How changes to federal disaster recovery funding will affect the NWT

The federal government has set out changes to a program designed to help provinces and territories financially after natural disasters.

The modernized version of the program, known as Disaster Financial Assistance Arrangements or DFAA, comes into effect on April 1.

DFAA has sent tens of millions of dollars to the NWT government in recent years after floods in 2021 and 2022 then wildfires in 2023. That money is then used by the GNWT to help residents and businesses.

The federal cash offsets some territorial costs related to things like disaster response, uninsurable losses of homes and businesses, repairing damaged infrastructure, supports for people and mitigation measures ahead of time.

Canada’s minister of emergency preparedness, Harjit Sajjan, said the coming changes will offer “far greater predictability” in terms of provinces and territories knowing what DFAA will cover.

He told Cabin Radio provinces and territories “will exactly know in terms of what funding is available, from the response all the way up to recovery.”

During a disaster, the new DFAA will cover up to 40 percent of “pre-threshold expenses” – costs provinces and territories would normally need to incur themselves, before reaching the minimum spend to qualify for DFAA assistance – if affected communities had already invested in steps to try to reduce the risk of disasters.

In the territories, some projects that try to “accelerate strategic disaster mitigation and disaster risk reduction in” high-risk areas will be eligible for 100-percent federal funding.

Sajjan said the former program covered small businesses worth $2 million or less. The new version will cover companies worth up to $15 million, which he said would offer “far greater flexibility” for businesses.

NWT communities minister Vince McKay said the modernized DFAA builds on calls to make accessing help more straightforward for residents.

“They have concentrated on stuff like strategic investments, more of a risk management kind-of role, expanded resources and then also more streamlined administrative side of it,” McKay said.

“They have heard the concerns and there’s some fine-tuning of some of those topics.”

“There have been cases where disaster assistance payments back to provinces and territories have taken three, four and in some cases even five years,” said Jay Boast, a spokesperson for the NWT’s Department of Municipal and Community Affairs.

Under the new-look DFAA, Boast said, “those payments should not take that kind of a timeline any more, which of course is very beneficial to any territory or province trying to recoup the cost for disaster response.”

Boast anticipates the announcement will lead to more opportunities for mitigation and prevention, while being “very planful about how recovery happens to be able to address some of the risks that are involved in the Northwest Territories.”

Boast stressed NWT residents should get in touch with their insurance companies to see what is available to them. Keeping the right paperwork could make a huge difference if you eventually need to make a claim under DFAA for the “uninsurable” loss of a home or business.

“If you are denied insurance, make sure you get documentation of that and keep documentation for what insurance was and wasn’t available for you,” he said.

Since the DFAA was first introduced in the 1970s, Sajjan said more than $9 billion has been handed out.

During the 2023 Northwest Territories wildfires, he said the federal government “tried to move money as quickly as possible,” though even advance payments could take a year or more.

According to Sajjan, DFAA was designed to address “massive emergencies” such as wildfires, flooding and earthquakes.

He said the situation in Norman Wells – which has reinstated a local emergency after low water on the Mackenzie River cancelled barge resupply and scrambled residents’ cost of living – would not qualify as a climate-related disaster for the program’s purposes.

“As much as climate change is having a significant impact, this is where the levels of government and the industry have to come up with an appropriate solution,” the federal minister said.

“What really needs to take place is increasing the capacity for the town. What needed to take place was for them to anticipate, ‘OK, if you can’t move stuff by barge, how can you move fuel?’

“It wasn’t a temporary fix to an emergency. What you really need to look at is a long-term infrastructure fix for the town itself.”