We’re all in this together–sort of. The Alberta Flood 2013

Nobody said it better than the Dairy Lane Cafe and the Blue Star Diner in a sunny (literally) little poster announcing that on Canada Day every penny received from sales and tips would be donated to flood relief.  The blue banner “We’re All in This Together” epitomized the can-do attitude of Calgarians, indeed all Albertans, who pulled together to assist the victims of the worst flood in Alberta’s history.

Why do people donate? 

Economist Lise Versterlund offers two theories of charitable giving: (1) the “public benefit” theory–an altruistic desire to help without wanting anything in return, and (2) the “private benefit” theory which refers to the uniquely personal reasons a person donates such as a need for social recognition or the desire to share one’s good fortune.

Whatever the reason 84% of Albertans made charitable contributions in 2010.  And guess what, in times of trouble, people donate even more.

Why do people give more to victims of natural disasters?    

Volunteerism and charitable contributions hit all time highs in the aftermath of a natural disaster.  Why?

Psychologist Hanna Zageflkast attributes the surge in generosity to the “Just World Belief”.  Apparently we have an inherent need to believe that the world is just.  If the world is “just” and some people still need charity, then it’s somehow their fault.  They’re lazy, they’re alcoholics or drug addicts, they didn’t study hard enough in school, etc.***Yes, this is a simplistic and incomplete explanation because it doesn’t address the root cause of alcoholism, addiction or the inherent inequality of society.  Dr Zageflkast doesn’t say she shares the Just World Belief, just that others hold it.

Natural disasters are not part of the “Just World”.  They are acts of God (this statement alone could take us off on an interesting tangent).  Consequently we attach no blame to a hapless souls caught in the path of an overflowing river.  We see them as innocent victims.  We perceive them as making more of an effort to help themselves and are prepared to reward them for being proactive.

What happens when the “choice” to donate turns into an “obligation” to fund?

I applaud Premier Redford’s decision to provide relief to all Albertans affected by the flood, but I’m deeply troubled that her promise is unconditional and question her decision not to impose a cap on rebuilding every home damaged or destroyed in the flood.

Here’s why.  Disaster sociologist Timothy Haney points out that in the past North American floods destroyed low-income neighbourhoods;  middle and high-income neighbourhoods were untouched.  Not so in Calgary where affluent neighbourhoods like Elbow Park were flooded along with lower-income neighbourhoods like Bowness and Montgomery.

Mr Haney says that this makes the “dynamics of recovery” markedly different from past floods because “the people most affected will have significant resources at their disposal”.****

I’m sure they do.  The tough question is this:  Are high-income homeowners prepared to use their own “significant resources” to rebuild their million dollar homes given Ms Redford’s unconditional promise that Albertans’ tax dollars will underwrite the cost of rebuilding?

We’re all in this together…but maybe not to the same degree

The Alberta situation is complicated.  There are no provincial regulations in place to prevent new construction in flood risk areas.  There is no flood insurance available for people who’ve purchased homes in flood risk areas.  The homes in flood risk areas are owned by high, middle and low income homeowners.  Given these facts it would be harsh to penalize everyone whose homes have been damaged or lost in the flood.  But that doesn’t mean that Alberta taxpayers should fund the reconstruction of a Carrera marble ensuite bathroom in Elbow Park.

In my view Premier Redford’s one-size-fits-all solution works as the foundation for charitable flood relief program, but it’s utterly misguided for a tax based flood relief program.

The government says the reconstruction payments will come from “cash on hand”.  This readily available cash was not “on hand” a week ago to maintain, let alone improve, the quality of Alberta’s healthcare and educational services.  Presumably it will come from the $3.5 billion contingency fund.  In any event it doesn’t matter—it’s all tax dollars.

Given that the $1 to 5 billion reconstruction plan is funded by tax dollars, I as a taxpayer, wish to make the following alternative proposal:

  1. Reconstruction payments should be capped at the average house price for Calgary, High River, Canmore, or wherever the flood damage occurred.  Using the Calgary example, the maximum payout would be $480,000 (the average house price in 2012). Homeowners whose houses were worth more would be expected to make up the balance or downsize their expectations.
  2. The government should implement, on a going-forward basis, the recommendations in the Groeneveld report which included a ban on disaster recovery payments to homeowners who built new homes in flood risk zones.
  3. The government should develop a flood insurance scheme similar to the hail insurance program provided pursuant to the Agricultural Financial Services Act so that homeowners who live in flood risk zones will be able to purchase flood insurance as a safeguard against future flood damage.

We’re all in this together is the right motivator for charitable contributions, but when scarce tax resources are being diverted to rebuild the homes of the wealthy it’s every man for himself.

* “Why do People Give?” in Richard Steinberg and Walter W. Powell eds., The Nonprofit Sector, 2nd edition, Yale Press, 2006

**StatsCan Website http://www.statcan.gc.ca/pub/11-008-x/2012001/t/11637/tbl04-eng.htm

***http://www.sciencedaily.com/releases/2011/01/110114082432.htm

****Edmonton Journal Online, June 28, 2013


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32 Responses to We’re all in this together–sort of. The Alberta Flood 2013

  1. jane walker says:

    …. and what of the aboriginal communities in the south that have thus far received far less ‘outside’ assistance?

