Benjamin Graham's Investing Voting Machine vs Weighing Machine Contrast Decision Making Based on Sentiment vs Value - What Are The Lessons for Infrastructure Investment for Flood Mitigation and Ontario's Environment Plan?

In last summer's Donville Kent Asset Management ROE Reporter Jason Donville and Jessie Gamble share Benjamin Graham's insightful quote:

"In the short run, the market is a voting machine - reflecting a voter-registration test that requires only money, not intelligence or emotional stability - but in the long run, the market is a weighing machine".

How does this apply to investing infrastructure? Is there also a "voting machine" at play in our industry when it comes to picking policies and technologies for flood mitigation? There certainly is. Is there also a "weighing machine" that will ultimately show us the merit of our decision making over time? Yes again.

Jason and Jessie comment how a focus on fundamentals and performance, including return on equity (ROE), 'weighs' value in an investment that in the long run will pay off, regardless of the frustrating volatility of short term 'voting' in the market, where decisions are made based on emotion.

Every stock on the TSX have a ROE value and a price to earnings ratio (PE) so that an investor knows what benefits (annual earnings) come at what cost (stock price). All stocks also have a price to earnings growth (PEG) reflecting the increase in value over time.

The concepts of ROE, PE, or PEG in infrastructure investing (aka city building and remediation) is a little more complex than in the stock market. Price: The price for infrastructure investing is somewhat volatile with construction projects tendered in an open market whereby hundreds of individual tender items that make up an infrastructure project are priced and multiplied by tender quantities and them aggregated into a total project bid price - for example one tender item in a flood remediation project may be 1800 mm diameter concrete pipe, and contractors will bid on that item considering the quantity involved, the environmental conditions for installation (depth, trench shoring requirements, adjacent infrastructure to isolate/protect from damage, etc.), etc.. Earnings: Typically municipal infrastructure does not have earnings - an exception might be privatized toll roads that are build and operated under P3 arrangements.

In the stock market the cost of the investment and benefits (capital gains and distributions) are all assigned to the same investor. In infrastructure investing, cost are borne by municipalities, passed on to taxpayers, and benefits accrue to taxpayers (hopefully in proportion to their funding contributions) and also to others like the insurance industry who can benefit from lower flood claims etc. over time. Sometimes costs are partially funded more widely, such as through the recent federal Clean Water and Wastewater Fund (CWWF) or through the upcoming federal Disaster Mitigation Adaptation Fund (DMAF). In an upcoming paper presented at the Water Environment Association of Ontario's 2019 Annual Conference I'll touch on the principles that have been in place for almost a century when it comes to funding water resource infrastructure projects. Kneese (What Ever Happened to Cost Benefit Analysis?) described the evolution of cost-benefit analysis in the United States dating back to the beginning of the 20th century when the Federal Reclamation Act of 1902 required economic analysis of projects, and 1936 when the Flood Control Act established a welfare economics feasibility test that benefits “to whomsoever they may accrue” must exceed costs.

Some infrastructure investments are mandated through regulation such as in the water supply realm where human health is paramount and even high cost investments are warranted to meet safety goals. ROE, or return on investment (ROI), are not considerations.

In contrast, in the flood control realm, most investment decisions are discretionary and must be justified through public and political will and in most cased be funded locally. In Ontario, the majority of flood mitigation municipal projects, including basement flood risk reduction, are funded through municipal taxes or water rates with some grant offsets. Exceptions include works on municipal drains funded through local Drainage Act assessments of contributing and benefiting properties, or in Markham, Ontario's Flood Control Program where a city-wide Stormwater Fee is dedicated 100% to funding flood mitigation activities. Some cities will offer rebates to property owners on stormwater utility fees who implement on-site measures to provide system benefits (e.g., Kitchener, Mississauga), but there is not a rigorous assessment of benefits achieved relative to rebates provided.

Do flood mitigation projects rigorously consider ROI? - that is, the ratio of deferred flood damages that infrastructure investments achieve relative to the cost on the discretionary infrastructure investment? Typically no. Investment decisions may be based on achieving specific outcomes, like meeting a standard of performance or level of service, regardless of the investment cost. Typically, in Ontario, the Environmental Assessment process guide infrastructure investment decisions such that preferred solutions to a 'Problem Statement' are evaluated qualitatively based on performance (i.e., how well is the problem addressed or solved by an alternative solution) and on capital and long term operating costs. However, the relationship between costs and performance benefits is not typically evaluated and decisions to implement a particular solution are not tied quantitatively to ROI. Where costs or other impacts are excessive relative to the benefits, the mandatory "Do Nothing Alternative" may be selected as the preferred solution, essentially stating that the ROI of potential solutions is inadequate.

