The Perfect Storm

Furious storms and more frequent flooding are causing water damage insurance claims to skyrocket. How can cash-strapped municipalities compensate for insufficient infrastructure? The answer may be easier (and cheaper) than you think.

Climate change isn’t cheap, and Canada knows it.

With governments spending close to $1 billion on flood fighting and victim compensation, severe spring flooding in the Prairie region took the top spot in Environment Canada’s 2011 list of top weather stories. Two years ago, Hurricane Igor hit Newfoundland with 200 millimetres of rain and $200 million in damages. In early September, the East Coast took a beating from Tropical Storm Leslie. While the costs of damage have not been estimated, things are not looking good, and local leaders are calling for action.

Not surprisingly, water-related claims have now surpassed fire as the number one cause of home insurance losses in many parts of Canada.

According to a recent Insurance Board of Canada report, catastrophic events cost Canadian insurers roughly $1.7 billion in 2011, and almost $1 billion in each of the two previous years. The majority of these insured losses were caused by extreme weather events, but smaller weather events also played a role in significant property damage for consumers.

These losses are driven in part by Canada’s aging sewer infrastructure, which is often incapable of handling the new, higher levels of precipitation.

“Underground systems built 50 or 60 years ago often don’t have the capacity for extreme weather events,” says Amanda Dean, director of external and government relations at the Insurance Bureau of Canada (IBC) – Atlantic. Replacing this infrastructure can cost municipalities millions.

The Halifax-based Ecology Action Centre (EAC) has been warning Atlantic Canada about the economic impacts of climate change for years. “The region’s infrastructure is not prepared for this kind of weather,” says Jocelyne Rankin, EAC’s water coordinator. The cost is not limited to capital infrastructure improvements, she adds. Poorly managed stormwater also affects watershed health, and therefore the region’s main industries—tourism, fisheries, et cetera—that rely on a healthy water ecosystem.

Low cost, big impact

Many Canadian municipalities have introduced serious measures to better manage extreme weather risk. When an extreme rainfall event in Edmonton in 2004 flooded over 4,000 basements and resulted in $171 million in insurance claims, the City developed a Dual-Use Stormwater Management Facility Project (watch the video, read more). In Toronto, the City tackles polluting stormwater overflows and protects the city’s natural waterways with a $1-billion, 25-year Wet Weather Flow Master Plan.

While tax bases in larger cities allow for mammoth spends over time, the capital expenses of replacing major systems can be overwhelming for municipalities with strained budgets.

Some cities have opted to incorporate a softer approach. For instance, Toronto combines traditional capital builds with a few simple fixes, such as approving a bylaw that makes it mandatory for property owners to disconnect their downspouts to help reduce the load on the wastewater system.

Encouraging these low-cost residential stormwater projects could be a more manageable solution for smaller cities and towns. Low-impact development (LID) management—simply, working with nature to manage stormwater as close to its source as possible—isn’t a new concept, but, as cities grow to better understand the impacts of more frequent wet weather events, there is increased uptake.

Dean and Rankin’s organizations are currently working with Halifax Water and the Halifax Regional Municipality (HRM) to construct a handful of showcase sites that will demonstrate affordable, effective measures and technologies for managing stormwater on small properties.

A stormwater-themed retrofit of an active Halifax fire hall is one such project. Once completed, the fire hall will boast several affordable LID solutions, including rain barrels, permeable pavers, and a partially permeable parking lot. These installations, plus site tours and interpretation panels, will help visitors visualize how they might work on their own properties.

Motivation to act

Because the affordability and insurance arguments don’t work for everyone, property owners often need a more immediate reason to act.

Rankin says that Halifax Water is considering a stormwater fee due to the increasing cost of infrastructure maintenance. The fee, however, may include a special incentive. If property owners can demonstrate they’ve done work to decrease the amount of impermeable surface on the property, they may receive a credit. “That way, they’d be able to really see the cost savings,” she says.

Motivation to control costs extends to government, too, especially when severe events could signal large spends to help recover communities. While the HRM works on this project with IBC and the Ecology Action Centre, other levels of government are mobilizing. For example, Ontario’s provincial government recently invested in new permeable pavement and stormwater treatment technology to retrofit IMAX Corporation’s parking lot in partnership with the Credit Valley Conservation Authority (CVC). The Ontario Showcasing Water Innovation program funds leading-edge, innovative, and cost-effective solutions for managing stormwater systems in the province, pairing new technologies with live sites.

This program, along with Halifax’s demonstration sites and other similar projects, demonstrates that collaboration and investment in stormwater innovation—be it high tech or low impact—can help bring new technologies to market while mitigating the larger, more daunting economic risks associated with our changing climate.