Proceedings of the Subcommittee on
Canada's Emergency and Disaster
Preparedness
Issue 4 - Evidence
OTTAWA, Wednesday, June 16, 1999
The Subcommittee on Canada's Emergency and Disaster Preparedness of the Standing Senate Committee on National Finance met this day at 5:30 p.m. to examine Canada's disaster and emergency preparedness.
Senator Terry Stratton (Chairman) in the Chair.
[English]
The Chairman: I call the meeting to order. Our first witnesses today are from the Canadian Red Cross Society. They are Don Shropshire, John Mulvihill, and Jean-Pierre Laroche.
Please proceed, gentlemen.
[Translation]
Mr. Jean-Pierre Laroche, Chief Operating Officer, Canadian Red Cross Society: Mr. Chairman, in the last ten years, we had several huge disasters in different regions of the world. Canada was not immune from it. We had the Saguenay flood and the Manitoba flood, the ice storm and the forest fires.
The Red Cross is a leader in disaster preparedness. Over time, we proved our capacity to muster the experts, paid staff and volunteers, and to make them work on disaster prevention. But our real hallmark is the particular attention we give to the human side of the equation.
Mr. Chairman, I am very happy to introduce two of our experts in disaster prevention and management, John Mulvihill and Don Shropshire, who will be making a short presentation and will then be happy to answer your questions.
[English]
Mr. John Mulvihill, National Director, Disasters Relief and Prevention Services, Canadian Red Cross Society: We would like to begin our brief presentation with a very short video. It is a video presented by the International Federation of Red Cross and Red Crescent Societies, an organization of which the Canadian Red Cross Society is a proud member of the International Red Cross family. It is the 1999 World Disaster Report. It speaks to the context of the discussion that we are here to present to you this evening.
(Video presentation)
Mr. Mulvihill: The Canadian Red Cross Society strongly endorses a strong national preparedness and mitigation strategy for this country. Disasters do not just happen in far-flung reaches of the world; disasters can -- as we will see in this presentation and as some of you are all too familiar with -- happen right here in our own backyard.
The purpose of our presentation today is to zero in on the human side of this equation. We believe that, by focusing on disaster preparedness and planning, we will minimize and reduce losses on the human side of the equation. Our goal today is to help put some framework before you, for your consideration, so that we can prevent suffering by building the capacity of individuals, families, and communities as we prepare for inevitable disasters.
The type of costs that disasters create places a huge burden on the individuals and the governments affected by natural disasters, governments in particular who must support the individuals and communities that have been impacted by tragic events. As you can see from the World Disaster Report video, disasters and the cost of disasters are increasing rapidly because of the changing environment of our global community. We do not wish to address the fiscal impact of disasters today; instead, we wish to stress the importance of mitigating social losses and associated sufferings. We believe we can speak to that issue as a result of our involvement with the worldwide movement of the Red Cross family. That family consists of 175 other countries who have a role and responsibility in providing assistance to individuals in time of disaster and in assisting communities in preparedness training. We have been doing this in Canada since 1909.
The international Red Cross network provides for mutual support and sharing of a tremendous wealth of experiences. In the past 10 years alone, the Canadian Red Cross has sent over 2,500 relief workers to support many of the disasters that you saw on the video, and many disasters similar to that. The experience of these relief workers has been reinvested right here in our own country, with expertise gained on the international front being brought to communities such as the Saguenay and the province of Manitoba. We also deployed hundreds of Red Cross volunteers and staff workers to support the efforts of the Eastern Canada ice storm as well as the Swiss Air crash relief effort most recently in Eastern Canada. Of course, the Swiss Air crash was not a natural disaster.
Today, we are involved, through our network of Red Cross volunteers and staff, in supporting the Kosovar refugees. We have over 5,500 active volunteers deployed in the seven sites throughout Ontario and Atlantic Canada.
What do you think the locations I am referring to here have in common? Each of these locations has suffered a major disaster that prompted a review of the local disaster mitigation and preparedness plan. Unfortunately, though, few countries learn their lessons from either disasters that have happened in country or disasters that have happened in other countries. With the exception of Y2K preparedness here in Canada, disaster preparedness and mitigation efforts rarely occur prior to a major disaster. Again, this comes from the basic thinking that, much as an accident, it is only a word until it happens to you.
We would be pleased to provide you with copies of the Disaster Report. The copy we have with us today is the only one available at this time in Canada. However, others are immediately available through our Geneva office, and we would be pleased to secure a copy for you. The Disaster Report speaks to the important future, where there is a clear trend that disasters and demographic shifts and impacts of demographic shifts will create larger and larger concerns for developed and underdeveloped countries. The Insurance Bureau of Canada and Environment Canada support these projections. Hence, we believe clearly that to initiate disaster mitigation and preparedness activities is critical in the reduction of the impact of the unfortunate and yet here-to-come events
Canada can indeed benefit from our lessons learned through our international experiences. When a disaster strikes, we advocate that care should be taken to ensure that, wherever possible, relief assistance improves the capacity of affected individuals and communities to respond to future disasters. An example of this would be the appropriateness of simply providing resources to do a cleanup after a major flood rather than the investment of flood-proofing or the relocation of certain dwellings because of the inevitability of future floods in a particular area.
We also know that the most cost-effective way to prepare for disasters is to build on the capacity of individuals, not only on infrastructures, but individuals, families, and communities, to mitigate and respond to local risks. Simply by preparing for local risks and being familiar with local risks reduces the very opportunity for risks and their eventuality.
Local governments should remain responsible for overseeing disaster mitigation and emergency preparedness activities. However, we believe, and I believe we are supported by local governments, in suggesting that it is highly desirable not to try to do it alone. Rather, we believe in enlisting the support of other levels of government, organizations such as the Red Cross and our partners and other volunteer organizations, and the corporate and private sector in providing support for personal-preparedness education, local-disaster planning and disaster-mitigation efforts.
Sadly, today in Canada there is not an epidemic of emergency planning and mitigation. There is not that mentality. Emergency Preparedness Canada reports that approximately 50 per cent of our communities have a disaster plan and that only 20 per cent of our communities exercise their disaster plan on a regular basis. Local disaster planning provides the important building blocks of emergency preparedness. Without more attention in this area, we will continue, in our opinion, to experience needless, widespread suffering and losses because of disasters.
Canada is not immune from disasters. The Red Cross has responded to hundreds of domestic disaster responses, dating back as early as the 1917 Halifax explosion. Every region of the country is vulnerable to disasters. Complacency in emergency preparedness and disaster mitigation is not an option that we should live with in this country, and it is not an option without the risk of death, suffering and destruction.
The recent disasters in Canada are likely a large part of the motivation of your committee's work. These events have served as a wake-up call in certain respects to governments, disaster-relief organizations, and to the general public that disasters do indeed occur in Canada.
Mere numbers and statistics fail to capture the suffering and loss that each of these disasters has inflicted upon Canadians. More than 3 million Canadians have suffered because of disasters in the past three years alone. For them, the cost of learning that disasters do occur in Canada and that we must prepare for these events, because the costs are far too high, is only too real.
As Red Cross workers, we have witnessed firsthand the suffering of people. We work hand in hand with individuals who have lost loved ones, who have had their homes destroyed, and who have had to face the challenge of rebuilding their lives following disaster. Our workers are touched by these tragedies, as we do work closely with the victims. It is for this reason that we advocate so strongly that preparedness and mitigation training is so important for this country.
Governments must take the responsibility to coordinate disaster planning and preparedness. The Red Cross is prepared to support this effort by sharing our lessons learned and by supporting the local authorities in developing and implementing their local emergency-preparedness and disaster-mitigation activities.