Sometimes an infrastructure investment to achieve flood risk reduction is a 'no-brainer'. Examples include the Lower Don River landform to protect the West Don Lands from Don River flooding. In that case a berm and bridge upgrades with costs in the tens of millions of dollars freed up land development worth a billion. The Environmental Assessment did not even have to do economic cost-benefit analysis to settle on that solution. Opportunities for such "10-baggers" investments with benefits an order of magnitude greater than costs are rare. What is more typical is that the high ROI is not so obvious. For example in the case of Calgary's Springbank Off-Stream Flood Storage reservoir the benefit-cost analysis shows benefit cost ratios between 1.32 and 2.07 depending on the damage estimate and proposed level of service (IBI Group, 2015). And then where benefits are limited, meaning the flood risks are marginal, and mitigation costs are high, there may be no positive return at all - benefits may be less than costs. This range of benefit-cost ratio was explored on a sewershed-by-sewershed basis in the City of Stratford City-wide Storm System Master Plan in 2004 - but that is perhaps a very rare example of rigorous benefit cost analysis for local infratructure investments.

Because of the qualitative nature of the alternative evaluation in Ontario's Environmental Assessment process it can be considered to be part voting machine and part weighing machine, that is, there is some 'weighing' of alternative value but the decision is a qualitative 'vote' when it comes to ROI. For many small infrastructure investments this approach is reasonable. For high cost challenges facing municipalities, like those related to flood control, a more rigorous ROI assessment is required - why? - because there is an apparent risk of over-investing in low ROI solutions and under-investing in high-performance solutions with high long term value.

Enter Infrastructure Canada's DMAF. This $2 billion federal fund targets projects valued at over $20 million that will be implemented over the next 10 years. Unlike other funding programs like CWWF, DMAF applications will have to assess the ROI (benefits/costs) of the project and achieve a minimum ratio of 2:1. The benefits may be direct flood damage reduction values over the service life of the project, as well as other non-commensurate benefits (environmental benefits). The costs are the infrastructure investment capital and operating cost.

A focus on cost effectiveness is welcome in the realm of infrastructure policy setting, planning and funding. The is a healthy debate around policies for traditional grey and emerging green infrastructure investment, for example. As proposed in the WEAO 2019 paper noted above, and in the upcoming article in WEAO Influent's magazine, cost effectiveness screening is essential for given limited resources and the need to prioritize infrastructure investments to get the most bang for the buck. Unfortunately there appears to be a lot of 'voting machine' behaviour promoting technologies that have uncertain performance, high cost, but strong emotional drivers.

As noted in the Made-in-Ontario Environment Plan, "When the government does invest in environmental programs, taxpayers should not have to watch their hard-earned dollars be diverted towards expensive, ineffective policies and programs that do not deliver results." - that means we need a Benjamin Graham weighing machine, carefully assessing costs and benefits of policies and programs, as opposed to a voting machine fed by emotion and ideology. Ontarian's should demand the same careful focus on ROE or ROI for their infrastructure investments that Donville Kent has embraced in their equity investments.

Extreme Rainfall Trends Toronto and Mississauga - Extending Annual Maximum Series with Environment Canada Data

Environment and Climate Change Canada (ECCC) updates the Engineering Climate Datasets periodically including annual maximum series (AMS's) that reflect annual rainfall extremes over various durations, and also the derived rainfall statistics (intensity-duration-frequency (IDF) curves)) used in engineering design.

Municipalities updating their design standards and practitioners involved in hydrotechnical studies can wait for official updates or complete them in-house. Raw data is available from Environment Canada for a small fee, and can be screened for data gaps / errors and then processed to identify the maximum rainfall each year over the standard periods of 5 minute to 24 hours.

