Question Period Note: Disaster Financial Assistance Arrangements

Response to The Global and Mail article “System for disaster relief is overwhelmed, leaving victims to rebuild on their own”.

• The provincial and territorial governments design, develop and deliver disaster financial assistance, deciding the amounts and types of assistance that will be provided to those that have experienced losses.
• Through the Disaster Financial Assistance Arrangements (DFAA), the Government of Canada provides financial assistance to provincial and territorial governments on a reimbursement basis.
• A province or territory may request disaster financial assistance from the Government of Canada when eligible expenditures exceed an established initial threshold (based on the provincial or territorial population).
• The DFAA are intended to support the provinces and territories in providing or reinstating the necessities of life to individuals, including help to repair and restore damaged homes; re-establishing or maintaining the viability of small businesses and working farms; repairing, rebuilding and restoring public works and the essential community services to their pre-disaster capabilities; and funding mitigation measures to reduce the future vulnerability of repaired or replaced infrastructure.
• Natural disasters in Canada increase in frequency and cost. As such, a review of the DFAA program is underway. An advisory panel was established to review the complex issues associated with the DFAA and make recommendations for how the program should evolve to address the changing risk environment.
•The aim of the DFAA Review was to assess how the program has evolved and how it could be updated to ensure it continues to be a relevant, effective, and sustainable instrument in a context of rising frequency, impacts, and costs of natural disasters.
•Findings from the Review are currently being used to inform the policy development process with the aim of improving disaster outcomes and increasing the resiliency of communities and individuals to disaster risk.

In the event of a large-scale natural disaster, the Government of Canada provides financial assistance to provincial and territorial governments through the Disaster Financial Assistance Arrangements (DFAA), administered by Public Safety Canada. When response and recovery costs exceed what individual provinces or territories could reasonably be expected to bear on their own, the DFAA provides the Government of Canada with a fair and equitable means of assisting provincial and territorial governments.

Since the inception of the program in 1970, the Government of Canada has contributed over $7 billion in post-disaster assistance to help provinces and territories with the costs of response and of returning public infrastructure and personal property to pre-disaster condition.

The provincial or territorial government design, develop and deliver disaster financial assistance, deciding the amounts and types of assistance that will be provided to those that have experienced losses. The DFAA places no restrictions on provincial or territorial governments in this regard. However, the DFAA also sets out what costs will be eligible for cost-sharing with the federal government.

A province or territory may request Government of Canada disaster financial assistance when eligible expenditures exceed $3.38 per capita, effective January 1, 2022 (based on the provincial or territorial population). Eligible expenses include, but are not limited to, rescue operations, restoring public works and infrastructure to their pre-disaster condition, as well as replacing or repairing basic, essential personal property of individuals, small businesses and farmsteads.

The percentage of eligible costs reimbursed under the DFAA is determined by the cost-sharing formula clearly outlined in the arrangements and is up to 90% of eligible expenditures.

The Government of Canada may provide advance, interim and/or final payments to provincial and territorial governments as the reconstruction of major infrastructure proceeds and funds are expended under the provincial/territorial disaster assistance program. All provincial or territorial requests for advance and interim payments are subject to risk assessments and final payments are subject to federal audit to ensure that cost sharing is provided for eligible expenditures according to the DFAA guidelines.

None