IMFG Paper | 2023

How Can Municipalities in British Columbia and Quebec Contribute to Flood Risk Reduction?

The cost of flood damage in Canada is increasing as the impacts of climate change intensify. The November 2021 Pacific Northwest floods in British Columbia led to more than $2.5 billion in estimated economic losses, with municipalities requiring substantial provincial support for recovery. Quebec municipalities were also severely affected by two recent floods, which cost governments nearly $1 billion in related financial assistance. Although municipalities in BC and Quebec are responsible for providing flood protection to mitigate risk, they pay a limited share of the cost of disaster recovery. The result is a fundamental misalignment of incentives: municipalities do not adequately bear the cost of flood damage, but are expected to reduce the risk that it will occur.

In a new paper for the Institute on Municipal Finance and Governance (IMFG), Bernard Deschamps, Michael Bourdeau-Brien, and Mathieu Boudreault argue that by correcting incentives, municipalities could be encouraged to play a more proactive role in risk reduction. The authors propose three specific policy instruments to help municipalities reduce the growing number of people living in flood zones: flood mapping, land-use planning, and the relocation of high-risk properties.

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