To review local design standards to account for any changes in rainfall intensity, my work team obtained raw data for the Pearson Airport and Toronto City (Bloor Street) climate stations in late 2017 to extend the ECCC analysis. The official Version 2.3 datasets extend to 2007 for Toronto City and 2013 for Pearson Airport - the added raw data extends to cover most of 2017 and 2016 respectively. After screening for anomalies, extended AMS's were analyzed using a Gumbel distribution to generate updated IDF curves.

Selected AMS charts for Pearson Airport and Toronto City stations are shown below:

Toronto City Maximum Annual 24-Hour Rainfall 1940-2017
Toronto City Maximum Annual 1-Hour Rainfall 1940-2017
Pearson Airport (Toronto International) Mississauga Maximum Annual 24-Hour Rainfall 1950-2016

Pearson Airport (Toronto International) Mississauga Maximum Annual 1-Hour Rainfall 1950-2016
Pearson Airport (Toronto International) Mississauga Maximum Annual 5-Minute Rainfall 1950-2016
What do the charts show?
  • Long duration rainfall intensities are decreasing (24-hour period)
  • Moderate duration intensities are mixed up and down (1-hour period)
  • Short duration intensities are decreasing
Note these are not strong trends, and for example the r-squared value for the 1-hour Pearson chart is only 0.002. A previous post shows what happens to design intensities based on these observed rainfall trends, although only using the ECCC datasets and not extended records - see previous post. This is a nice summary considering 21 stations in southern Ontario with over 30 years of record:

Ontario IDF Trends for Extreme Rainfall Climate Change Effects

We even have some records that go back 100 years like in Kingston, Ontario. Those trends charts show no change in annual extremes since the early 1900's:

Colleagues share that ECCC is updating the analysis for about 100 station records later the year. We'll see if there is any change in AMS trends and significance and derived IDF values compared to the current Version 2.3 Engineering Climate Datasets.

A recent op ed in the Financial Post suggests that analysis of data up to 2012 is not sufficient to assess rain trends as the CBC/Radio-Canada Ombudsman Guy Gendron recently did. Based on the analysis here, adding a few more years to the record is not going to change the overall picture. Its best to focus on other factors affecting flood risk and not the past rainfall trends in regions like southern Ontario. What are some of these other factors?

1) Expanded urbanization as shown in this post showing southern Ontario urban area growth since the mid 1960's and also in this post quantifying urbanization in GTA watersheds,

2) More extensive foundation underpinning, lowering some basements into harms way (closer to sewer back-up levels) as shown in this post on Toronto underpinning permits,

3) System modifications to reduce overflows for environmental protection like in this post referring to infrastructure impacts in Toronto Area 32,

4) Operational decisions that ignore known risks and put people in harm's way like in this post reviewing the July 8, 2013 GO Train flood in the Don River Floodplain,

5) Encroachment on overland flow paths, i.e., lost rivers in urban areas, putting properties at risk of pluvial flooding as this presentation analyzing flooding within overland flow path areas in Toronto in the May 200, August 2005 and July 2013 storms.

Detailed spatial analysis shows that most basement flooding can be explained by 2 factors of i) sanitary sewer inflow and infiltration rates (normalized for catchment area and design return period in a calibrated hydrodynamic model), and ii) the percent full of the sanitary sewers during extreme events - these 2 factors numerically explain over 60% of insurance back-up risks at a postal-code scale of accuracy.

What does this mean? Municipalities need to i) reduce extraneous flows in a cost effective manner in the short term, ii) upgrade sanitary sewer capacity where residual flows are high compared to capacity, iii) upgrade critical storm sewers where design standards are limited and overland flooding stresses adversely affect properties (pluvial flooding at the surface, inflow stresses below the surface), iv) offer private property isolation subsidies (backwater valves and foundation drain disconnection) to provide timely cost-effective risk reduction.

What to do where? It all starts with risk screening, as illustrated in our previous post describing tiered screening for riverine, sanitary and storm systems risks prepared for the Intact Centre on Climate Adaptation for their existing communities 'best practices' document, and another post describing such tiered screening with quantified risk factors prepared for Green Communities Canada's Urban Flooding Collective project.  What about a city-wide perspective on how much to budget for a comprehensive program of flood risk reduction incorporating these tactics? See a recent post that explored the cost-effectiveness of various municipal-wide strategies - look for more details at the 2019 WEAO Annual Conference, and look for even more in future national standards on benefit/cost analysis for flood mitigation we are developing for the National Research Council.