The Red Cross was mandated by the Parliament of Canada in 1909 to assist in work for the improvement of health and the mitigation of suffering throughout the world. Time has not changed our mandate or our mission. The role of the Red Cross in disaster relief was reaffirmed in 1970 with the approval of our letters patent under the Canadian Corporations Act. We would welcome the opportunity to expand our role, to serve as an auxiliary to government in disaster-mitigation preparedness and relief, as one of our primary priorities in Canada.
Since 1996, the Canadian Red Cross has raised over $67 million to provide for domestic disaster relief and mitigation. On an annual basis, we support disaster preparedness to the tune of $3 million of Red Cross contribution. However, the greatest contribution we bring to the table is in the strength of our volunteers, over 9,000 of whom have provided essential services during the very most recent disasters.
As reported in the World Disaster Report video, if more resources were targeted at disaster mitigation, fewer resources would be required for relief. The true savings would be on the human side of the equation, a reduction in lost lives and human suffering.
Mr. Don Shropshire, National Coordinator, Disaster Services, Canadian Red Cross Society: I would like to discuss some of the opportunities that we believe can be taken or realized to try to address some of the issues we have just discussed. The concept of building a culture of disaster preparedness within Canada is becoming more widespread. Partly because of the efforts of the Insurance Bureau of Canada and Emergency Preparedness Canada over the last year, there has been an effort to develop a national mitigation policy. This is one of the key concepts that came out of the work over the past year.
We believe that, in the following ways, we can play a particular role in supporting governments and industry to try to develop this culture within Canada.
The first is personal preparedness education. We believe that putting in the hands of Canadians the essential basic information that they need to prepare themselves and their families is critical for them to be able to take care of each other should a disaster occur.
Second, we believe that basic information should be invested in our future through the school system. We have information that, if it were shared with our school-aged children, it would be critical in building their culture over time so that eventually all Canadians would understand what they had to do, what the risks are in their community, and how they should assist each other should a disaster occur.
Lastly, the concept of disaster planning. Mr. Mulvihill read to you some rather alarming statistics, that only 50 per cent of our community currently enjoy having a local disaster plan. We do not believe that is good enough. Increased efforts must be made in that area so that disaster planning and training is widespread across Canada. We do not want to wait for a major catastrophic event for a disaster plan to occur.
We are not pretending that we can do this unilaterally. One of the other themes that has arisen in discussions over the last year on mitigation policy is the concept of working together in a multidisciplinary team. This is a very complex problem. It requires a great deal of resources. Some of the most encouraging things that have come out of the last year is that private industry has stepped up to the plate along with the voluntary sector and governments to develop this policy together. It is only by working together that we believe that these things will take place. We must ensure that clear role definitions, that everybody knows what their role is on the team. We encourage these different groups to take parts in that role.
Let us not kid ourselves. Personal preparedness is a long road ahead. We do not believe that there is a personal preparedness culture that has caught on in the country yet. We can cherry pick certain communities that have a high level of preparedness, and they are the communities that have experienced a widespread disaster. If you talk to the folks in southern Manitoba who experienced the flood, they understand what it means to flood-proof their homes. They understand the suffering. The same thing with respect to the people in the Saguenay or the people involved in the Eastern Ontario ice storm. They understand what personal preparedness means, but they did not have the basic information that they needed prior to the disaster hitting. Most people were not thinking about it. We need to make sure that people have basic information in advance, that it is presented in a way that makes it possible and cost affordable, and in a way that will enable them to use that information to make a difference, in terms of survivability and their capacity to help each other.
We also found that there was a very high level of reliance for basic needs on relief agencies and governments. People did suffer during the ice storm. Millions of people were affected; hundreds of thousands were displaced from their homes. There were similar circumstances for those people who were involved in the other disasters we talked about. Had they had an increased level of preparedness, their personal capacity to respond, that suffering would have been greatly reduced. We want people to have that basic information.
As a result of these recent disasters, people want the information. Recent polling over the past two years indicates that people have increased their level of awareness and motivation to receive this information and do something with it.
Personal preparedness is another term for social marketing. In other words, we are trying to change someone's behaviour by providing them with increased awareness and an education that will allow them to take proactive steps to change their behaviour in a way that will better prepare them to respond to the disaster. It is not rocket science; it is basic information that everyone can handle. It is providing the support systems and the tools so that everybody has that available to them.
When we talk about a social-marketing plan or where we will target our energies, we like to draw attention to the fact that there are populations that are more vulnerable than others. If we are serious about making a impact, we must target our resources to those who are most vulnerable -- some of those identified in the slide, for example, the elderly, children, people with low incomes, new immigrants who do not understand how the social system works, or individuals that have proximities to risks. We must be sensitive to the needs of those people. We must help those who are most vulnerable receive the assistance first.
We think Y2K mitigation planning is a good example of a plan that is working to change people's behaviour. Over the past 18 months, we have all been inundated with a phenomenal amount of information about Y2K. Industry Canada has sent out pamphlets. Numerous media people have done in-depth stories. There is hardly a Canadian who would not understand what Y2K means and the Year 2000 preparations. Some of them may feel it is a more urgent need for them to deal with, but certainly awareness has been raised in a way that few other disaster preparedness plans would have reached the public.
We have done some things in this regard. We are using this as an example of how we might use a similar plan to deal with other types of disasters. We have produced a series of important messages in consort with the federal and provincial governments. We wanted to make sure that there was consistency in the key messaging. That is essential in any social marketing plan. We cannot have the provincial and federal governments saying one thing, the Red Cross saying something else, and the media promoting a different story line. We need to be united, so that, as a group, we are providing the public with information that they can use.
We have also provided some information on our Web site that is cost-effective to use. We have distributed information through corporate and government partnerships. We have also done a series of exercises to test our capacity. Certainly a lot more could be done. However, this is a good example of disaster preparedness in action. It could be modelled in future disasters.
In terms of partnerships and not doing it alone, we wish to emphasize the importance of leveraging our partnerships. An example of that is the "Be Prepared, Not Scared" brochure. In co-operation with Emergency Preparedness Canada, The Bay, Zellers, Homemaker's and Madame au Foyer magazines, we were able to produce 1.2 million brochures for circulation across the country this spring. That brochure is the type of basic awareness-building material and basic education that we believe needs to be in the hands of all Canadians. We cannot keep these in stock. They are flowing out. We are receiving hundreds of calls every week from Canadians who want more of these materials.
We would like to explore how that mandate could be expanded. A lot of work has been done in disaster planning and in the relief area. However, regarding preparedness and mitigation, we are touching the tip of the iceberg. We could do a lot more. That is the most cost-effective way to deal with these types of disasters.
The media is important to any future increase in public awareness. Every time we have responded to a major disaster, the media has been front and centre delivering preparedness information and talking about and covering the story. Unfortunately, the same level of activity has not occurred prior to the disaster. We would like to find a way to enhance the partnership between the media and the disaster planners and organizations such as ourselves to make sure that a hungry public that wants the information receives it in a timely manner from a credible source. If the media can help do that, we will all be better off.
People want information through prime time television. At the national mitigation conference held last December, it was identified that people want to receive disaster preparedness information in two ways: one is television; the other is that they want it brought home through the school system.
Our next slide discusses investing in those future Canadians who will be in a position to influence change. I am not sure if you have had an opportunity to review your background materials, but what I am showing you is an example of materials produced following the floods. It was developed for three different grade levels within the Province of Quebec and subsequently distributed. It not only deals with some of the emotional and psychological impacts that were felt following the disaster, but also provides the skill sets and the comfort that they can respond to a future disaster and not have to be frightened. They have the right information. They begin with awareness and risk awareness, and it develops into community plans for their schools and others. That is the type of thing we are talking about when we say that we need this in the schools.
