The federal government has allocated $15 million in the 2025-26 fiscal year to implement a national flood insurance program, which is part of a broader plan to address flood risks and provide proper mitigation measures. Emergency Preparedness Minister Harjit Sajjan emphasized the importance of supporting homeowners who may face significant insurance costs due to changing flood risks. The government is also working with provinces and territories to produce updated flood mapping to identify high-risk areas and determine ways to subsidize insurance policies and offer low-cost flood insurance within the next 12 months.
The program will be administered through a subsidiary of the Canada Mortgage and Housing Corporation (CMHC), with over 1.5 million homeowners at high risk of flooding expected to benefit from the National Flood Insurance Program once it is launched. The Insurance Bureau of Canada praised the government’s commitment, stating that it is a crucial step in protecting homeowners from the financial risks of climate change. The goal is to integrate the national flood insurance program with regular home insurance policies offered by standard providers.
A task force was established in November 2022 to begin the development of the insurance program, consisting of provincial and territorial officials, representatives from the insurance industry, and other stakeholders. The task force’s 2022 report highlighted the annual flood insurance risk at $2.9 billion, with the majority of costs concentrated in high-risk homes. The eligibility requirements for the program are expected to discourage construction in flood plains while incentivizing the protection of existing homes in those areas. Climate change poses challenges in predicting floods, with the government earmarking $6.9 million over the next five years to enhance the Meteorological Service of Canada’s early warning system for floods and storm surges.
The government’s national flood insurance program aims to address the increasing threat of flooding due to climate change and provide homeowners with affordable insurance options. Through collaboration with provinces, territories, and the insurance industry, the program will offer support to homeowners at high risk of flooding and ensure that mitigation measures are taken to prevent future losses. By integrating flood insurance within standard home insurance policies, the government hopes to make coverage more accessible and comprehensive for Canadians living in flood-prone areas.
The allocation of funds for the national flood insurance program is part of a larger effort to improve flood mapping, incentivize protection of existing homes in high-risk areas, and enhance early warning systems for floods and storm surges. The government’s proactive approach to addressing flood risks reflects a commitment to safeguarding homeowners from the financial impacts of climate change. By working collaboratively with stakeholders and investing in preparedness measures, the government is taking steps to mitigate the growing threat of flooding across the country and ensure the resilience of communities in the face of environmental challenges.