Weathering the Storms with Ontario's Environment Plan - Understanding Challenges and Opportunities for Flood Resilience in Ontario

As Ontario develops its Environment Plan, how it build resilience to extreme weather and mitigate flood damages in our communities should be a key consideration. To do so, we will need to identify and pursue technically-effective and financially-sustainable approaches to reduce flood risks. The following post explores reporting on floods, examines risk factors driving flood losses, and discusses challenges and opportunities for risk mitigation solutions that policymakers can consider. Further analysis on the role of green and grey infrastructure, including benefit-cost analysis to help guide infrastructure investment priorities, will be presented at the Water Environment Association of Ontario annual conference in April 2019 (see paper).
R. Muir
Feb. 2, 2019

Flooding and Extreme Weather (Climate Change) in the Headlines

Flooding and concerns with severe weather continue to dominate headlines especially when summer storms impact Ontario municipalities, whether in Toronto in 2018, Windsor in 2017, Burlington in 2014, Toronto in 2013, Ottawa in 2009, Peterborough in 2004 or Stratford in 2002. Similarly, spring river flooding and high lake levels like those across the Grand River watershed in 2018 or around Lake Ontario in 2017 are often accompanied by declarations of a ‘new normal’[i] of extreme conditions due to more frequent or intense storms as a result of climate change. These recent events are associated with high economic losses and, tragically, have even resulted in loss of life[ii]. Therefore the need for strategic infrastructure planning that addresses flood resiliency and addresses these impacts in a timely and sustainable manner continues to be a priority for Ontario municipalities and water management agencies.

Understanding the engineering factors affecting flooding, sometimes misreported in the media, can help explain risks and identify opportunities for ‘weathering the storms’ and improving community resilience, including evaluating the role of emerging natural/green technologies promoted in the media, and in some industry circles[iii], and now being considered in Ontario water management policies.

What Causes Flooding?

The majority of summer storm impacts affecting Ontario municipalities result from how cities were built and how they have grown - that is, a combination of long-standing limitations in historical infrastructure capacity and urbanization pressures over many decades[iv]. Simply put, sewer pipes designed and installed fifty to one hundred years ago were never sized to handle extreme weather conditions responsible for today’s flooding, and were intended to accommodate lower amounts of development - designing to effectively convey runoff overland following very heavy rain only became a common practice in Ontario in the 1980’s. Similarly, flooding along river valleys and around lakes results from the long-standing intrinsic risks facing historical settlements due to their location relative to expected high water levels - planning to effectively situate development above and beyond these flood plains became common in only the 1950’s and later decades with the continued advancement of flood hazard mapping and regulation.

In the media today, infrastructure design limitations and urbanization stresses are sometimes identified as factors contributing to flooding, but they seldom recognized as the dominant factors to be managed - as a result there is a tendency to speculate on changes in weather patterns as opposed to recognize the basic physical limitations present under today’s or yesterday’s weather conditions.

Is Flooding Getting Worse?

Yes, in some cases. No, in others. The frequency and severity of flood events along rivers may have increased due to historical growth in watersheds that took place before modern engineered runoff control practices. Urbanization can increase flood risk due to higher runoff, flow rates and water levels and intensification in high risk zones can increase exposure to these risks, making flood conditions and flood impacts worse[v]. Such higher risks can occur across large watersheds as well as within local neighbourhoods beyond river valleys and where historical development may have buried small local creeks, limiting the capacity for rainwater to safety runoff during extreme weather. It is commonly accepted that increases in flood risk accompany growth in Gross Domestic Product (GDP) - Ontario’s GDP has increased by 35% from 2000 to 2017[vi], suggesting the potential for more at risk property. But in rural watersheds, unaffected by urbanization, changes in winter temperatures have actually lowered spring flows and flood risk, by increasing the amount of steady melt runoff throughout the winter (i.e., due to dramatically more frost-free days)[vii].