Of interest also is the fact that this information has been integrated into the existing curriculum. Hence, in every lesson plan you have a reference -- history or geography or any of the other curricula that are currently developed. It does not mean introducing a whole new course. It can be easily integrated in a cost-effective manner.
On the preparedness side, there is some work to be done. An example of that is Standardized services and training. Across the country, the federal and provincial governments do collaborate on disaster standard-setting and training. However, there are many jurisdictions and each has its own approach on how to deal with things. As we take a look across all 10 provinces, all three territories, as well as the thousands of municipalities, if there are multiple variations in the way people want to handle these services and the delivery of them, it becomes increasingly difficult to share resources, expertise and common training programs. There must be a happy medium between the standardization of training as well as the ability to respond to local unique needs.
The Sphere Project was developed with the International Committee of the Red Cross. It provides standards and guidelines for the development of disaster relief in disaster situations around the world. This was partly funded by the federal government. CIDA provided a contribution. We are now embarking on training within Canada and looking at how we can use this to build Canadian-wide standards and training programs. That would be done concert with local, provincial, and federal governments.
Senator Bolduc: Is that available in both languages?
Mr. Shropshire: Yes. It is available in Spanish as well, for the benefit of our multilateral trade delegates.
We need to ensure that the training program does not just deal with government training. There is extensive work being done on a national training strategy, but heretofore that has not included industry or the voluntary sector. There is a huge wealth of experience that we need to draw into the table to maximize the training capacity. There are opportunities to do that in a cost-effective way.
Mr. Mulvihill talked about building local capacity. We will offer a few examples. If we look at the concern that we have expressed with regard to the 50 per cent of communities that do not have ready their disaster plans, we can go to school on a model from the United States. The U.S. federal emergency management agency and the American Red Cross have collaborated to co-fund disaster planners that are out within each community building those disaster plans and testing their exercises. There are ways that we can share our resources, although they are limited. We are not suggesting that anyone has an unlimited pocketbook. However, the example I just gave is a unique example of how, in the U.S., they have been able to share the cost for doing critical disaster planning and preparedness at a community level.
The American Red Cross has also developed a series of workbooks where they can have their local offices work with their local governments to do a plan to address the local mitigation requirements. Those are cost-effective ways to bring volunteers in the community together to do disaster planning and preparedness. The workbook I have here is an example of that. It is relatively inexpensive. It would involve about 50 pages of photocopying. I would like that to be in the hands of the communities that do not already have a plan.
The disaster video also showed the concept of needing to target relief monies and having them do the work of reducing future vulnerabilities. One of the things we are looking at is the concept of earmarking relief budgets. Both from the corporate sector and from the public sector, people are willing to give money immediately following a disaster, but trying to wrench money out of very tight budgets in between large disaster is really tough. The concept of earmarking a portion of those funds that are normally targeted to relief and putting them into long-term mitigation and preparedness projects in the long run would certainly do much more good to reduce the suffering and the loss of human lives.
We have two principal recommendations and a couple of sub-recommendations. We recommend earmarking some of those monies to do the following things. Personal preparedness. It is, for example, getting a pamphlet like the one I am holding into the hands of every Canadian. If we can develop the resources to provide 1.25 million copies within a two-month period, imagine what we could do with a larger network, or if we brought more partners to the table? It is not a large reach to see this information in every Canadian's hands.
Developing standards and training. It is a matter of continuing the work that has already begun by the federal and provincial governments to make sure that there are national plans for standard development and training programs. It also means ensuring that every community in Canada has a disaster plan and that it is exercised on a regular basis.
We recognize that the provinces are principally responsible for the education programs. However, a recommendation from this committee to include the development of a curriculum through which all Canadians could benefit, the same as the Province of Quebec or those in the Saguenay region have, would be a great start to ensuring that everyone had the essential information they required.
We made several references to the human equation. It is taking those basic building blocks and adding them together so that what we come up with in the end is a reduction of human suffering and loss of lives. Those are the key elements that we are trying to propose to you today in terms of our recommendation.
We believe that, by taking these things on and by implementing them, we can make a large difference in people's lives.
We would be pleased to answer questions you may have.
The Chairman: What makes you so convinced that global warming has and is taking place? There are those who argue the contrary, that what is happening is that we are moving through a weather cycle -- whether it be a 17- or 40-year cycle.
Do you have data or information that assisted you in arriving at the conclusion that, indeed, what we are experience is not just a weather cycle?
Mr. Shropshire: The information that we have received and are reporting to you came from two primary sources. One is the International Committee of the Red Cross. The World Disaster Report has considerable documentation and references related to that very question. I would refer you to those references.
In addition to that, we have over the past year participated in the national mitigation policy development, and Environment Canada spoke to the issue quite clearly in terms of the changing weather patterns.
Whether this is an aberration or a change in our climate that occurs every 10,000 or 100,000 years, or whether it is the environmental impact of pollution, I cannot begin to volunteer a comment on that.
We do know, however, that this is clearly the warmest century on record and the warmest 10 years on record based on the data we have received. We also noted the increased severity of disasters, whether it is El Niño that is causing that or global warming. The statistics that we are looking at say that 500,000 to 5.5 million people are affected by floods. In every category of disaster, with the exception of earthquakes, we have an increased severity and increased frequency of disasters around the globe.
[Translation]
Senator Ferretti Barth: You will have to excuse my English and my French because none of those languages is my mother tongue. I hope you will understand me.
I really appreciate your being with us today and bringing documents. I looked quickly through them and I can see that your concern is with public education. You talked about people at risk and vulnerable people. You talked about children and you talked about the public in the social context, but I did not notice in your presentation a real concern from the Red Cross for seniors and cultural communities particularly.
I experienced the ice storm in Montreal. During that event, as the founding member and the chairperson of the multicultural centres that account for 12,000 members on the island of Montreal, we were, all the volunteers and myself, phoning everywhere to try and find interpreters; we had to run here and there because there was nobody from the Red Cross or the armed forces that spoke the language of those cultural communities. Those people were terrorized by the events. It is not only a language problem, it is also a cultural problem.
We know that in the western part of Montreal, an arab couple did not come out of their house when the military told them to do so. They closed themselves in a cabinet and they died of suffocation because for them, in their country of origin, the uniform is a threat.
There are so many people coming from different cultural communities in Montreal, in Quebec and in other areas. I must tell you that I belong to the Comité de Parents-secours. This committee is active in the school environment and volunteer parents become when needed the parents of a child whose real parents are not there. We call that Parents-secours.
Why do we not have the same kind of groups with volunteers only? People are willing to do that and you could train them. That way, you could reach everybody, because each person in its own little spot along the street knows the others. If something happens and the person is informed, he or she will go to the others. If there is a Chinese group, how can we get to them? If you have a neighbourhood committee and if you can contact the leaders, you have immediate access to that population and you can communicate with them. You also mentioned that the population is getting older and older. We have more and more immigrants here and we have a lot of problems with those people.
Your presentation is in French and in English, but where can we find the funds for the different community centres to have those information documents translated into the language of their community, or to have them translated into the three predominant minority languages in Canada.
That to me would be prevention; that would save lives and avoid a lot of suffering. There is already enough suffering in Canada and all over the world.
You mentioned 9,000 volunteers. How are you going to train those people? What program do you access to get the necessary funding for that training?
When you are a Red Cross volunteer, you might be a voluntary for 5, 10 or 15 years, but what economic benefit is there in it for them, apart from old age security?
Monique Bégin said to me one day: "If you are a volunteer one day, you remain a volunteer all your life." But at one point, volunteers cost money; we have to pay for their training, their expenses, their transportation costs, et cetera. Where does the Red Cross get the money to train its volunteers and give them the necessary tools to deal with those situations?
