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Changes to cost sharing could hit Manitoba hard

Federal government changes DFAA, increases amount provinces must pay to trigger for federal disaster relief payouts

Floods and other disasters are about to become even more expensive for Manitobans.

That’s the inevitable outcome of a federal government change to how it contributes to disaster financial assistance, say provincial and municipal leaders.

Canada’s Minister of Public Safety and Emergency Preparedness Steven Blaney announced changes last month to federal Disaster Financial Assistance Arrangements (DFAA). As of Feb. 1, the province’s threshold for eligibility for federal disaster assistance has risen significantly.

That means Manitobans are on the hook for more of the cost of a disaster before the rest of Canada steps in to help, said Premier Greg Selinger.

“Under the new rules, a disaster in Manitoba would have to reach $3.9 million before federal cost sharing would begin. The previous limit was $1.3 million,” he said in a news release.

“The 90-10 cost-sharing formula, where the federal government pays 90 per cent of the costs, won’t kick in until Manitoba’s costs reach almost $20 million,” he added.

“The previous threshold was $6.5 million. The impact to rural and northern communities in particular will be significant.”

Selinger said if these changes had been in effect back to 2000 they would have cost the province an additional $54.9 million.

This is the first time the federal government has updated DFAA since 1970. It is part of Ottawa’s plans to roll out its new National Disaster Mitigation Program on April 1. That program will stream more money into flood prevention, and it also lays the groundwork for introducing a new residential flood insurance program in Canada, a federal news release stated.

“We are shifting from a reactive model to one that allows us to better identify, plan for, and prevent flood risks and the costs to Canadians that come with them,” said Blaney in the same release.

Municipal leaders are nervous that this is going to mean higher costs to them too, said Joe Masi, executive director of the Association of Manitoba Municipalities.

Municipalities’ share has been capped at $5 per person in the event there are damages from flooding. That’s been much better than having to pay a percentage of disaster costs, which can be highly variable, he added.

“The way the formula has worked over the years has been very good,” he said.

But this new federal-provincial formula could lead to municipalities having to contribute more upfront costs too, he said.

“Even though this formula deals with how the provincial and federal governments cost share, our fear is that this will potentially then lead to a download of some of these costs down to the municipalities,” Masi said.

What impact that could have is only speculative right now, he added.

“That’s the big unknown,” he said. “All we know at this point is the federal-provincial formula has been changed. But we believe this will affect Manitoba communities in a very negative way.”

Due to frequent flooding, Manitoba has become one of the largest users of disaster financial relief in Canada.

Between 2000 and 2014, Manitoba enacted Disaster Financial Assistance programs 49 times, representing a cumulative total of $1.067 billion in disaster expenditure by the province.

The federal Economic Action Plan 2014 committed Ottawa to establish the National Disaster Mitigation Program and consult on changes to the DFAA formula, as well as to look for options for a national approach to residential flood insurance.

Nationally, federal payouts for disasters across Canada have been rising dramatically since 1970. Between 1970 and 1995, DFAA payments averaged $10 million a year. After 1995 to 2011 that amount grew to $118 million a year and between 2012 and 2013 it was $280 million.

Blaney said the upcoming National Mitigation Program aims to reduce these costs, which have been primarily flood related, to all levels of government.

“Through the National Disaster Mitigation Program, the Government of Canada will provide provinces and territories funding to help share the costs of flood mitigation measures, improving resiliency against floods, which currently account for the majority of payments through DFAA,” he said.

About the author

Reporter

Lorraine Stevenson is a reporter and photographer for the Manitoba Co-operator with 25 years experience writing news and features. She was previously a reporter with the Farmers Independent Weekly and has also written for community newspapers in Winnipeg and Manitoba's Interlake.

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