Complicating the situation, infrastructure systems may be constrained over time which can also make localized flood impacts worse. Sometimes improvements made to transportation systems, such as constructing underpasses to reduce traffic disruptions and improve safety at historical at-grade railway crossings, exposes resulting low lying roadways to more frequent flooding[viii]. Similarly, wastewater collection system retrofits to enhance water quality protection, like the installation of control tanks or the adjustment of regulator structures to prevent wastewater overflows to waterways, can incrementally increase local flood risks as wastewater is held back in the sewer system to protect the environment[ix]. Infrastructure systems are therefore complex and their design may involve trade-offs between competing performance goals (e.g., flooding vs. environmental protection). In addition, the capacity of sewer systems can be reduced by a range of other local factors, such as inadvertent encroachment by utilities cross-bored through sewer pipes or the build-up of calcite deposits or other debris between regular maintenance cycles. While these factors can worsen flood risk by lowering infrastructure capacity, the exposure of individual properties may increase at the same time as well, aggravating flood damage potential. For example the practice of lowering basements through foundation underpinning to enhance living spaces can increase the risk of damage further just by shifting vulnerable property closer to any high water or wastewater levels in city sewers[x].

There are some dramatic examples of infrastructure failures that could suggest flood impacts are getting worse, such as the wash-out of Finch Avenue West in Toronto during the August 2005 storm[xi]. A review of historical failures in the Toronto region, however, suggests a significant decrease in these types of failures as the design and construction practices for roads and bridges have improved - more resilient engineering practices are now resulting in more limited instances of washouts and lower vulnerability compared to the early and mid 1900’s[xii], despite an increasing number of roadways and structures in our communities.

Sometimes dramatic flooding events are deemed unprecedented in the media and the event may be explained by more severe weather and climate change effects. Careful review of data records may contradict such suggestions, for example in the case of the stranded Toronto commuter train along the Don River in July 2013. While some media reports suggested the event was unprecedented, records indicate that higher flooding occurred weeks before the incident[xiii] and a comprehensive inquiry in the 1980’s revealed long-standing railway risks dating back to the 1800’s. A review of media archives shows the Toronto commuter train was stranded in the same location in 1981 as well[xiv].

Overall, some flood impacts are getting worse, often due to a range of under-reported factors. Over time historical infrastructure design limitations become apparent, sometimes accentuated by urbanization over previous decades. Infrastructure failures, including roadway and bridge wash-outs are fortunately extremely isolated despite some dramatic examples. In some cases, dramatic flood events may reflect limited operational practices to manage long-standing risks, as opposed to any changes in intrinsic risk factors.

Are Storms Bigger and More Frequent Due To Climate Change?

Not necessarily. While the number of flood events may appear to be on the rise due to urbanization stresses and other considerations, bigger and more frequent storms is not a key factor in many Ontario cities. In fact, numerous engineering studies[xv] to review design standards in the face of climate change concerns and the official Engineering Climate Datasets have shown extreme rainfall trends across southern Ontario have remained unchanged for decades[xvi]. This runs counter to common media suggestions that link any flood trends directly to rainfall trends, but often in the absence of any rainfall analysis or comprehensive consideration of local runoff hydrology and infrastructure hydraulic factors.

In some regions, such a northern Ontario, increases in rainfall intensity have been observed in historical rainfall records. While many climate change models predict more extreme rain intensities in the future in Ontario due to climate change, there is a high degree of uncertainty, and some models predict decreasing extremes[xvii].

So based on observations and statistical analysis, storms are not necessarily more severe, despite recent media statements to the contrary that may even state there is a definitive change in baseline conditions that affects every single extreme weather event[xviii]. Notwithstanding the lack of clear historical trends, precautionary engineering design must always consider safety factors to account for potential changes in storm frequency or severity, and consider the natural unpredictability of weather systems. There is a significant opportunity for professional engineers and specialists to educate the media and non-technical stakeholders on severe weather trends affecting flooding.

The recent call for ‘immediate action’ on climate change effects by executives from Intact Financial and Sun Life[xix] shows that flood risk factors are not well understood.

Are Water Levels Higher Today Due To Climate Change?

Not necessarily. While 2017 Lake Ontario levels were certainly well above average levels, long term records show that historical high levels were only barely exceeded by a few centimetres in 2017[xx]. Occasionally breaking records is something that should be expected to occur to some degree over any long record period - consider that in the second year of any water level recording that if the first year had average levels, there is a 50% chance of ‘breaking the record’ in the second year. Even where there are long term observations like on the Great Lakes, records should be expected to be broken and considered when planning land uses or designing vulnerable infrastructure.