[English]
Mr. Mulvihill: To address the concern that you mentioned regarding our preoccupation with vulnerable groups, you cited that you did not necessarily see us indicate an interest or a target group such as the senior population or new Canadians. In fact, we did make specific reference to those groups and we do pay attention, where we can and where we have the resources, to these sectors. We do not have unlimited funds and unlimited resources. I will be the first to admit that. Doctor Laroche will be the first to prove it to you.
We are developing new associations, new relations, to address these specific sectors. In metropolitan areas such as Toronto, Vancouver, and Montreal, you noted that our material that you are seeing is in the two official Canadian languages. In these communities, we have worked with different community groups to bring in new languages as well. Some of our training material, for example, is now in Mandarin and Cantonese. We are trying to expand this area.
We are also trying to draw from the new Canadian population more and more of our volunteer base. We have been extremely successful in this regard. For example, in one of our programs in Western Canada, we can provide our training in not less than 27 languages, where we have recruited volunteers from the different communities to take our training and to be able to transmit our training in the multitude of languages. However, this is not in disaster preparedness. This is in the area of abuse prevention services, an announcement most recently noted on CBC when Sheldon Kennedy donated to the Red Cross his monies from his foundation. That is an example of one of the things we do.
Your reference to "Where were we?" in the ice storm in Montreal, in your particular area of interest, and the dreadful example that you cited about the individuals who froze because of lack of awareness is exactly why we are advocating a much stronger and a much more predominant methodology by which all Canadians, new, young and old, can receive the benefit of disaster preparedness training. The Red Cross, with its meagre resources, can only do so much.
This is why we are inviting a larger role, a role that is supported by federal and provincial funding, so that we can use our massive network, which we are fortunate to have, to do an even better job.
Our volunteers are a Canadian treasure, I do believe. The people who come to Red Cross, who come to volunteer at a time of disaster, do not necessarily work with us all year long. For example, in Atlantic Canada right now, there are 1,600 brand new volunteers who have come to the Red Cross because we asked them to assist us in receiving the Kosovars. This is the amazing beauty of the Red Cross in asking people to come and to provide assistance in a neutral and humanitarian fashion to people in need.
We have a very regimented process of screening individuals, of ensuring that they understand the principles and the code of conduct within which the Red Cross functions. We have a high level of expectation when people volunteer to work with the Red Cross. We are attentive to the amount of time that individuals can invest, and we try to discern what is their area of interest primarily. We try to match their area of interest with our specific needs in order to have the job done. We are very successful in the way that we do this.
We take good care of our volunteers. We do not pay them; however, we provide them with lunch, as you mentioned. We also provide them with kilometre expense for them to come to our location.
The wonder of volunteerism in Canada, as you well know, senator, being the president of that association, is that you do not receive funds for that. You do it through the goodness of your heart. We are lucky in Canada to have this type of terrific Canadian attitude to come out and volunteer. We believe that, by providing these individuals with quality training, they are enthused because they can see the benefit of their efforts in helping other Canadians.
Senator Fraser: I noticed that the video did not include our ice storm. Does that mean that it was not a world-class disaster? That is not a facetious question, because if things are becoming worse obviously what I am envisaging is warning Canadians that they have not seen anything yet. Or was it the luck of the draw?
Mr. Shropshire: The reality is that it was a bit of both. It was large in terms of the number of people affected, but it was not large compared to some of the other disasters where there is loss of lives and human suffering. It was of a relatively short duration.
Your words, I hope, are not prophetic, but I fear they may be.
Senator Fraser: When you engage in public education about disaster preparedness, have you any sense of where the greatest area of public ignorance lies?
Mr. Shropshire: The largest need for education is that people do not believe it will happen in their community. It is a lack of awareness. Once people believe a disaster can strike their community, most people will take basic steps to prepare themselves and their family. Until you have faced an ice storm or a Manitoba flood, you do not believe it can happen. Canadians are fortunate that there have not been disasters in the same location, with the exception of some of our flood plains.
Senator Fraser: Most of the steps you recommend, all of which seem to make eminent sense, rely essentially on provincial jurisdiction. This is a federation and we know how closely the provinces guard their jurisdiction. What would you see as the prime responsibilities or the prime opportunities for the federal government in this area, apart from giving you money?
Mr. Mulvihill: The arrangement between the federal government supportive disaster response and the provinces is the vehicle by which certain incentives could be created. It is in this area that we are suggesting the earmarking of a percentage of the dollars that are spent historically from federal dollars, passed down to the provincial levels for assistance, that an incentive program or some sort of percentage of that annualized amount be set aside on the condition of preparedness education, mitigation trend.
[Translation]
Mr. Laroche: You mentioned the main weakness, if you will, the leadership issue. There will have to be some leadership somewhere. You cannot rely on the individuals; you need a leadership. Presently, the resources are spread about because the responsibility is with the municipalities. Maybe we could have incentives, as was suggested.
Senator Ferretti Barth: You talked about Western Canada, if I understood correctly, where the documents have been translated into 20 languages. But in Quebec, what effort did you make? What do we have in Quebec? What do you do for Quebec? Quebec is the province where we have the most immigrants from all the different parts of the world. Walking the streets in Montreal, you may wonder where are the francophones, where are the Québécois.
So what did you do for Quebec? What did the Red Cross do for the cultural communities? Those are individuals that would suffer immensely from disasters.
Mr. Laroche: Mr. Mulvihill tried to explain earlier that when you talk about disaster response, and when you take the ice storm as an example, the Red Cross was in the same situation as the governments and the other organizations. The money the Red Cross gets for disasters comes from the public. This money is given us to respond to a disaster and not to prepare for it.
Senator Ferretti Barth: I think it is a mistake. The Red Cross should do more now than to prepare itself. It should start thinking and getting ready before a disaster hits. In English, they say: "Plan for the worst, hope for the best."
Mr. Laroche: I agree totally of course. That is why we are here today. We think that we have a very important role to play for preparedness. But I have to tell you that the money we get from donors usually comes in response to a disaster that has already happened.
Therefore, as an organization that depends on public funding, we have very little money for preparedness. We circulated documents that tell you what we did. We tell you that today we need far greater means, be it from the public or the governments, to play that role that is very important.
Senator Ferretti Barth: You got the Kennedy donation, did you not?
Mr. Laroche: That donation was specifically made for abuse prevention. It is not for disasters. That money will be given in trust, and for each trust, we create a budget, a project, a plan and we spend the money according to the wishes of the donators.
Senator Ferretti Barth: Try to understand me. Let us say you do not have any more money, and you have that fund and there is a disaster. You have the money from those people, and you will let the disaster victims die because you cannot draw from that fund?
Mr. Laroche: That money is given to us by people, in trust, and we have the obligations of a trustee. We could always ask Mr. Kennedy to allow us to draw from that fund and use it for the disaster.
Senator Ferretti Barth: There. That is what I wanted you to tell me.
Mr. Laroche: We of course do that.
Senator Ferretti Barth: I would even be ready to help you write that letter.
Mr. Laroche: Then, we will ask for your services.
[English]
Senator Cook: Your recommendations are very practical and achievable. However, you talked about the mitigation process with respect to those who are vulnerable. In Newfoundland, the elderly, children, and immigrants are not equipped to access Web sites, et cetera. I just wanted to make that comment.
My question is: Who do you envision the stakeholders to be in the creation and the implementation of such a plan? Who do you see as the stakeholders?
