|I was fortunate to be able to attend the Analysis of Changes to Alberta's Disaster Recovery Program webinar on March 25, 2021 hosted by Alberta Counsel. A number of representatives of Alberta Counsel and the Alberta Government presented during the webinar describing the changes to the DRP and explaining and exploring the impacts on Alberta municipalities, businesses and residents.|
The new Alberta Disaster Recovery Program was enacted on January 1, 2021 as a result of the Federal Government downloading disaster recovery responsibilities to the provinces. The Alberta Government was tasked with assessing risk management and the role the provincial government would play in disaster recovery. Ultimately the new Alberta Disaster Recovery Program's guiding principle was to initiate risk management at the municipal, business, and resident level starting conversations as to actions that would address and minimize risk, potentially driving development away from high risk areas.
The program provides funding for recovery from non-insurable disasters; floods, fires, tornados, etc. In recent years of the 10 disasters occurring in Canada, 6 occurred in Alberta. As the Alberta Disaster Recovery Program was being contemplated, research indicated the vast majority of municipal jurisdictions did not have a Disaster Recovery Plan. As the Alberta Disaster Recovery Program was being developed the Provincial Government elected to download some responsibility to the property owner using a 'the property owner (municipality, business, resident) should also have some skin in the game' philosophy.
The funding model of the new Alberta Disaster Recovery Program is 90:10 formula where successful applicants will receive 90% of the approved funding with the applicant being responsible for the balance. This 90:10 model applies to all applicants; municipal business and residents. While there is question about eligible properties on the municipal and business side, there are some fairly impactful directives on the residential side.
The limit for non-insurable residential claims is $500,000 on a one-time basis for each property. This one and done clause is significant in that a residential property owner with an eligible claim can only make one claim for any given property for the life of the property regardless of the amount of the claim awarded. The claim is tied to the property not the property owner. Once a claim has been awarded for a property, that property is no longer eligible for any future claim. Conceivably this could impact the ability of the owner to obtain property insurance or a mortgage (new or renegotiated) and may impact the actual property value. And since the claim is tied to the property, changes in ownership could leave new unsuspecting, ill-informed owners in dire situations. It is a liability that will require diligent scrutiny by potential property purchasers, real estate agents and legal counsels.
From a municipal point of view, the lack of identification of eligibility of roads and infrastructure weighs heavily on the shoulders of local governments. The significant costs associated with recovery of these types of municipal assets can be crippling both in magnitude and in unexpectedness. It may be that municipalities may need to think to the future recognizing the increasing frequency and magnitude of disasters and start now setting funds aside to mitigate the affects of a disaster in their communities.