Expanding encroachment upon the lakeshore environment, whether from residential development (e.g., Toronto Island), or the early spring use of beaches by volleyball leagues (e.g., Woodbine Beach), can accentuate conflicts with high water levels that are largely reflective of the ‘old normal’ and not higher water levels due to a changing climate. In the media, it is common to report on high water levels without a broad consideration of historical water level data which can serve to mischaracterize the rarity of particular levels. Sometimes the nature of community encroachment has changed more than the water levels, making the impacts of high water levels more severe.

In some water systems, operational considerations can affect water levels regardless of variability in the climate and weather inputs. This is a consideration for Lake Ontario and St. Lawrence River levels that are controlled based on multiple, sometimes-competing objectives (hydropower supply, commercial navigation, water supply, recreational boating, flood and low water level management, and habitat enhancement) as well as northern lakes in ‘cottage country’ where levels are also controlled based on a range of objectives.

Strategies for Achieving Sustainable Flood Resiliency

The Ontario government has set a framework for achieving resiliency through acts, regulations and guidelines that support municipalities in evaluating resiliency, reporting infrastructure performance, and planning necessary improvements in level of service with long-term asset management strategies[xxi]. While the focus is often on climate change resiliency, significant opportunities for risk reduction lie in improving resiliency to today’s climate given historical design limitations and recent growth pressures. Focusing on today’s infrastructure investment challenges should be pursued as an effective strategy for achieving flood resiliency today while also delivering future climate resiliency as a co-benefit. In other words, necessary ‘design standard upgrades’ can achieve ‘climate adaptation’ goals as well.

There are opportunities for promote how appropriate safety factors can be incorporated into design standards to guide municipalities when considering future climate resiliency - this may require the collaboration of several ministries that are responsible for interrelated natural hazards (river flood risks), stormwater management (urban flood risks), and building standards (property-scale risks) and that affect flooding from ‘flood plain to floor drain’.

OSPE has recently commented on emerging policies related to flood risks and stormwater management in Ontario, addressing flood risk factors and highlighting challenges for achieving sustainable mitigation. OSPE's 2017 report “Weathering the Storms: Municipalities Plead for Stormwater Infrastructure Funding”[xxii] prepared with the Ontario Sewer and Watermain Construction Association and the Residential and Civil Construction Alliance of Ontario identified that “significant investments will be required to maintain or bring municipal stormwater infrastructure up to a good or better condition rating” and noted that there is considerable apprehension on climate change effects among Ontario municipalities. A strategy that focuses on today’s risks would effectively address future effects and one that implements technically-effective and cost-effective infrastructure solutions would ensure that the significant investments would be worthwhile.

What is the Role of Grey and Green Infrastructure?

To help guide infrastructure priorities OSPE has commented on Ontario’s draft Watershed Planning Guidance identifying concerns with the effectiveness of emerging technologies to address flood risks[xxiii]. In earlier comments on Ontario’s Long Term Infrastructure Plan OSPE recommended that comprehensive cost analysis was required for green infrastructure (low impact development measures, like rain gardens, permeable pavement, infiltration trenches, etc.)[xxiv]. The need to evaluate both technical and cost effectiveness of green infrastructure is especially important today as it is being promoted in emerging Ontario policies surrounding stormwater management, and is currently being promoted by several groups, especially within the insurance industry[xxv], as a viable solution to achieving flood risk reduction. Often this promotion is being done based on limited technical input, sometimes with gross economic proxies used in place of necessary engineering analyses[xxvi].

Analysis of the cost-effectiveness of various infrastructure solutions for reducing flood damages has been completed to reinforce the need for comprehensive financial analysis to further guide infrastructure policies and priorities. Full lifecycle costs of traditional grey infrastructure (i.e., storm sewers and sanitary sewers) and emerging green infrastructure solutions were evaluated considering both initial capital and on-going operation and maintenance costs. In the case study, grey infrastructure was shown to be cost-effective at reducing flood damages – in fact for every dollar invested in sewer upgrades, two dollars of insured damages are prevented. When total losses are considered, grey infrastructure prevents five dollars of damage. A more important finding was that the effectiveness of grey infrastructure was one to two orders of magnitude higher than green infrastructure[xxvii]. These are important observations to guide infrastructure investments in Ontario as part of asset management plans, or other flood control strategies. Firstly, grey infrastructure investments are absolutely worthwhile and can increase the level of service at a reasonable cost. Secondly, green infrastructure appears to have been oversold as a potential tool for flood risk reduction, delivering only pennies of benefits for every dollar spent.

