Parliamentary Committee Notes: Disaster Financial Assistance Arrangements Modernization
Issue
Review and modernization of federal disaster recovery programming
Proposed Response
- The Disaster Financial Assistance Arrangements program (DFAA) plays a critical role in the response to, and recovery from, large-scale disasters caused by natural hazards in Canada.
- Public Safety Canada has recently completed a review and modernization of the DFAA, with the goal of ensuring the program remains a relevant, effective, and sustainable instrument for supporting Canadians in the context of rising frequency, impacts, and costs of disasters.
- The focus of the modernization effort was to better incentivize disaster mitigation efforts, reduce disaster risk, and improve recovery supports for disaster survivors.
- Following the work of the Expert Advisory Panel on the DFAA in 2022, Public Safety Canada collaborated extensively with provinces and territories over the past 2 years on the redesign of the program.
- The new guidelines for the DFAA were finalized and distributed to provincial and territorial officials in May 2024, and the modernized program comes into effect on April 1st, 2025. Public Safety Canada is continuing to work closely with Provinces and Territories to ensure a smooth and effective transition to the new DFAA.
- It is anticipated that the design of the new DFAA will help to reduce the long term costs and impacts of disaster on all Canadians.
Background
The Disaster Financial Assistance Arrangements program (DFAA) plays a critical role in Canada's emergency management system in the event of a large-scale natural disaster. The program provides financial assistance when response and recovery costs exceed what individual provinces and territories could reasonably be expected to bear on their own. Since the inception of the program in 1970, the Government of Canada has contributed $8.9 billion in post-disaster assistance to help provinces and territories (PTs) return to pre-disaster conditions.
PTs design and administer their own programs to assist individuals, small businesses, farms and municipalities, and may request federal financial assistance following a large-scale disaster caused by natural hazards The federal DFAA provides cost sharing of eligible PT response and recovery expenditures under these PT programs.
Comprehensive Review
The most recent review of the DFAA took place from 2020-2023 and was the most comprehensive evaluation and review of the program in its history. The review consisted of three streams: Internal research, an external expert advisory panel, and engagement with PTs.
The substantial engagement with PTs included written reports and feedback, interviews and surveys, and inviting PTs to speak directly to the Minister-appointed expert advisory panel on the DFAA. The panel published its final report Building Forward Together: Toward a more resilient Canada in April 2023.
Program Modernization
In Budget 2023, the government announced its intention to modernize the DFAA based on the review, with an emphasis on incentivizing mitigation and risk reduction. Public Safety Canada worked closely with PTs on modernizing the program. In addition to comprehensive written feedback provided by PTs on the program in 2021, significant engagement with PTs took place from spring 2023 to spring 2024 and included use of an online platform for virtual collaboration, in-person workshops with each PT, open house and special focused sessions, bilateral meetings, and several rounds of written input on draft program language.
Key changes to the modernized Program
The modernized program prioritizes funding for improving recovery outcomes, increasing resilience to disasters, and reducing future risk. Key changes to the program include:
- A shift to an objectives-based approach where the program deploys a logical framework of 5 funding streams, each guided by a policy objective, with a defined cost-share level;
- Flexibility for PTs to design projects and/or assistance programs in their jurisdiction that reduce long-term relative costs and disaster impacts for Canadians, while ensuring the DFAA remains inclusive of the diverse needs of people residing in each PT;
- Mitigation funding that integrates resilience, is more flexible and strategic, and can be used for a variety of structural/non-structural projects in an affected area in order for PTs to reduce overall risk in high-risk areas;
- More opportunities to support people post-disaster, including expanded eligibility timelines for mental health supports, more eligible non-profit and charity delivery mechanisms, and revised small-business criteria to reflect the current realities of the post-disaster landscape.
Transition Support
Public Safety Canada is currently developing a centralized IM/IT solution which will host materials, templates, guidance material, FAQ sections, process maps, case studies and reporting tools to streamline program administration, support PTs in program implementation and eliminate the current program's paper-based system.
Public Safety is also developing synchronous and asynchronous training to be delivered to PTs up-to, and beyond implementation of the modernized program. The focus of training is providing practical, scenario-based learning to support program delivery and administration.
Open invitations to PTs for bilateral meetings, customized workshops and/or training sessions remain available.
Next Steps: Centre of Recovery Excellence (CORE)
The policy direction from Cabinet in 2022 called for the creation of a Centre of Recovery Excellence (CORE) at Public Safety Canada, which is a key next step in supporting PTs beyond the implementation of the modernized DFAA program.
The CORE provides strategic benefits to the federal government, in particular to the Disaster Financial Assistance Program, by developing and promoting a common approach to recovery. This will assist in the predictability of expenses, the standardization of data collection to enable data-driven policy development and analysis, and help PTs maximize the opportunities for disaster risk reduction and mitigation during recovery to reduce future DFAA liabilities.
The CORE will develop recovery policy and guidance, connect research to practice, help build nation-wide capacity for disaster recovery, and to act as a secretariat in coordinating and deploying, upon request, technical experts to support low capacity jurisdictions in the development of disaster recovery and resilience plans.
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