  2. Rene says:

    The real scandal here is that homeowners, through no fault of their own but due to deliberate exclusion by their insurers, are facing potential total loss or significant catastrophic loss on uninsured properties, not only due to insurer’s avoidance of compensation for such loss, but also in large measure due to their inability to access their property within reasonable time and mitigate their losses. If many have to wait several weeks before they can begin cleanup and repairs, significant loss becomes total loss.

    Now it would be a different story if their home insurer accepted responsibility for such loss and communicated this to their policyholders, here homeowners would be guaranteed proper cleanup, repairs and settlement in accordance with building codes, insurers would accept responsibility for any delays, and homeowners would likewise be compensated for additional living expenses during the period of delay, more than the measly $ 1200 the Alberta government is offering, adequate for a few days but clearly inadequate for a delay extending to one month or beyond.

    Where not only the Harper government, but all political parties in the House of Commons, as well as provincial legislatures, are at fault is in allowing the Canadian insurance industry to avoid its responsibilities and opt out of compensation for such losses, leaving government to partially and inadequately foot the bill, leaving homeowners with inadequately restored properties and enormous losses…

    Which brings up the issue of public insurance, as you suggested, and I am surprised the NDP is not campaigning on such issue as the current flood disaster in Alberta provides the perfect argument for such a program, given the blatant market failure of the Canadian insurance industry due to deliberate exclusion of overland flood coverage on homeowner policies and inadequate coverage for catastrophic loss on mortgaged properties, which the same financial institutions are quite prepared to sell mortgages on. If government and/or the Canadian taxpayer is expected to step in and compensate or partially compensate homeowners for inadequately restored properties the insurance industry deliberately avoids to cover for catastrophic loss, government may as well step in, issue the policy coverage on such properties, collect the premiums, control the cleanup and restoration to ensure everything is properly done to building code, and issue the appropriate settlements…

    • Rene, welcome to the Soapbox. Excellent analysis of the issue with respect to the insurers’ failure to provide coverage. I assume their argument is that the risk is too great, but insurers tolerate much greater risk exposure when they provide coverage for complex industrial projects like the BP Deepwater Horizon rig (insured for $560 million). I’m sure that the cost of insurance for the oil and gas industry skyrocketed following the Macondo blowout, but it’s still available.

      Interesting observation about the NDP not picking up the cause and running with it. We’ve experienced three major floods since 2005, we can’t continue to tap the taxpayer to pick up the pieces when it’s all over.

  3. Rose Marie MacKenzie-Kirkwood says:

    The money you earn is yours to spend as you wish, but when it comes to tax dollars and charitable donations I believe that the funds should all be divided equally. We are all eating from the same pot and must share.

    • Rose, welcome back! Yes we’re all eating from the same pot and it has to cover health, education and a myriad of social services so I’m afraid the wealthy are on the hook this time. Rene’s point that the provincial (and federal) government dropped the ball by not pressuring the insurance companies to step up to the plate is even more infuriating when you realize that the provincial government ignored the Groeneveld report which set out a number of recommendations which would have cost $306 million to implement. Who knows how much damage, including the loss of human life, could have been avoided, had the recommendations been adopted.

  4. Carlos Beca says:

    It is still too early and so I will not post what I would like to but I want to say something that really infuriates me every time we have a catastrophe like this one. Albertans vote for the PCs in great numbers and claim that paying taxes is a waste of money and that government should stay out of our lives blah blah blah – the neocon song that makes my skin itchy, but when it happens it does not matter if it is rich or poor, they all complain govenment does nothing, money is slow coming, the help is inadequate and on and on. Well my friends if you want a strong government that can adequately help you when necessaryt you need to pay taxes to cover the costs, that is called civilized society and if you want it you do not vote for a party that wants to weaken the government and destroy public cohesion. Remember that it was one of the great promoters of this current ideology that said ‘There is no such thing as a society: there are men and women and there are families’ (Margaret Thatcher)

    Calgary is especially known for being great fans of very right wing ideology but obviously not when the crap hits the fan. Keep voting for PC and Wildrose and one day your descendants will have to suffer what happened in New Orleans if not worse.

    • Carlos, thank you for reminding us of Margaret Thatcher’s infamous comment. It’s not the right philosophy. I would counter it with Oliver Wendell Holmes’ famous statement: “Taxes are the price we pay for civilization.” It appears as the first of “10 Big Reasons To Feel Good About Taxes” posted on the Canadians for Tax Fairness site and accompanied with this statement ” More specifically, taxes are the price we pay for the Canada we love.” Here’s the link: http://www.taxfairness.ca/page/10-big-reasons-feel-good-about-taxes.

  5. Roy Wright says:

    This topic is quite near and dear to Mr. Soapbox and as an urban planner, I feel the need to wade into the suggested resolutions outlined by Mrs. Soapbox. While I can agree with all three steps in the mitigation plan, I feel we need to go further so we are not faced with similar fiscal catastrophes in the future.

    Firstly, urban planners and engineers often talk about the one in a hundred year flood and design accordingly. The City of Calgary and the province have mapped how such a flood would cover Calgary. It is important to note that there are three definitions of waters when looking at flooding. There is the floodway (river channel for the flow of water), the flood fringe (areas inundated by floodwaters) and finally overland flow (inundated by a shallow overland floodwater).