Promoting green infrastructure as a flood mitigation solution for critical infrastructure is now pervasive, especially from the insurance industry. Recently, executives from Intact Financial and Sun Life suggested the need to “improve and even transform the design, delivery, efficiency, resilience and greening of infrastructure projects”[xxviii].  This appears to be a counter-productive approach, as green infrastructure spending represents a significant opportunity cost considering more cost-effective traditional infrastructure measures. Furthermore, OSPE’s comments on Ontario’s draft Watershed Planning Guidance cautioned that green infrastructure can make flooding worse:

“The adverse impacts of green infrastructure infiltration on wastewater systems, in which the
majority of flooding in Ontario is concentrated due to historical municipal servicing practices and
standards, has been overlooked in the statement promoting green infrastructure as a flood
control measure.”

What is the Role of Ontario’s Professional Engineers?

Just as OSPE asserted that the government must restore the oversight of professional engineers in the detailed planning and design of Ontario’s power grid to prevent missteps from happening[xxix], OSPE asserts the role of professional engineers in the development of infrastructure investment priorities to mitigate flood impacts in a cost-effective and timely manner. To identify these investments, Ontario’s Municipal Engineers Association has a well-established Class Environmental Assessment process[xxx] for guiding municipalities in developing master plans and local projects to address local flooding issues in existing communities. The process evaluates cost, social, technical and environmental considerations and can be followed to identify appropriate infrastructure investments. Ontario’s professional engineers can ensure that appropriate technologies are evaluated and selected, planned and funded, and then designed and implemented – such infrastructure can provide flood protection to Ontario communities and lasting value to residents and businesses who fund these investments through municipal taxes, in some cases stormwater utility fees.  