Mr. Shropshire: In terms of a local community plan or a disaster plan, the community can be defined by a local town. I have been in coastal towns in Newfoundland, in central Newfoundland and in St. John's, providing that type of training. The stakeholders are the community residents themselves. It could also be the new immigrant population, as the other honourable senator mentioned.
Senator Cook: I am thinking in the broader sense of a disaster plan with federal and provincial governments and volunteers and municipalities. Who do you see as the stakeholders in such a plan?
Mr. Shropshire: The principle stakeholder becomes the local community with the provinces and the other national or federal organizations providing resources and expertise as they are required. The communities themselves, provided they are capable of so doing, are responsible for developing and administering the plan. Only as a last resort would you try to change that.
Senator Cook: So you would not go in and take over?
Mr. Shropshire: We have found that counterproductive. We have provided resources, but that would be counterproductive in our experience.
The Chairman: Thank you very much. That was an excellent presentation. Although there were not a lot of questions, the presentation was very informative and in depth.
While we are waiting for the next group of witnesses to come forward, honourable senators, we were given a list of potential witnesses by the clerk. We will be coming back in early September for more hearings of this committee. I would suggest that you look at that list and submit to the clerk those groups that you think we should hear from.
Mr. George D. Anderson, President and CEO, Insurance Bureau of Canada: I am the President and CEO of the Insurance Bureau of Canada. With me today is Mr. Grant Kelly and Mr. Mark Yakabuski.
We are here today to talk about disaster preparedness and mitigation. Some of you may know the background of the Insurance Bureau of Canada. We represent Canada's home, car and business insurers. There are over 200 companies in Canada competing in this marketplace. The Insurance Bureau of Canada represents about 90 percent by premium of the members in the property and casualty insurance industry.
Last year we paid approximately $13 billion in claims to Canadians to repair homes and vehicles, to replace stolen goods, and to rehabilitate insured accident victims. That total includes approximately $1.5 billion paid for the victims of the great ice storm of 1998. In fact, three of Canada's four most expensive natural disasters have occurred since 1996. You made mention of them earlier today: the Saguenay flood of 1996; the Red River flood; and the ice storm of 1998. The other intervenors were correct in saying that the ice storm, in worldwide terms, was not large in certain senses. As a percentage impact on our economy, it dwarfs Kobe and Hurricane Andrew in terms of the percentage impact on the American and Japanese economy. That storm was huge when you scale it and look at it in relative terms.
Our conclusion is that our disaster response and recovery system works reasonably well in this country. We have a lot to be proud of. It is not that it cannot be improved, but we do a pretty good job. These systems and improving them are going to become even more important in the future because there is evidence that these disasters are accelerating both in terms of frequency and severity around the world. Our climate is changing. Weather events are more severe. While scientists can debate the reasons -- and you had a exchange on that earlier tonight -- there is no doubt that, whether it is a cyclical pattern or a structural change because of global warming, we are in a period where weather is causing more problems for people. This is not a pattern that is going to change overnight. We are in this for a considerable length of time. It is important that we pay attention to natural-occurring disasters.
When you look at the growing urbanization of Canada, people crowding together, in our country they crowd in very vulnerable places. If geologists could have decided where to put people in this country, there would be nobody living in Montreal, Vancouver or Winnipeg, and, yet, there they are. People are crowding together.
Our infrastructure is aging and in many cases inadequate. Of course, the cost of goods and services is rising all the time in our country, with the result that you have a recipe for natural disasters with high dollar cost and consequences. Federal and provincial governments in this country and the insurance industry are among the best in the world for getting people back on their feet. That is a demonstrated fact. Canadians spare no expense to ensure the safety and security of victims and their property immediately following a crisis, again well demonstrated. The Red Cross gave you the figures -- 9,000 volunteers in these areas; $67 million raised. We help our neighbours. That is certainly the Canadian way and the Canadian tradition.
At the bureau, we say that we have to have a more visionary approach than simply being efficient at cleaning up after disaster hits the community. We cannot tame nature, but there are ways to lessen the impact on its furry. Enhancing our ability to manage our vulnerability to severe weather and earthquakes is very much in the national interest. We must place greater focus on prevention and mitigation. This approach has worked very effectively in the past.
The committee has been through the evidence of the Winnipeg floodway. That diversion ditch was built in the sixties amidst great ridicule at the time, great doubt that it would ever work. The argument at that time was that if we spend the money to do it now the payoff would be two to one. In other words, we will save twice as many dollars as we put into this project. People doubted it. In 1997, scientists tell us that when that great wall of water hit Winnipeg, 59,000 cubic feet of water a second was diverted around the city. That is an almost unimaginable amount of water being taken away from people and property, saving lives and of course diminishing destruction. That floodway has been used some 18 times since it was built to prevent disaster and the savings would be at least 20 times its cost by now. In 1997, hundreds of millions of dollars were saved because that diversionary ditch was there.
Another example of forward thinking and one that people find very interesting is our hail suppression effort in Alberta, and Calgary in particular. The hail storm in Calgary was the fourth largest natural disaster to occur. Close to $400 million in claims were paid out. Hail the size of softballs was falling out of the sky. It killed animals, and you can imagine what it does to houses and cars. We started to seed the clouds there with silver iodide particles. That reduces the size of the hail to very tiny hail stones. This summer, hail claims in the city of Calgary caused about $70 million worth of damage from a single storm. That sounds large, and indeed it is large, but based on the duration of that storm, where it hit and previous storms of the same magnitude, our estimate was that if we had not seeded those clouds claims would have been in the $400 million range. That program costs us $1.5 million a year to operate and saves an enormous amount, not only in insurance but in insurance premiums and indeed in damage of all kinds to Calgarians.
The Winnipeg floodway and cloud seeding in Alberta are good examples of what I call successful proactive approaches to reducing the impact of potential disasters. We simply need to have more examples like this in our country. With a small percentage of the money that is being spent on cleanup and recovery, we could invest in prevention. We have the knowledge to do it. What we need is the political will to make it happen. That is why it is important that this committee is meeting and pursuing this subject.
We accept our role in this area and, to that end, we have established the Institute for Catastrophic Loss Reduction. It is an organization dedicated to researching and implementing solutions to reduce the loss of life and property caused by severe weather and earthquakes. It is our hope and intention that the institute will help Canadians better anticipate and adapt to disasters. We want to mitigate and withstand them better than we do today. Last month, we were happy to see the University of Western Ontario and the Government of Ontario join with us in creating this institute and in funding it.
Another source of pride for insurers is our readiness to withstand an earthquake in British Columbia, something that was not the case just five years ago. That poses perhaps the greatest single threat to the country at the moment. It is not a question of "if" a major earthquake is going to hit Vancouver; it is simply a question of "when." On that, scientists all agree. The exposure is very well documented.
Indeed, in Canada in the last 20 years, we have had at least five major earthquakes that have registered 6 or higher on the Richter scale. We are fortunate that they have all occurred in relatively unpopulated areas of Canada. However, there is no doubt that inevitably there will be a big earthquake. Our estimate of the economic impact of an earthquake, of a magnitude of 6 or higher, in the Lower Mainland of British Columbia is that $30 billion of damage would be created.
The second most vulnerable area in the country, unbeknownst to most be Canadians, is the Ottawa-Montreal corridor, which is another major area where an earthquake could cause severe damage.
Since 1994, we have been working with the government to set standards of earthquake preparedness for insurance that now ranks among the toughest in the world. The insurance house is in order and, as I sit here today, insurance could cover claims made with an earthquake of 6 or greater on the Richter scale in the Vancouver Lower Mainland area. But who is preparing for the public cost of all of this? In an earthquake of that kind, what will happen is that bridges will collapse, sewer lines will break down, power lines will fall down, and there will be widespread fire. If any of you have seen the films of the Kobe earthquake two hours later, the most significant thing about it is that the entire town was on fire, from one end to the other. That is what will happen in a major earthquake in Vancouver.