    My recollection of these flood risk maps, just recently approved by the City as part of its Land Use Bylaw, showed much smaller geographic areas impacted with a one in a hundred year flood than the newspaper maps that indicated flooding in a much wide expanse of Calgary. My first question has to revolve around whether this flood was greater than a one in a hundred year flood, or were the City maps too optimistic. It is important to ensure we understand the probability of such an event occurring again.

    Ms. Soapbox suggests that some amount of taxpayer money be spent on renovating these homes. However, I would suggest we put in another requirement before allowing the money to be spent on such houses. We should require all renovations follow the City of Calgary Land Use Bylaw that require certain building designs if the property is located in the flood fringe or in the overland flow areas. (If you have a house in the floodway, it should not be replaced under any circumstance). Those requirements include:
    -designed in such a way to prevent structural damage
    -first floor above designated flood level (which is why we need to assure ourselves we have projected the right level of the one in a hundred year flood)
    -all mechanical and electrical above designated flood level
    – (overland flow areas) – first floor must be 0.3 m above the highest grade on the parcel

    However there are weasel clauses within this part of the bylaw that allow people to escape such requirements. If you are in the flood fringe and the house was built before 1985, it does not apply. If the existing area was designed to accommodate urban residential it also does not apply. In the case of overland flow areas, the best before date is 1999, unless of course the existing area was designed to accommodate urban residential. That means most, if not all areas that were hit in the flood of 2013 appear to escape having to address such design issues.

    If those rules were applied to anyone wanting to rehabilitate with tax payer dollars after the flood, with no excuses, then I would suggest damages could be reduced in future when (and not if) the next flood hits. Coupled with the insurance scheme, I feel the fiscal outcomes would not be so devastating.

    • Good morning Mr Soapbox! I must admit it had never occurred to me that the engineering studies outlining which lands would be affected by a 100 year flood might be inaccurate (or in your words “optimistic”) and consequently even more homeowners could be at risk the next time the rivers overflow their banks. I understand that there is little most homeowners can do to mitigate the damage but if they were aware that they might be in danger they could at least make the structural improvements set out in the Calgary Land Use Bylaw. Based on your discussion of the “weasel clauses” it would appear that the Land Use Bylaw should be amended to made these structure improvements mandatory for all homes at risk of flood damage regardless of when they were built.

      In addition to cleaning up the flood damage caused by the 2013 flood the municipal and provincial governments need to clean up their regulatory regimes to ensure that when the next flood hits we’ve done everything possible to minimize the damage, both physically and financially.

      PS Please note my timely response…(dear readers, Ms Soapbox inadvertently forgot to response to a previous comment by Mr Soapbox and she never heard the end of it!)

    • I salute this thoughtful and informed response to a difficult issue (and the timely response from Mrs. Soapbox 🙂 ). It offers a starting point for what steps should be taken now for when (not if) the next flood happens.

      I would suggest another alternative to Mrs. Soapbox’s proposed restrictions on provincial help to the wealthy: Instead of using average house price (which includes land value) perhaps a better “limiting” factor for provincial support should be average square-metre replacement costs. Certainly, there needs to be some limit — some of these “victims” have net worth that measures in the billions. And of course Mr. Soapbox’s proposed conditions on rebuilding make sense. And if owners want to upgrade from that average cost with Carrera marble, they are welcome to spend the money.

      (Mrs. KfC observed a property where several hundred bottles of wine — I presume from a basement cellar — were “drying” out on the lawn. I trust that Alberta taxpayers are not going to be held responsible for re-paying any “damage” to this investment. 🙂 )

      And I also strenuously object to the idea that the insurance industry should be forced to provide policies offering protection to those who choose to build on flood plains. Who do they think is going to pay for this? Those of us who made the responsible decision to buy in areas where floods will never be a problem? There does come a time when you have to accept responsibility for the choice that you have made.

      If Mr. Soapbox is up to another contribution, I would appreciate it. A number of contributors here and elsewhere have advocated a total ban on flood plain development. Yet, “newer” buildings in Calgary’s Eau Claire (and I would presume the East Village, eventually) have been constructed to standards that minimize damage — yes, they were evacuated but my impression is that the “damage” is restricted to lower level parking floors and the living spaces were not effected. The last thing Calgary needs is a “hollowed-out” downtown (since it is a flood plain) with no residents — surely it is possible that sound standards can result in minimal disruption, with maximum benefit.

      • Thanks Kevin. I like your “means test”. It may be more flexible than my cap.

        I understand your objection to forcing insurance companies to offer policies for those who built on the flood plain. A combination of provincial regulations and municipal by-laws could be used to prevent NEW development in the flood plain. The Groeneveld report canvassed this proposal with the municipalities. It found that small municipalities liked the recommendation, partly because it shifted the responsibility for halting development to the province and avoided “political repercussions on themselves”. Apparently the developers exert a lot of pressure on local council (surprise). Large municipalities opposed this recommendation because “it halts development in very high value areas”. The recommendation went ahead nevertheless for safety reasons and because “the financial consequences will be borne by the provincial Disaster Recovery Program.” Unfortunately the government failed to implement this recommendation.

        The sticky issue is how to insure existing homeowners on the flood plain. The Groeneveld report suggested a number of flood mitigation options including land purchase, dykes and retro flood proofing, but gave no details on how these would work in practice.

