In an era when climate change is intensifying the frequency and severity of many natural hazards, Canada’s recent overhaul of the Disaster Financial Assistance Arrangements (DFAA) program is a much-needed and forward-thinking step that will contribute to proactive disaster risk reduction.
The changes, announced by Public Safety Canada on January 29, 2025, and taking effect on April 1, mark a significant departure from the limited, reactive, disaster-focused approach of the past which failed to address climate change.
By facilitating climate resilience-building measures, addressing the intangible impacts of disasters, and prioritizing preventative disaster risk reduction for vulnerable populations, the revamped DFAA program better positions Canada to confront its changing ‘hazardscape.’
I have been researching, teaching, and writing about hazards, disaster recovery, and climate change adaptation for over 20 years now, and in terms of disaster policy changes over that time period, the DFAA changes stand out to me as noteworthy.
The changes emerged from work on Canada’s National Adaptation Strategy (2021-2023) and the ”Building forward together: toward a more resilient Canada” report produced by DFAA’s expert advisory panel (2022-2024).
In the words of this panel, “the DFAA as currently structured limits the role of the Government of Canada to post-disaster response and recovery, disconnected from pre-disaster risk reduction or helping to build future resilience. In a rapidly changing climate, this is no longer enough.”
DFAA, in a nutshell, is designed to facilitate disaster-related cost-sharing between the federal and provincial/territorial governments, and the 2025 changes increase both the amount of federal funding available and the flexibility that provinces and territories have when using DFAA funding.
One of the most innovative aspects of the revamped DFAA framework is its newfound embrace of the post-disaster “build back better” philosophy. Previous iterations of the DFAA program, first established in 1970, were heavily criticized for a narrow focus on post-disaster restoration of damaged infrastructure and housing to pre-disaster conditions, which essentially “rebuilt risk.”
This left rebuilt communities vulnerable to future hazards, especially those affected by climate change (i.e. meteorological, hydrological and biophysical hazards, such as floods, wildfires, hailstorms, and storms), and locked them in a cycle of disaster/rebuild/disaster. The updated program now allows funding for risk-reduction activities, such as investing in climate-resilient infrastructure, raising flood-damaged roads, or rebuilding homes with fire-resistant materials.
This shift acknowledges that simply replacing what was lost is no longer sufficient in a world where disasters are becoming more frequent, severe, and unpredictable. Enabling communities to rebuild in ways that reduce future risks and strengthen climate resilience also aligns with global best practices in disaster risk reduction, notably the Sendai Framework.
This approach not only enhances the safety and resilience of disaster-affected areas, but also represents a more efficient use of public funds: research consistently confirms that every dollar spent on disaster risk reduction and climate resilience saves five to 15 dollars in disaster recovery.
Another innovation of the revamped DFAA program is its recognition of the intangible impacts of disasters, such as mental health trauma and post-traumatic stress disorder (PTSD), especially in vulnerable communities.
Historically, disaster recovery programs like DFAA have focused on compensation for tangible losses — damaged buildings, destroyed roads and bridges, and sometimes, business losses —while the costs to support programs dealing with the emotional and psychological toll of disasters were either left to community-based organizations, such as the Canadian Red Cross, or was not addressed at all.
The expanded support for mental health and other intangible disaster-related costs is a dramatic change. Now “…mental health and psychosocial supports, financial counselling, other targeted services to populations experiencing significant disaster impacts, and temporary housing for longer-term displacement” are eligible for cost-sharing through DFAA. By allocating resources to address these less visible impacts, the federal government is taking a holistic approach to disaster recovery.
Arguably, the biggest change built into the DFAA overhaul is its new emphasis on proactive disaster risk reduction. For decades, Canada’s federal disaster management strategy has been largely reactive, with DFAA funding kicking in only after a disaster has occurred.
While this approach has provided critical support to provinces and territories in times of crisis, totaling more than $9 billion in transfer payments since 1970, it has done little to address the root causes of vulnerability or to reduce disaster losses.
New DFAA-eligible activities could include measures like updating flood hazard maps, improving wildfire fuel management or wildfire-resistant housing design, or implementing flood plain redevelopment restrictions post-disaster. By modifying DFAA’s focus on post-disaster recovery to also allow for pre-disaster prevention, the new DFAA program will foster a culture of proactive preparedness, especially in the context of climate change and related amplified extreme weather risks.
Although the changes to the DFAA program are undoubtedly a step in the right direction, their success will depend on effective implementation and provincial and territorial collaboration. Provinces and territories will need to work closely with the federal government to ensure the new funding streams are used effectively and proactively.
Ideally, the provinces and territories will begin to design proactive disaster risk-reduction and climate-resilience projects for possible co-funding by DFAA. This new focus on resilience-building and disaster risk reduction must be accompanied by community engagement and political collaboration across multiple scales, all against the background of occasional new disasters that will push DFAA back into its traditional disaster recovery support role.
Building resilient infrastructure and communities is important, but fostering a culture of preparedness and risk reduction, while also dealing with disasters, will be challenging.
The revamped DFAA program reflects a modern understanding of the complex nature of disasters and associated federal responsibilities in the face of growing climate risks. Innovations, such as building back better, reducing the risks posed by a changing climate, and providing more comprehensive support to vulnerable community members experiencing disasters, will help Canada create better disaster readiness and climate resilience in the long run.
Brent Doberstein is an associate professor in the University of Waterloo Department of Geography and Environmental Management, and the former acting director of the Masters of Climate Change and Graduate Diploma in Climate Risk Management programs.
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