We will be there, as will the Red Cross, the army and everybody else to help people survive that. But how easily will we recover when a city of that size is shut down for an indefinite period of time, when people cannot work and when, indeed, the economy is not working at all? Who is going to pay that cost? Our surplus projections, I suggest to you, would be blown to smithereens in an instant the minute we get an earthquake in British Columbia.
We need to take steps now to protect our communities against these kinds of realities. Nobody benefits if all we do is shift the burden from one responsible party to another. Hence, we have been advocating now for several months three recommendations that we would like government to consider.
The first recommendation is the creation of a natural disaster protection fund. Over the past three years in Canada, governments have spent about $500 million a year on recovery from disasters. They have spent nothing virtually on preparing to mitigate a disaster, on lessening its impact. It only makes sense to take some of this money and put it to use to reduce this constantly recurring expense that we are facing. We are asking for a pool of funds to fund projects of hazard prevention, not recovery from hazards. The example of the floodway shows that a small investment now can save hundreds of millions of dollars later on. There is currently no pool of funds like this available anywhere in the country. Currently, if a local municipality wants to improve its infrastructure to make its region less vulnerable to floods, there is nowhere to turn. There is no source of funds for projects to prevent disasters. There is no way to act on a good idea right now in this area. I have to say that I consider this to be a flaw in a disaster management system that is otherwise pretty good.
A key element of all of this is to ensure that necessary investments are made in Canada to shore up what I would say is a decaying urban infrastructure. Storm sewers would be a classic example. You are familiar with the flash food that occurred in White Rock last week. I am not sure that any reasonable system could have handled that amount of water in that period of time. There is no doubt, according to the mayor, that the infrastructure was sufficiently broken down that it exacerbated that problem. We are going to see more of that.
I would like to congratulate the government in the last budget on investing some money in the Manitoba Red River Valley. I think some $50 million was set aside to help recover from some of the defects of the system as we see it operating out there. That is the kind of investment that we need.
Second, we need to alter our existing disaster response and recovery program. The representatives of the Red Cross are right. The time to spend money on disasters is right after they happen, when people are sensitized to the phenomena. I suppose it is a great virtue of human nature that we carry on believing that these things will not happen, but they do. The time to react to them is as they are occurring.
We think that rebuilding communities in harm's way after floods occur, and this happens in the country, is not in the public interest. We should be taking a portion of the funds that we spend on recovery from that disaster and asking the community how could we invest to prevent a recurrence of this in the future, and do it right then and there when sensitivity to these things is very high. This is done in the United States after a disaster occurs and we think to very good effect.
Finally, the Red Cross has recommended, and we certainly concur, that we need to develop a culture in the country that thinks about disaster and disaster prevention, one that is more highly sensitized than the population appears to be to this matter. Public education in that respect is very important. We also think that every level of government, as it looks at infrastructure projects, ought to be seeking answers to the following questions: What is the risk-reduction aspect or risk-enhancing aspect of the project we are about to fund? Is there something we could do better or differently regarding the project that would help mitigate disasters in the future? We do it with the environmental impact of everything we do. Maybe it is time we looked at the damage impact from the viewpoint of a natural disaster as well.
Following the war, a great national enterprise was undertaken to build a social safety net that would be shared by all Canadians shared. That safety net is in place. It is it a hallmark of our country that we do that. We face another challenge now, and the challenge is that natural disasters are going to affect more Canadians more frequently and more severely than they ever have in our history. We can respond, in the same way we responded in the post-war era to the social phenomena, by responding with a national program that deals with natural hazards and their mitigation and prevention.
Mr. Chairman, thank you very much for allowing me to say these few words. My colleagues and I would be pleased to answer any questions you might have.
The Chairman: We appreciate your presentation, Mr. Anderson.
Senator Fraser: I would like to ask you something about the insurance system -- because, I confess, I know very little about the insurance system. I was struck by a line in the Red Cross video that said that the insurance industry is actually pulling out of whole regions. The Caribbean is the one they cited. That may or may not be accurate. We will get to that.
What do insurance companies cover now? Are there forms of disaster, forms of property that are excluded from coverage?
Mr. Anderson: Let me deal with the first part, which is that we provide insurance everywhere in Canada. We do not deny regions or places insurance coverage.
The one area where insurance is not widely available -- in fact, hardly ever available -- is flood. For any insurance program to work, certain characteristics are needed as a precondition. It has to apply to a large set of the population for which only a small subset at any point in time is exposed and the risk has to be sudden and accidental. If you are on a flood plain, none of those conditions occurs. You are a subset of the population. It happens very regularly. It is reasonably predictable. From that point of view, the only insurance programs that operate at all in the world to any widespread effect are government programs. They are not programs of indemnification. They are programs of entitlement; if you are in a particular area, you get government-sponsored help. Other than that, insurance will cover other forms of disaster, as we saw in the ice storm.
The issue is that you have to ask for it. The problem we have many times in the country is that people buy insurance by price, not by coverage. Hence, when they are required to have an insurance policy because they have a mortgage, they ask for the cheapest form of fire insurance they can get. That insurance is cheap because it limits the coverage.
For floods, for example, you can get an endorsement, a policy that offers you sewer backup coverage because that is one of the things that happens in a flood. You can get coverage for that, but you have to ask for it. The problem with is that people do not ask for it.
We have done extensive surveys that tell us that we need to engage insurance consumers more directly on this matter and educate them better. We have been doing that for the last three years under a policy called "Understand your insurance: Make it your policy." It is having a good impact.
Senator Fraser: This is difficult to do, understandably.
Mr. Anderson: Yes. Nobody wants to think about it.
Senator Fraser: Even when they do, the jargon is crystal clear to the industry.
Mr. Anderson: I would not even say it is crystal clear to the industry. It is it crystal clear to the courts, and that is the way most policies are written, although we do have plain language policies in the country. Many of the contracts are complicated, but the explanation of them from the broker or the company should not be.
Mr. Mark Yakabuski, Vice-President, Governmental Relations, Insurance Bureau of Canada: You will notice in the brief we have distributed that there are a couple of graphs that point out the number of claims that were actually treated in the ice storm of January 1998 and how that compares with the average number of claims that we would deal with as a whole industry on an annual basis. Almost 700,000 claims were submitted in the course of that ice storm, amounting to almost $1.5 billion, as Mr. Anderson said. It shows that the coverage our industry was able to give to people in the ice storm was fairly comprehensive. The number of people today who have all-risk policies for their homes, et cetera, is of a growing number.
Senator Fraser: What proportion would that be?
Mr. Yakabuski: I do not have an exact figure, but the majority of household policies today are of an all-risk nature. You will notice that, on an annual basis, our industry as a whole would treat about 500,000 insurance claims. In the course of the ice storm alone, we had almost 700,000 claims in this concentrated area of Eastern Ontario and Southern Quebec. It shows the kind of response and coverage that we were able to give to people.
Senator Fraser: Let me come back to floods. Another branch of your industry, although not your specific branch, has gotten very rich offering life insurance, yet we all die.
Mr. Anderson: Yes, and we can tell you when.
Senator Fraser: You can predict the arrival of Winnipeg floods with some degree of accuracy.
Mr. Anderson: Think for a minute about that scenario. Think how many people are involved and the fact that their homes flood on a very regular basis. Think what the premium would have to be in order for people to make a claim to keep that product line viable. It is simply not an affordable proposition because we price according to risk. When you have a very small population that is claiming all the time, then you have a situation where you cannot create a viable insurance program.