        Mrs KfC’s observation of hundreds of bottles of wine on the lawn brought to mind the story I heard from my hairdresser. He and his co-workers were evacuated from the shop on one hour’s notice on Thursday afternoon and couldn’t return for a week. This was a significant hardship because if they don’t work they don’t get paid. My hairdresser is a caring guy. Not content to sit around he volunteered for clean up duty in Elbow Park. He was surprised to see private security guards posted at some doors and homeowners bemoaning the loss of their art collections (insured of course).

        Mr Soapbox says he’ll do a follow up post on the issue you’ve raised at the end of your comments. He thinks we can take further steps to “flood proof” the core without having to resort to hollowing it out. Calgary is becoming a great city. It needs a vibrant core.

  6. Rene says:

    The Canadian insurance industry does not have a justifiable rationale for the deliberate exclusion of overland flood coverage on homeowner policy other than their own precedent, inasmuch as they are quite prepared to insure commercial losses for overland flood damage. Moreover, overland flood coverage on residential properties exists in every other G8 country including Russia, not generally known for strong consumer protection practices. In addition, many of the larger Canadian insurers are international in scope and do operate in other G8 countries, where they do provide overland flood protection on residential properties. So what’s their argument for Canadian exceptionalism ? That their Canadian subsidiaries are less competent in calculating risk, setting premiums, purchasing reinsurance than their other operations.

    The Canadian government, and provincial governments, have been quite blind, ignorant and negligent with respect to this issue, I might even say deliberately so, to the extent that it takes a widespread disaster such as the current Alberta flooding to bring such issue to public attention, and even then politicians are simply accepting the insurance industry’s avoidance of its responsibilities as a given fact they have no control over and can do nothing about. When there is blatant and deliberate market failure such as with flood disaster, it is time for government to step in and force insurers to either do their job and face their responsibilities, or step aside and let government do it in their place..

    • Rene, great comments, especially the last sentence.

      I reviewed the Groenevel Report today. It recommended against a provincially operated or funded flood insurance program. Here’s their rationale: “The existing Disaster Recovery Program provides sufficient emergency funding to overland flooding. An American-style government insurance program would be a cumbersome, expensive and inefficient duplication of this program. Private flood insurance does exist for sewer-backup or sump-pit flooding. Provincially operated flood insurance would not increase safety of Albertans, increase recovery payments to flood-affected areas, decrease or mitigate flood effects or save money for the Province of Alberta.

      Rene, you clearly have expertise in this area and could shoot holes in this rationale (I hesitate to call it that) in a nanosecond. The things that pop to my mind are (1) the recommendation ignores the fundamental question you ask which is why do the politician continue to accept the insurance industry’s refusal to provide flood insurance and (2) such insurance would increase safety and decrease or mitigate flood effects if it was a condition of insurance that an existing home had to be retrofitted to be flood proof and new homes would NOT be insured if they were built in a flood prone area); furthermore a provincial insurance program would increase recovery payments and save the Province money because the insurance fund would grow over time and reduce the need to fund losses from “cash on hand”.

      Interestingly 20% of the municipalities consulted during this process did not support this recommendation (one wonders whether Calgary and Edmonton were among the dissenters) but were brushed aside with this comment “their concerns about flood compensation are addressed by the existing Disaster Recovery Program (DRP) system and reinforce that our DRP must be fair and provide reasonable compensation. Isn’t this where we came in?

  7. louloumic says:

    Could not agree more with all the comments.. Going back to your initial posting, where did this money come from and what exactly was it earmarked for? Their policy is to slash/slash/slash and what, hide money? Why have we had such cuts to our educational/health care programs when they had this $3.5 billion “cash on hand”?

    For years, people complained about Liberal Government policy’s while in power. Well, I can’t see how much better the Conservatives are.

    I am not well versed in urban planning. but it seems that Developers, like so many of our DEMOCRATIC, CAPITALISTIC entities, are all about obtaining top dollars for shareholders, and spending the most minimal amount of $ on safety, security any govt regulations? As for the folks building on the river, if they can afford multimillion dollar homes, good for them (maybe in the next life…), well, I can’t believe they would refuse to pay additional premiums (albeit, probably steep) to their Insurance Carriers if such insurance was available. Don’t get me started on the Insurance lobby. That being what it is, and while we are on the topic, haven’t corporations been running our governments? I heard this decades ago and it seems like it has and always will be swept under the rug.After all, money means power. But do our politicians not report to tax payers? Are they not responsible for doing due diligence? One has to wonder if all government officials can be bribed to allow industry to control our policies And why does the City of Calgary have its building regulations overridden?

    I don’t believe in “Acts of God”. We are responsible and should be held accountable for every questionable decisions we make. And Is there no one left in government who can stand by a strict code of ethics? I know many westerners hated Pierre Elliott Trudeau and how his energy policy affected the economy. However, could he speak his mind and stand by his convictions, good and bad or what?

    I decided long ago that politics was not be considered by anyone who has strong convictions, who follow the dictates of the people who elect them, and use their tax dollars judiciously.

    I hope as h— there is another life, ’cause this one is a mess. I know, I know, I do mostly see the positive but that does not mean my name is Pollyanna.

