an extreme weather event in Alberta would have to cost the Government of Alberta, through a DRP, almost $13.2 million before a federal DFAA could be applied for[4].

If successfully applied for, a DFAA will be used to provide funding on a sliding scale, based on how much the province/territory is spending. This scale is designed to provide greater assistance to provinces/territories for events that are more extreme.

The table below outlines the scale and indicates how much the Government of Alberta and The Government of Canada would pay for an example extreme weather event in Alberta. 

Using a hypothetical event in Alberta costing $100 million dollars, it would be expected the Government of Canada would provide approximately $64 million dollars of funding through a DFAA, while the Government of Alberta would be responsible for approximately $36 million.

Hypothetical event costing Alberta $100 million to recover from
Per capita spend threshold Per capita spend range % covered by DFAA Example Alberta spend (Million) Example DFAA funding (Million)
First $3.07  $0 - $3.07 0% $13.18 $0.00
Next $6.15  $3.07 - $9.22 50% $13.20 $13.20
Next $6.15  $9.22 - $15.37 75% $6.60 $19.80
 Remainder   > $15.37 90% $3.40 $30.63
TOTAL: $36.38 $63.62

 An example of an event that elicited a DFAA is the 2013 Southern Alberta flood, after which Alberta was promised $2.6 billion from a federal DFAA[5]. There will also be DFAA funding available for the 2017 flooding in Ontario and Quebec. Note that, although both these provinces faced a similar extreme weather event, they will receive funding under separate DFAAs.

 

 

[1] Office of the Parliamentary Budget Officer. 2016. Estimate of the Average Annual Cost for Disaster Financial Assistance Arrangements due to Weather Events. Retrieved from http://www.pbo-dpb.gc.ca/web/default/files/Documents/Reports/2016/DFAA/DFAA_EN.pdf

[2] Retrieved from https://www.flickr.com/photos/albertasolgen/9208531021 

[3] Government of Canada. 2017. Disaster Financial Assistance Arrangements (DFAA). Retrieved from https://www.publicsafety.gc.ca/cnt/mrgnc-mngmnt/rcvr-dsstrs/dsstr-fnncl-ssstnc-rrngmnts/index-en.aspx 

[4] Government of Alberta. 2017. Economic Dashboard – Population. Retrieved from http://economicdashboard.alberta.ca/Population 

[5] Government of Alberta. 2014. Alberta receives federal financial support for June 2013 floods. Retrieved from https://www.alberta.ca/release.cfm?xID=36076CDBF2076-C9F9-91E1-CF951B9ACD0E06ED