Insurance Bureau CEO calls for national disaster strategy as wildfires rage
Canada's approach to dealing with fires, floods, earthquakes 'undeveloped,' CEO says
The head of the Insurance Bureau of Canada is renewing his call for a national strategy to handle the financial impacts of natural disasters in light of the massive wildfire menacing the Fort McMurray, Alta., area.
- Canadian disaster relief to cost $900M a year over next 5 years, new PBO report says
- Fort McMurray wildfire could trigger spike in insurance rates
CEO Don Forgeron said for a developed country, Canada's approach to natural disasters such as fires, floods and earthquakes is "undeveloped."
"We are one of the best countries in the world at responding to disasters, there's no question about that. We are not one of the best when it comes to preparing, either physically or financially," he told CBC's Ottawa Morning.
For starters, Forgeron would like to see the government budget more for natural disasters, including wildfires.
Earlier this year the parliamentary budget officer said the federal disaster fund can expect to pay out $902 million a year over the next five years to combat storms, hurricanes and flood, well above past averages.
"There's got to be a better way forward. There's got to be a better way than making it up after the disaster," he said.
Push for physical preparedness
Forgeron's ideal national strategy would include other provisions such as building code requirements. For example, some municipalities in Alberta have passed bylaws mandating fire-retardant shingles on roofs.
Forgeron has previously called on the government to subsidize an insurance program for flood-prone residential properties.
"I do represent an industry of worriers. That's what we do, We worry by nature. But we worry based on the science and based on the math," he said.
Forgeron said his demand for a national strategy has been labeled as a money grab and fear mongering, but he said the recent devastation proves conditions are changing.
"While there is a need to reduce greenhouse gases and take a look at the long term picture, I think it would be irresponsible if we didn't try and adapt and adjust to this new reality. The fire in Fort McMurray just with an exclamation point tells us again that there's so much more we need to do as a country," he said.
Forgeron will be making his case for a national strategy on Wednesday in Ottawa at the Fairmont Chateau Laurier, a talk that was planned before the wildfire broke out in Alberta earlier this month.
The Bank of Montreal has predicted the devastating Alberta wildfire could cost insurers as much as $9 billion while Moody's Canada Inc. has estimated a total around $5 billion. Either way, it will likely be the costliest natural disaster in Canadian history.
According to the Insurance Bureau of Canada, the floods in southern Alberta in 2013 hold the current record for insured losses, costing the insurance industry $1.8 billion.
Jason Mercer, an analyst at Moody's, said anyone who lives near a dry forest or somewhere particularly vulnerable to wildfire risks could see their rates spike.
With files from CBC's Ottawa Morning