    From a former “Eastern bum” who has just about had it with the conservatives in this province (there have been some good ones but it seems so long ago)

  8. Rene says:

    Sorry I’m late with my responses, I’ve been busy carrying on similar arguments on other political blogs, such as Montreal Simon or Dr. Dawgs, but I’ll post some of my contributions which may clarify some points you and others raise…

    **************************

    And if you resided in High River, Alberta, you might be subject to catastrophic flood damage to a mortgaged property, which you are unable to access for the next four weeks, in order to mitigate an uninsured loss and prevent it from becoming total loss. And whereas you are insured with a private insurer who provided you with inadequate insurance, leaving you with potential total loss and a mortgage you are still responsible for, that’s fine with industry advocates, as the insurance industry knows what it is doing, so says Stephen Harper and Jason Kenney. So you are left to go begging hat in hand to your provincial government for disaster relief, while you hold a basically worthless policy of homeowner insurance in your hand. And you wonder what’s wrong with that picture.

    In the meantime, the industry which does have the professional resources to intervene, handle the loss, the cleanup, the restoration, the temporary living expenses, the overall settlement with respect to quality repairs and building codes sits on the sidelines, and government, with no qualified personnel, loss adjustors, restoration experts, building inspectors is expected to settle losses sight unseen, on the basis of receipts and invoices you mail in, with whatever finances and resources you might muster on your own, with unlicensed contractors you find by word of mouth who do improper and inadequate repairs, and you believe this is the proper manner in which to respond to such catastrophe, as, of course, private insurers “know what they are doing”. Exactly, they are avoiding their responsibilities.

    Why do you believe auto insurance is provincially legislated? I’ll tell you why. If they were not required to provide standard uniform coverage province-wide, there would be a hodge-podge of coverages and different policies, wherein drivers would in some regions be bereft of injury coverage, wherein some drivers would be denied coverage altogether and others would be denied theft coverage in regions with high incidence of theft.

  9. Rene says:

    Harper Conservatives believe in “laissez faire” economics, believe that financial institutions should be able to sell you a mortgage on a property requiring homeowner insurance, that the same financial institutions acting as insurance providers are entitled to sell you an inadequate insurance policy to cover the same mortgage, but opt out of their responsibilities through deliberate coverage exclusion and leave you shouldering the burden for catastrophic loss.

    I am not addressing my argument to Harper supporters, who if they are foolish enough to support such a government and its policies, including its hands-off approach to the practices of the Canadian insurance industry as opposed to those of other developed countries with respect to catastrophic flood loss, deserve the fate that nature has thrown at them.

    Unfortunately, many innocent parties have been thrust into such situation with no clear knowledge of the inadequacy of their homeowner coverage, and no option to purchase such coverage had they been aware of such inadequacy, and they are left with the burden of such losses. To those who do understand and accept the rationale of provincially legislated auto insurance, I would argue that the market failure of the Canadian insurance industry with respect to catastrophic flood loss on residential properties does point to the need for similar industry regulation.

    That is why there is government intervention in industry and in the marketplace. Otherwise we would have no health and safety regulations, no minimum wage, no standardized workday. The insurance industry in every other developed country has been able to accept such catastrophic risk, has been able to factor such risk into the costs of their policies, and deal with claims arising from such losses. Why should Canadian insurers be able to opt out simply because they are averse to the risk?

    Every other industry is subject to regulation they are not particularly happy with, be it safety rules and building codes for the construction industry or emission standards and safety requirements for the auto industry. What makes the insurance industry so special that no one dares interfere with the way they conduct their business? They have already been forced to provide uniform injury and liability coverage to auto policyholders, and moreover obliged to provide coverage to bad drivers they deem a high risk, what they term the facility market. The same principle holds with respect to the homeowner market, they should either be prepared to provide adequate coverage to all, or be prepared to step aside and allow government provide such necessary coverage, issue the policies, collect the premiums and settle the losses.

    We already are handling the crisis in the worst possible manner, in the sense of turning to government relief funds to cover uninsured losses, which amounts to the least effective, least efficient, most inadequate form of compensation for improperly restored properties, sight unseen. At least if the insurance industry is involved, against their own desires admittedly, in such loss investigation and settlement, they do have the resources to deal with such situations, to ensure everything is done effectively and efficiently, ranging from loss assessment to cleanup, repairs and allowances for delays, temporary living allowances, appropriate settlement to policyholders, and so forth. Given that you do have to twist their arms to force them to accept their responsibilities, and this would not be the first time such action was required, nor would it be the last, but it would be the best possible solution to the current dilemma facing homeowners subjected to such catastrophic loss.

    • Rene, the flood victims are starting to discover they just might have an insurance problem (as in “sorry bub, nothing for you”). This morning’s Calgary Herald featured a story with the headline “Insurance woes hit homeowners”. It describes the patch-work coverage provided by the insurance companies–some will provide insurance for sewer backup caused by the flood and others won’t.

      The article suggests that a policyholder who feels that his claim was wrongfully denied launch a lawsuit (mega bucks) or appeal to the General Insurance Ombusdservice (described in the article as “an arm’s length body funded by the industry”). The problem of course is that an insurance policy is a legally binding contract, so coverage or lack thereof, depends on the wording of the policy. If coverage is excluded under contract the judge or the GIO will have no power to give it to you anyways.

      I really liked your suggestion of getting the insurance industry to “donate” its loss investigation and settlement expertise to the government. It seems like the least the industry can do under the circumstances.

      PS no need to apologize for being “late”. This is a complex issue and you and others need time to get their thoughts together. Your input is much appreciated!

  10. Jane Walker says:

    What wonderful dialogue! Thanks so much to all …. it has been interesting,,to say the least!
    I am wondering if we could look at establishing a fund that will offer some grant funding and then low interest or no interest loans available to those who are challenged with these results of natural disasters.