In New Orleans, there is one lady under their federal program who has made 17 claims on her house, almost every year, for huge amounts. If we were trying to run a private-sector program on that basis, you could not price that without subsidizing it from another line of business. Therefore, you would be asking others to pay for that cost. You would be asking, for example, drivers in another province to pay. Cross-subsidization is not the way in which we operate our business.
Mr. Yakabuski: This might not apply to all parts of Canada. I will give you an example of the economics of flood insurance.
Several years ago, the Alberta government asked our industry to look into the possibility of running some kind of flood program. Essentially, the calculation went this way. In order to make a flood insurance program viable in Alberta, we would have to establish an obligatory add-on to every household and property insurance policy in that province to the tune of approximately $1,000. Obviously, we said that no one in Alberta would be willing to pay $1,000 a year for a flood program when only a restricted portion of the population will ever have to face that risk. That is the kind of analysis that is always faced by a flood program. It is never delivered anywhere without government participation.
The Chairman: I understand that France has such a program. Have you looked at that kind of thing?
Mr. Anderson: Yes, we have. The secret of the French program is requiring communities to get up to a standard of flood prevention before the insurance is offered. In effect, a lot of the risk is taken away at the same time that the incentive is offered for the insurance. That is what makes that viable. There is a degree of cross-subsidization that occurs. As we said, are you going to ask every Albertan to pay $1,000 so that 10 percent of the population can claim. It would be a very difficult to do, I would think.
The Chairman: The woman in Louisiana has probably had her property bought out by the U.S. government. I know that is what they are doing.
Senator Bolduc: Most cities have zoning ordinances. I suspect that the flood areas are zoned in such a way that there are no building permits issued in those areas.
Mr. Anderson: In some cases.
Senator Bolduc: Is it working satisfactorily?
Mr. Anderson: The problem is that the zoning ordinances tend to grandfather the existing flood plains so that people who are there can rebuild because the ordinance came in after they were there. It works in terms of putting new structures on the site, but it does not work when people are flooded out and go back and rebuild because they are so-called grandfathered by the zoning by-laws.
Senator Bolduc: Do you see any responsibility on the municipality?
Mr. Anderson: Yes, I do. One of the things we have to do, if we are going to help ourselves here, is get people out of harm's way. You can all appreciate the difficulty that that entails and the resulting news coverage for the mayor and other officials when they attempt to move people whose ancestors three generations before them have lived on the homestead on a flood plain. It is very difficult to do.
Senator Fraser: I want to move on to earthquake insurance. You said that since 1994 the industry has worked with government to develop the toughest earthquake preparedness guidelines in the world for insurers. What are those guidelines?
Mr. Anderson: It is modelling that takes a look at potential earthquake levels to attempt to project the damage. We then look at our reserves to see if we have sufficient of them to cope with the issue. Several years ago, we did not. We had a shortfall in the order of $6 billion to $7 billion. Had an earthquake occurred, it is not that we could not have covered the damage but that we would have had to take it from reserves and from everybody else.
Through more aggressive reserving and more aggressive purchase of reinsurance from outside the country to cover this kind of risk, we have put the industry in the position where, if we have a large earthquake -- a one in 250 year-type or 500 year-type earthquake -- we can cover the damage that would ensue.
Senator Fraser: Are there any classes of property in B.C. that you will not ensure for earthquake damage?
Mr. Anderson: No, there are no exclusions of that kind.
Senator Fraser: Somebody suggested to me that homeowners have trouble getting it.
Mr. Anderson: No. If fact, homeowners automatically get it when it comes to fire following an earthquake because in the provincial legislation you have to have fire coverage as part of the offering. The greatest damage that occurs in an earthquake is fire. It is not the shock.
Senator Fraser: The roof could fall in, even if fire does not happen.
Mr. Anderson: But that is less of a risk than the fire risk.
Senator Fraser: You cover the roof falling in, though?
Mr. Anderson: Yes, you can buy that coverage, and it is not withheld.
Senator Fraser: Is it priced so that most people take it?
Mr. Anderson: Most people can afford it. Whether most people take it is another question. Again, the problem is people look at price. As you heard from the Red Cross, people discount the possibility of disaster and they say, "I am only buying for a year. It may be going to happen, but it will not happen this year. Give me the cheap policy."
Senator Fraser: Could you provide us with some plain language illustrations of the cost of various kinds of insurance and, in particular, in high-risk zones? Earthquake protection in Saskatoon may not be a big problem. Other kinds of protection may possibly be a problem in Saskatoon.
Mr. Anderson: Yes. We will take the major categories of problems and give you the price equation in various regions of the country.
The Chairman: Have you established a reserve for an earthquake event in British Columbia?
Mr. Anderson: Yes.
The Chairman: You are in the process of building it?
Mr. Anderson: Yes.
The Chairman: When you talk about a protection fund, do you have a number in mind, on an annual basis, that we could build a reserve to?
Mr. Anderson: We have used the figure of a minimum of $100 million.
The Chairman: Annually?
Mr. Anderson: Yes. Let us assume that you are spending on average $500 million on clean up. If you use the example of the Winnipeg floodway, in terms of the cost-benefit ratio, the leverage of that $100 million would be many times that, not to mention the jobs and other spin-offs that occur.
The Chairman: There is talk of having to expand the floodway. It is a number like $700 million.
Mr. Anderson: You would have to do a bond issue for that.
The Chairman: I would think so. Senator Ferretti Barth asked a question of the Red Cross and I think it is appropriate that that same question be asked here. For those immigrants who do not speak English or French, do you have ways of communicating with those groups?
Mr. Anderson: We do. We have policies and people in the brokerage community who deal in the local neighbourhood. I could take you to Montreal neighbourhoods and show you brokers and agents who deal in the language of choice in that neighbourhood. Do we do enough of it? Probably not. But service is available in the language of the customer in most cases in our communities.
[Translation]
Senator Ferretti Barth: I am talking about Montreal. Those insurance companies pay commissions to their brokers. Recently, people have been coming from all the different countries of the world; therefore, their French or their English might be impossible to understand; their mother tongue could very well be Hindu for some of them. Contacts with those people are very difficult because you have to take into account the fact that they might come from countries where they do not have that kind of preventive insurance and they do not understand the concept. So imagine, with the last waves of immigrants that came to Montreal and that scattered about. Maybe they went to settle in the old port of Montreal, in Notre-Dame-de-Grâce, in Lachine, in old houses where the rent is cheaper. How can you cover those people? How can you insure them so that they do not lose everything?
You know, it really hurts me. I have a lot to tell because I have 25 years of experience in the cultural communities and I see that the concerns of governments and large organizations like yours are simply not there.
In the United States, there is a program, and the government is part of it, to encourage the insurance companies to insure everybody after a disaster; to give them the possibility of insuring their house and their property and, in case of a disaster, the American government will pay the difference. Somebody told me about it; I do not know if you are aware of it.
[English]
Mr. Anderson: That is the program I described earlier.
[Translation]
Senator Ferretti Barth: It is very difficult for me. Could you describe it?
[English]
Mr. Anderson: We have described that in our document. We are recommending to the committee that they look at that as an example of some of the things that are done.
With respect to people not understanding the insurance product, we try to make our brochures on the basic insurance product available in several languages. I cannot tell you offhand how many, but several and certainly covering the predominant languages. We do have a situation in the country, as you know, senator, where if you have a mortgage you have to have insurance. Hence, from that point of view, whether you understand it or not, you get it. I suppose in some respects that is a good thing.
Senator Ferretti Barth: The immigrants know that if they buy a house, they pay the insurance for the mortgage, but it is your role to explain the risk.