[i] Isabella O’Malley. Canada in 2030: New normal of extreme weather events. September 7, 2018.
[ii] James Matthews, The Toronto Star. Searchers brace for tragedy after child swept from mother’s arms into raging Grand River. February 21, 2018.
[iii] IBC-ICCA-IISD. Urgent action needed to curb possible debilitating loss of natural infrastructure assets in Canada: IBC/Intact Centre/IISD Report.
[iv] Barry J. Adams, Fabian Papa. Urban Stormwater Management Planning with Analytical Probabilistic Models, ISBN: 978-0-471-33217-6
[v] Trevor Dickinson, Ramesh Rudra, Kishor Panjabi. Climate Change & Urban Development Have Impacted Streamflows in Southern Ontario. September 27, 2018.
[vi] Statista. Gross domestic product of Ontario, Canada from 2000 to 2017 (in million chained 2007 Canadian dollars).
[vii] Trevor Dickinson and Ramesh Rudra. Disentangling Impacts of Climate & Land Use Change on Quantity & Quality of River Flows in Southern Ontario. Undated.
[viii] The Huffington Post Canada. Toronto Flood: Ferrari Abandoned In Tunnel (TWITTER). July 9, 2013.
[ix] Genivar. Investigation of Chronic Basement Flooding, Eastern Beaches (Area 32), Final Project File. Section 6 Assessment of Existing Systems. May, 2012.
[x] Robert Muir. Basement Underpinning and Sewer Back-up Risks - How Lowering Basements Increases Flood Damage Potential in Canadian Cities Undergoing Intensification. July 27, 2018.
[xi] Jennifer Wells. Climate change: How Toronto is adapting to our scary new reality. The Toronto Star. August 19, 2012.
[xii] The Metropolitan Toronto and Region Conservation Authority. A History of Flooding in the Metropolitan Toronto and Region Watersheds. Undated. (review of wash-out trends:
[xiii] Robert Muir. Evidence Based Policy Gaps in Water Resources: Thinking Fast and Slow on Floods and Flow. Journal of Water Management Modeling. 2018.
[xiv] Robert Muir. GO Train flooded in 1981 too. Media misses mark suggesting new normal for extreme weather and flooding.
[xv] Ontario Society of Professional Engineers. Response to Ontario’s Draft Watershed Planning Guidance 2017 (5) Climate Change Extreme Weather Risks in Ontario, page 12). April 7, 2018.
[xvi] Ramesh Rudra Changes in Rainfall Extremes in Ontario. International Journal of Environmental Research. July, 2015.
[xvii] Poulomi Ganguli and Paulin Coulibaly. Assessment of Future Changes in Intensity-Duration-Frequency Curves for Southern Ontario using North American (NA)-CORDEX Models with Nonstationary Methods.
[xviii] CBC News. The National. How climate change and extreme weather will change how we live. September 19, 2018.
[xix] Charles Brindamour and Dean Connor. Climate resilience must be part of every government’s agenda. The Globe and Mail. September 25, 2018.
[xx] Robert Muir. Toronto Island Flooding 2017 - Were Lake Ontario Levels Extreme? No, Barely Above Historical Maximum Levels. September 30, 2017.
[xxi] Robert Muir. Extreme Weather Resiliency and Climate Adaptation Through Strategic Asset Management & Infrastructure Investments. Association of Municipalities Ontario 2018 Annual Conference. August 21, 2018.
[xxii] Ontario Society of Professional Engineers, The Residential and Civil Construction Alliance of Ontario , and The Ontario Sewer and Watermain Construction Association. Weathering the Storms: Municipalities Plead for Stormwater Infrastructure Funding. 2017.
[xxiii] Ontario Society of Professional Engineers. Response to Ontario’s Draft Watershed Planning Guidance 2017. April 7, 2018.
[xxiv] Ontario Society of Professional Engineers . Engineers Respond to Ontario's Long-Term Infrastructure Plan 2017 (EBR 013-1907). January 27, 2018.
[xxv] About Insurance Bureau of Canada, Intact Centre on Climate Adaptation, and International Institute for
Sustainable Development. Combatting Canada’s Rising Flood Costs: Natural infrastructure is an underutilized option. September, 2018.
[xxvi] pwc in collaboration with Autocase. Assessing the business case for green infrastructure through a Total Economic Valuation approach, Final Draft. November, 2017.
[xxvii] Robert Muir and Fabian Papa. Economic Analysis of Flood Damage Reduction for Grey and Green Infrastructure – Cost Benefit Analysis Considering Insured and Total Losses, Erosion Remediation Offsets, Lost Productivity Value, and Willingness to Pay for Surface Water Quality Improvements. September 17, 2018.
[xxviii] Charles Brindamour and Dean Connor. Climate resilience must be part of every government’s agenda. The Globe and Mail. September 25, 2018.
[xxix] Ontario Society of Professional Engineers. Ontario Wasted More Than $1 Billion Worth of Clean Energy in 2016. Society Notes, The official blog of the Ontario Society of Professional Engineers. June 29, 2017.
[xxx] Municipal Engineers Association. Municipal Class Environmental Assessment (MCEA). October 2000, as amended in 2007, 2011 & 2015.

On the question of "Are Storms Bigger and More Frequent Due To Climate Change?" - the CBC Ombudsman has recently consulted Environment and Climate Change Canada (ECCC) in response to complaints on reporting inaccuracy and ECCC indicated: “For Canada as a whole, observational evidence of changes in extreme precipitation is lacking.”

CBC has corrected their original reports that claimed 100-years storms were increasing, as detailed in the earlier post: CBC articles corrected

ECCC has confirmed the observation that extreme precipitation has not changed in across Canada in its recent Canada's Changing Climate Report  which states: "For Canada as a whole, there is a lack of observational evidence of changes in daily and short-duration extreme precipitation.", and "There do not appear to be detectable trends in short-duration extreme precipitation trends in Canada as a whole based on available stations data."

CBC has corrected their coverage on this ECCC report in this article saying "Correction - An earlier version of this story said that more intense rainfall contributes to increased urban flooding. In fact, while the report states that precipitation is higher overall, it did not find that episodes of short-duration extreme rainfall have increased or establish a connection between these and increased or exacerbated flooding."

Our review of the most current Engineering Climate Datasets (Version 3.0) shows that in southern Ontario, design rainfall intensities continue to decrease since 1990 - see review of IDF trends long term climate stations. Overall, frequent storm intensities (i.e., 2 Year storms) and infrequent storm intensities (i.e., 100 Year storms) have decreased in intensity - frequent storms, those we have observed the most and have the most confidence in trends, have decreased the most.