    I am not in favour of private insurance coverage when I think of the insurance companies’ obligations to shareholders and their need to recoup their losses to re-establish their base from which they provide the assistance. These disasters would send insurance premius through the roof!

    I am not in favour of public insurance as it would require yet another government department to administer. The premiums would be relatively insignificant in covering admin costs and establishing the significant monies that would be required to be available to address the claims.

    Any event such as a natural disaster can be managed proactively to a certain degree but the extent can still be vastly destructive and the expense gargantuan …. as we have seen often lately!! Responsible fiscal management of a portion of our provincial revenue could establish an additional arm to our disaster relief fund and avoid the administration expense of a public insurance arm. We could leverage our assets to assist in resolution of these disastrous situations. We, as citizens, would all be contributing and thus know that we had a fair and appropriate safety net available for all who have been affected. The disaster effects would still be personally devastating but the worry of handling financial resolution would be significantly reduced.

    • Jane, I can certainly see your point that a public insurance program runs the risk of being expensive and bureaucratic. Furthermore it would provide the PCs with yet another opportunity to create a hand-picked Board to oversee the administration of the insurance organization a la the new Alberta Energy Board and the now defunct AHS Board and the last thing we need is more patronage appointments peppering the Alberta political landscape. This was the best I could come up with given the lack of insurance from the private market; what I like about your solution is that it provides a creative alternative funding mechanism to the public and private insurance proposals. The fact that we’ve been able to come up with alternatives to Redford’s disaster relief fund solution demonstrates that the government should not have dismissed the matter out of hand in 2005.

      I’ve been trying to find out more about how the private insurance market might work (Rene may have further insights here). The Calgary Herald ran an editorial yesterday arguing for mandatory private insurance for homes built in flood prone areas. The editorial referred to the US experience and suggested insurance rates that would range from $3500/year (for a home two feet above base flood elevation) and $17,500/year (for a home four feet below base flood elevation). This insurance would available to homeowners in flood prone areas and the premiums for the rest of us would not rise. Sounded fair at first blush.

      It will be interesting to see if the government decides to revisit this issue or whether it will continue to rely on taxpayers to foot the bill.

  11. Carlos Beca says:

    Well it seems another two fiascos growing for Alison ‘The Lost Soul’.
    This insurance business is nothing new and it works the same way as the private banks and markets. When things are up and money is just pouring in they just increase the fees so that even more is made to pay for the extravagant salaries and bonuses for the big wigs. When times are bad, they just pass the responsibility to the government and so they get the public money they want so they do not go broke. It is a great recipe really. Calgary floods are not any different and even the big million dollar homes will be paid by taxpayer’s money whether or not we agree with it. We know the routine. In the end it is all either our taxes or the public money so why bother with the private myth.

    The second fiasco which seems to be growing fairly fast in Edmonton and which it was obviously going to happen is the Home Care for our senior citizens. It is truly a mess and so far nothing is going well. Did anyone other than Fred Horne and Alison Redford, think this was going to be a winner? Well in one case I know, a senior in a lodge asked the representatives of the new spic and span company from Toronto how they expected to give better service and still make the hefty profits they all expect in the Health Care Industry? The answer was a BIG SMILE.

    • Carlos, thanks for bringing our attention back to the Edmonton Home Care situation. There’s been a lot of coverage of the Premier’s response to the flood, the media says she’s doing very well and that her approval ratings will rise. I’m very concerned about this for two reasons: (1) I don’t agree that her response, other than recognizing the need to eliminate red tape to help the flood victims and penalize scam artists, has been brilliant. The government took too long to declare High River a disaster area and her disaster relief fund is poorly thought out and (2) the halo effect from her flood response will cause Albertans to ignore the damage her budget cuts has caused to healthcare, education, seniors care, PDD etc.

      Photo ops in times of crisis do not excuse incompetence and a lack of compassion on the broader front.

      PS I was shocked by the response of the representative of the Toronto company to a legitimate question from a senior who will one day fall into the care of that company.

  12. Carlos Beca says:

    Susan I was not shocked with the big smile at all. By now I am fully trained on how lowering the standards in the name of privatization works. A Big Smile in the current dictionary means ‘What do you expect? Why are you even asking that question? You know exactly what is going to happen idiot’. Furthermore these people are too weak to even have any reaction to whatever comes and a lot of them do not even have a family member to help. Believe me, these companies know that very well and so do the Fred Hornes and Alison Redfords of this world. She is very good at taking photos with children and seniors and whoever else that can help with her puppy eyes but her actions are as bad as Ayn Rand.

  13. Julie Ali says:

    The cynical acts of this government with reference to any and all of our social issues are to be expected since they have had so much practice at poor governance.

    My question is -and it has so far not been answered is why the flood mitigation report was not promptly released and the recommendations in this report not followed?

