Disaster Financial Assistance Arrangements (DFAA) - Revised Guidelines

In the event of a large-scale natural disaster, the Government of Canada provides financial assistance to provincial and territorial governments through the Disaster Financial Assistance Arrangements (DFAA), administered by Public Safety Canada (PS).

• Overview
• Roles and responsibilities
• Cost sharing
  • Revised DFAA Guidelines
  • Appendix A
  • Appendix B
     

Overview

In the event of a large-scale natural disaster, the Government of Canada provides financial assistance to provincial and territorial governments through the Disaster Financial Assistance Arrangements (DFAA), administered by Public Safety Canada.  When response and recovery costs exceed what individual provinces or territories could reasonably be expected to bear on their own, the DFAA provide the Government of Canada with a fair and equitable means of assisting provincial and territorial governments.

Through the DFAA, assistance is paid to the province or territory – not directly to affected individuals, small businesses or communities.  A request for reimbursement under the DFAA is processed immediately following receipt of the required documentation of provincial/territorial expenditures and a review by federal auditors.

Since the inception of the program in 1970, the Government of Canada has paid out more than $2.0 billion in post-disaster assistance to help provinces and territories with the costs of response and of returning infrastructure and personal property to pre-disaster condition.

Examples of recent payments include those for the 2005 Alberta floods, the 2003 British Columbia wildfires, and the 2006 flood in Newfoundland.

Roles and responsibilities

The provincial or territorial governments design, develop and deliver disaster financial assistance, deciding the amounts and types of assistance that will be provided to those that have experienced losses.  The DFAA place no restrictions on provincial or territorial governments in this regard - they are free to put in place the disaster financial assistance appropriate to the particular disaster and the circumstances, and the DFAA set out what costs will be eligible for cost-sharing with the federal government.

Public Safety Canada works closely with the province or territory to review provincial/territorial requests for reimbursement of eligible response and recovery costs.

Cost sharing

A province or territory may request Government of Canada disaster financial assistance when eligible expenditures exceed $1 per capita (based on provincial or territorial population). For more information, please consult Appendix A.

Eligible expenses include, but are not limited to, evacuation operations, restoring public works and infrastructure to their pre-disaster condition, as well as replacing or repairing basic, essential personal property of individuals, small businesses and farmsteads. For further information on eligible expenses, please consult Appendix B.

The Government of Canada may provide advance and interim payments to provincial and territorial governments as funds are expended under the provincial/territorial disaster assistance program. All provincial or territorial requests for DFAA cost sharing are subject to federal audit to ensure that cost sharing is provided according to the DFAA guidelines. Each request for cost sharing under the DFAA is processed immediately once the affected province or territory provides the required documentation of expenditures.

Revised DFAA Guidelines

On January 1, 2008, the revised guidelines for the DFAA came into effect. The guidelines spell out what provincial and territorial disaster expenses are eligible for federal cost-sharing and how the DFAA are administered. The new guidelines apply to natural disasters which occurred on or after January 1, 2008. The previous guidelines apply to earlier events for which Public Safety Canada is working with the provinces and territories on payments.

The revisions to the DFAA guidelines include:

• clarifying the definition of eligible disasters
• expanding the definition of eligible small businesses and farms to allow federal cost-sharing with provincial and territorial disaster financial assistance to business owners and part-time farmers
• federal cost-sharing with provincial and territorial disaster financial assistance for charitable, non-profit or voluntary organizations
• federal cost-sharing with provinces and territories for enhancements to damaged infrastructure for the purpose of mitigation

The new DFAA guidelines will not change the current cost-sharing formula, as described in Appendix A.

Appendix A

Disaster Financial Assistance Arrangements (DFAA) per capita sharing formula

Eligible Provincial / Territorial Expenditures	Government of Canada Share
First $1 per capita	Nil
Next $2 per capita	50%
Next $2 per capita	75%
Remainder	90%

Example: For a disaster in a province with a population of 1 million where the total eligible expenses for responding to and recovering from a disaster are $10 million, the table below shows how eligible expenditures would be cost-shared through the DFAA.

Example for a disaster in a province with a population of 1 million

Eligible Expenditures	Provincial or Territorial Government	Government of Canada
First $1 per capita (100% provincial/territorial)	$1 million	Nil
Next $2 per capita (50%)	$1 million	$1 million
Next $2 per capita (75%)	$500,000	$1,500,000
Remainder (90%)	$500,000	$4,500,000
TOTAL	$3 million	$7 million

Appendix B

Examples of provincial/territorial expenses that may be eligible for cost sharing under the DFAA

• Evacuation, transportation, emergency food, shelter and clothing
• Emergency provision of essential community services
• Security measures including the removal of valuable assets and hazardous materials from a threatened area
• Repairs to public buildings and related equipment
• Repairs to public infrastructure such as roads and bridges
• Removal of damaged structures constituting a threat to public safety
• Restoration, replacement or repairs to an individual's dwelling (principal residence only)
• Restoration, replacement or repairs to essential personal furnishings, appliances and clothing
• Restoration of small businesses and farmsteads including buildings and equipment
• Costs of damage inspection, appraisal and clean up

Examples of expenses that would NOT be eligible for reimbursement

• Repairs to a non-primary dwelling (e.g. cottage or ski chalet)
• Repairs that are eligible for reimbursement through insurance
• Costs that are covered in whole or in part by another government program (e.g. production/crop insurance)
• Normal operating expenses of a government department or agency
• Assistance to large businesses and crown corporations
• Loss of income and economic recovery
• Forest fire fighting