Mr. Anderson: I agree with that. We are about to come out with a number of documents that help people at this level. We are working on a brochure right now about what questions to ask a broker or agent when you buy insurance, to make sure you get the coverage that you need. We are trying to do a better job.
We are holding constituent forums across the country with members of Parliament. These have been surprisingly successful. We have invited constituents to come and sit with the member of Parliament and with representatives from our industry and talk about what insurance is, what questions to ask, what problems people see with our industry, and we try to respond. These have been very well attended and very good.
Senator Fraser: Mitigation. The examples of the Winnipeg floodway and even the storm seeding in Alberta are relatively well known. I do not have a clue about what other forms of mitigation exist. I was interested to see your reference to American funding for ice storm-type mitigation in New York state. I do not know what they are doing. What kind of things would we do with this $100 million a year?
Mr. Anderson: There have been huge advances in weather forecasting systems. You are familiar with what happened in the states just recently with those terrible tornadoes. The death toll from that could have been many, many times what it was, but the weather service down there was able to warn people sufficiently ahead of time so that could in effect hide from the tornadoes. Hence, investment in weather forecasting infrastructure is very important. It is also important on the East Coast where there is the threat of hurricanes. According to the people who know these things, this is expected to be a big year for hurricanes. Therefore, investment in weather forecasting systems is important.
I will ask Mr. Kelly to name a few others. In the United States, there were 22 projects submitted by communities to respond to the ice storm disaster.
Senator Fraser: The only thing I can think of is better designed hydro transmission powers.
Mr. Anderson: Make sure you inspect them so they are built to the standard they should be. You can bury the lines.
Senator Fraser: Have you tried chatting with Hydro-Québec about that?
Mr. Grant Kelly, Policy Analyst, Insurance Bureau of Canada: As we went across the country last year, we did get a number of ideas on the type of projects. For example, there is no provision in our building codes right now about flood-proofing residential homes. There is no provision in there for wind loads or damages. We just do not have the information to put in the building code.
Every year that there is flooding in Timmins, we say that there are structural things that we can do. In Atlantic Canada, they know that as hurricanes come up the coast they turn into tropical storms. The facilities are there to measure how big it is. However, no one has taken the next step, to see what happens when that water hits the land. Thus, we do not know where that storm surge will go or which parts of the coast will be affected.
Mr. Anderson: We know in Newfoundland in the 1920s one of these waves wafted across the Burrin Peninsula. That is a surprise to you.
The Chairman: Senator Cook, were you aware of that?
Senator Cook: It was 1929. My mother was a young girl. It was an earthquake.
Senator Fraser: How far is that in miles across the peninsula?
Senator Cook: It would have affected about 150 miles, the entire boot. I can bring you pictures of that.
Mr. Anderson: That will happen again. It is a subduction earthquake.
Mr. Kelly: The other major area where the money could be used is building up infrastructures in our major cities. We know there are areas in Ottawa, in Montreal, in Calgary where, when it rains, the storm sewers just cannot handle the load of water. The sewer system in Toronto was built for a population a lot smaller in the 1920s and 1930s.
Senator Fraser: In Montreal a few years ago, a big summer storm caused streets way above river level to be deep in water for quite a while.
Vancouver, I believe, has installed, or has almost completed putting in, a special sewer system. Am I right about that?
Mr. Anderson: I could not say. I know a significant amount of work is being done out there to shore up the bridges for an earthquake, but I do not know about the sewer system.
Senator Fraser: In a sense, you have already answered this question. Are you satisfied that we have a national sense of where the dangers are?
Mr. Anderson: Yes, we know that. It is very much a Canadian phenomenon that every region of the country has a slightly different exposure, but we are all exposed in some way. In documents we have left you, we have shown you by region what the exposures are. You know them yourselves.
We talked about the storm problems along the East Coast and the flooding problems there. We have not touched on the things like forest fires in Northern Ontario and out West. We know about the flood risk in Manitoba. We know about the earthquake risk and the flood risk in British Columbia. We have a good sense of where the exposures are. The problem is that we have a lot of them everywhere.
Senator Fraser: Do you have any documentation or even any anecdotal sense of which other countries have good mitigation programs and how they work?
Mr. Anderson: This is part of the work of the institute that I described earlier. We are beginning to collect this kind of information. It looks like the United States has a good program. It appears that France in the flood area has a good program. Australia faces a lot of natural hazards, as does Japan.
These catastrophes have a way of surprising us. Kobe is a good example where people thought that state-of-the-art buildings had been built in anticipation of an earthquake. Yet, in a matter of seconds, there were billions and billions of dollars of damage done.
Senator Fraser: That was the liquefaction?
Mr. Anderson: Yes, which is also a problem in Richmond, B.C.
Senator Fraser: Would you have any documentation on the Australian case? We could write to Australia, but it would be nice to know what we are asking for.
Mr. Anderson: We have, and we have good contacts in the United States through the Institute of Home and Business Safety, which is also looking at this problem. We can bring to the committee that kind of material. We would be very happy to do that.
The Chairman: With a disaster such as the one in Manitoba, the federal government put in $50 million. The problem that we tend to have is that, when we have a disaster and we build temporary structures, particularly in the 1997 flood, which I lived through, of course, because there is no money afterwards, they tear them down. You are right back where you started. The recommendation was that, if we took 10 percent of the cost of that flood in Manitoba, as an example, and added that to the cost, you could then turn those temporary structures into permanent structures. You would thereby reduce the cost substantially over the long term because that in effect becomes long-term mitigation. You do it temporarily and you turn it into a permanent solution. Would you recommend that?
Mr. Anderson: Yes. That is the second program that we think is very important. It capitalizes on the desire to do something in the immediate aftermath.
We have to get the Department of Finance to think about the economic benefit of these kinds of investments. It is very important that we help people and save lives, but we get people back to work and we get the economy functioning quickly. What is the benefit of that to the overall functioning of the Canadian economic system? It can be documented that the more you spend this way the more you benefit that way.
Senator Fraser: Have you done any projections on the likely incidence of expensive disasters in coming years?
Mr. Anderson: Only simplistic exponential equationing that tells us that, in effect, the cost is doubling about every five years now.
Senator Fraser: That is not bad, as projections go. It grabs your attention.
I asked you for data about insurance premiums. If it is possible, it would also be very useful for us to be able to see how many people as a percentage of the population are covered, especially in the appropriate regions, for various forms of risk.
Mr. Anderson: Yes, we can show you that.
Senator Cook: On the Atlantic seaboard, with the hurricane season starting much earlier, do you have any predictions regarding the effect of that on the oil rigs sailing up the Continental Shelf and the gas lines coming in from Sable Island?
Mr. Anderson: All I can say is that the oil drilling rigs have been built in anticipation of this kind of event and in anticipation of the large iceberg risk that exists there as well. I would assume, without knowing for a fact, that a lot of the engineering has been concerned with that, as the Confederation Bridge engineering project was in terms of the forces of nature on it. I would not care to predict what is likely to happen in the event of a large storm there.
I can tell you anecdotally that Maritimers do not believe in hurricanes. I am building a house down there and I asked my builder for hurricane tiedowns on my roof. It is the subject of widespread mirth up and down the coast, I can tell you. People just do not believe that there is going to be a hurricane.
Senator Fraser: They do not call them hurricanes.
Senator Cook: I will leave you with a sobering thought. The Ocean Ranger disappeared one night.
Mr. Anderson: Absolutely.
The Chairman: Gentlemen, I would give you a vote of appreciation on behalf of the committee, and particularly myself, for the strong support that you have given us in background information. As you know, we have been following the CAT group across the country. Unfortunately, I will not be able to be in Red Deer on Friday, although I would like to because they will be speaking on hail. I know you will be there. Thank you, gentlemen.
The committee adjourned.