    Taxpayers pay for these reports and yet we don’t hear anything about the information in these reports.
    If we look at the time line for the report (and by the way this wasn’t the first report) it is amazing to me that this government simply sat on its bum while it could have taken action years ago.

    http://www.theglobeandmail.com/news/national/recommendations-from-2005-alberta-flood-still-relevant-today/article12771618/

    Mr. Groeneveld’s report wasn’t the first flood study to sit in a drawer. Alberta prepared a draft flood mitigation strategy in 2002, but it remained a draft and was never published. Mr. Groeneveld’s committee reviewed it while preparing its report after flooding in 2005. “A substantial volume of material [from 2002] was still relevant,” Mr. Groeneveld’s report says. Alberta prepared a draft flood mitigation strategy in 2002, but it remained a draft and was never published. Mr. Groeneveld’s committee reviewed it while preparing its report after flooding in 2005. “A substantial volume of material [from 2002] was still relevant,” Mr. Groeneveld’s report says.
    That report recommended Alberta stop selling Crown land in known flood risk areas, saying doing so “abdicates the responsibility to keeping Albertans safe to private landowners… selling lands in flood risk areas is the opposite of flood mitigation.”
    Mr. Groeneveld says that’s still the most important recommendation.
    ***************************************************************************************************

    Frankly I see no reason to repeatedly pay money for replacement of houses that built contrary to common sense in flood risk areas.

    These areas should be mapped and quite simply taken off the market.
    If this sort of hard line policy is not adopted we are going to have a constant problem what with climate change altering the weather.
    I was just in Calgary yesterday and in the space of an hour –we had rain, hail and massive winds. The clouds were ferocious.
    On the way home from Calgary we passed roofs with hail collected in white snow caps in Airdrie; the roads were sequenced in hail nucleotides.
    These are interesting times in Alberta in terms of climate.
    And I do believe the climate change will ensure more flooding in the future.
    As I write this comment, it is pouring in Edmonton.
    So if the folks in power don’t get off their duffs to make hard decisions we are going to be experiencing ongoing floods and difficulties for citizens.
    In addition, this is going to be an ongoing taxpayer hole because as sure as cats make kittens, the insurance companies are not going to lose their major profits in easing a problem in the governance area of society. So what this means is that taxpayers will pay for everything as we usually end up doing when government fails at its job.

    If folks build in a flood prone area–the government must require insurance companies to cover these homeowners or set up a private insurance corporation that will charge major bucks for the privilege of getting flood insurance for these homeowners.
    In addition, homeowners must be warned when purchasing such homes of the risk of flooding in the area.

    My major annoyance is the failure of the Alberta Tories to do their jobs and the costs to the taxpayer for such derelictions of duties.
    We pay for everything.
    And yet when we ask for money for education, seniors, vulnerable children in the foster care system, that money is not there.
    Where is that money?
    It is there for bailing out the Tories at both the provincial and federal levels when they are shown to have failed at their jobs.

    It is either poor governance or outright corruption of our political hires as in the case of the mess at the PMO–with the Duffy case –where Nigel Wright hands over a $90,000 cheque to the Duffy for what reason pray tell?
    Surely it wasn’t to help out a friend?

    And the Prime Minister of Canada says that only Nigel Wright is involved despite the fact that we now have information that says three other folks in the PMO knew about the deal plus a Senator!

    It really makes me wonder if citizens will ever be able to hire a group of ethical and yes, competent folks to government or whether we will see good men and women alter themselves to fit the requirements of political life –which seem to be all about getting rehired at any cost.

    As for the flooding in southern Alberta, I am pretty sure it will be erased in the minds of taxpayers by the handing out of great sums of cash—the cash that wasn’t available for Edmonton Public Schools just recently— for there was no money to be had.

    I am beginning to think that citizens simply have to assume that government is just there to pontify and do the work of taking care of their families themselves. In other words, we live in Republican tea party Canada now and it’s every citizen for themselves.

    • Julie thanks for reminding us about the 2002 flood mitigation study, which as you indicate, stayed in draft form and which was partially incorporated into the 2005 Groeneveld, which as we all know, was not implemented.

      I’m with you on the point that replacing houses over and over again in a flood zone is lunacy and the province and the municipalities must take steps to restrict development to only those structures that are sufficiently flood-proof or carry sufficient insurance (public or private) to prevent their reconstruction from becoming a burden on the taxpayer.

      This flood has devastated the flood victims (homeowners and renters alike) and seriously damaged the local economy. Surely we’ve learned our lesson and will be better prepared the next time around. Like you I believe that things are only going to get worse, not better.

      “The roads were sequenced in hail nucleotides”. What a beautiful sentence. I love the fact that a poet activist is reading the Soapbox!

  14. Roy Wright says:

    I am following up on the suggestion from Mr. KFC that I might wish to comment on the notion that no more building in the floodplain be allowed. I had originally held off responding, hoping to gain more information on the status of downtown buildings, and some more details on the nature of the flooding (breaches, combined impacts of Bow and Elbow stream flows, and probability analysis (i.e.: 1:100 year flood or something worse). However, it is almost impossible to track down civic staff as the vast majority of the big blue building occupants will not be in their quarters until sometime in August…that is an interesting story all by itself!

    The commentary about not building in floodplains rises every time a catastrophic event occurs such as our 2013 flood. While I agree we should not build in floodways, building in the flood fringe (which includes part of the downtown and East Village) may be appropriate, provided a number of conditions are addressed. In the case of our downtown, Mr. KFC appears to be correct in stating recently constructed buildings appeared to survive with minimal damage and I would suggest the risk analysis would allow for continued building. Further protection may be warranted once we determine how the flood waters entered downtown. Was it backflow from the Elbow when it could not force itself into the faster flowing Bow? Was it the Bow breaching an embankment or some other freak circumstance? Once we determine how the water entered, we likely should figure out how to get it out quickly…was it trapped…I don’t know. Lastly, we need to determine just how frequently we could expect to see floods of such a magnitude.

    I am getting the impression that the biggest challenge facing downtown was issues associated with power. Transformers being flooded, electrical systems below the flood line all contributed to the delays in getting downtown back up and running. For example, the municipal complex appears to have lost its power generation and is relying on generators to get a couple of public access floors open. If electrical systems were above the flood level, that building might be fully operational already, rather than becoming functional sometime in August. I would suggest we need to re-think how we handle/locate power in the downtown, from individual buildings to Enmax transformers. The good news is that new commercial and multifamily buildings do not have the Land Use Bylaw exemption clause that single family homes can exercise in escaping from taking those extra precautions.

    I am sure these sorts of debates about how to make our downtown more secure are already occurring. Our downtown, given its incredible infrastructure replacement cost, is not going anywhere, so risk reduction strategies need to be sorted out and implemented.

    • Thank you Mr Soapbox. I share your concern about whether this was truly a 1:100 year flood, not so much from the perspective that if it was a 1:200 year flood the next one won’t be as damaging but rather from a concern that the old measures of severity are unreliable due to the impact of climate change. I’m not sure what to do about this other than to push the province and the municipality to enact strict regulations that prohibit any construction on a flood plain without the appropriate flood proofing (the correct placement of power sources would be one) and requiring flood insurance (public or private) if flood proofing to the appropriate level is not possible. Having said all that I wonder why anyone would want to live in the path of a river that overflows its banks on a regular basis! As you know Mrs Soapbox was ready to move out after the mouse invasion; the threat of a flood would make her crazy.

  15. Margie says:

    Our entire community of 305 dwellings on lease land on the Siksika Reserve has been destroyed in this flood. For some of our homeowners, it was their primary residence. For some it was a week-end residence. The majority of home owners were senior citizens – many had either retired there and wintered down south, or planned on doing so. The lease was up at the end of this season, so many of the owners had purchased property elsewhere, and were going to move their places out this fall.

    A major berm project was undertaken after the flood of 2005 and it was completed in 2011. This berm did little to stop this flood, though was very effective from 2006 through 2012.

    It has been 3 weeks since we were flooded. We are just now getting in to assess the damage. Health Canada and the Siksika Nation wouldn’t survey and release our homes until after they had finished doing the 200 homes on the Reserve. What wasn’t destroyed by twelve of more feet of fast flowing river, is now destroyed by the mold and contamination. I will see the wreckage at my place today. The insurance adjusters have been on site for several days, but it appears that no one will be covered for anything.

    We will all probably apply for Disaster Assistance, but that will likely only be available to Primary residents. The wording of the assistance refers to rebuilding on site, but there are not likely going to be any homes that can be rebuilt, and there is no new lease, so there is no site. Not sure whether the assistance plan rules will stretch far enough to provide assistance to any of us.

    Here is a link to historical flooding in Calgary. I don’t know if the suggested data correlates to your theory of climate change or not. I’ve lived in this province for over 60 years, and my dad has been here over 80 years – we’ve seen the ebb and low of this provinces climate several times in the past including the years when everyone said it was Global Cooling.
    http://www.theweathernetwork.com/news/articles/calgary-floods-it-could-happen-again/8295/

    This is the face of the flood for 305 families at Hidden Valley.

    • Margie, the legal ramifications of the situation you describe are mind boggling and remind us (well, me anyway) that nothing is a simple as it might appear on the surface. I sincerely hope that Redford’s government takes a careful and compassionate look at the devastation suffered by all the flood victims, regardless of their status as lessees, owners, primary residents or recreational residents and develops a protocol to treat them all equitably. I wish you the very best as you and your community travel down the difficult road to rebuilt (both physically and emotionally).

      Thank you for commenting and welcome to the Soapbox.

  16. Mark says:

    I agree with Susan. I feel bad for, and know some of the people affected by the flooding in Alberta. I am also aware, I researched before I bought my home and was aware of the homes that were on existing flood plains and stayed away from them. Though I pay the same insurance rates as many of them, this is everyone’s responsibility as due diligence when buying a home. The views afforded from living on a river weren’t in my price range for the most part anyway. Be reasonable folks, we have a moral responsibility to be helpful and concerned, but lets look at the what is reasonable as far as the taxpayers culpability in this. I slogged and got blisters on my hands from helping shovel muck out of areas affected, but our kids are still going to be paying to give these people blank cheques to rebuild their lives from money that just isn’t there. Wake-up calls always seem heavy handed, but lets go after the the approval parties and developers who should have known better in the first place.

    • Well said Mark. Years ago we bought a house close to, but not on the river. My husband said exactly what you said, this is a flood plain, that means it floods. I responded with a Pollyanna comment, on no it will never happen here. Luckily we were transferred before the flood of 2005 and didn’t have to go through the agony of clean up and rebuilding. What floored me was how many of our neighbours not only rebuilt but expanded their homes on the very same spot that had been ruined in the first place. Your comment that we go after the approval parties and developers is the right approach. Thanks and welcome to the Soapbox.

  17. Shorty says:

    I honestly don’t think we as tax payer that weren’t affected by the flood. Be paying for the rich people I don’t think so they should be paying for us. Them people got rich off of us tax payers, so really that is a good point. So like those people that lost million dollar homes they should not be complaining or anything like they have more money then anything and they want ours. Lol no way

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