Assessing the Damage. CBC Ombudsman Finds Wrong Flood Damage Values Reported, Notes "broader concern that there is a pattern of imprecision in CBC’s coverage relating to flood events"

The CBC Ombudsman has found violations in the CBC’s Journalistic Standards and Practices related to an April 11, 2019 article entitled "Canada's building code is getting a climate change rewrite. Is your home ready?" (link).

The violations relate to publishing the wrong value for flood damages resulting from a Toronto August 2018 storm, and failing to note corrections to an article.

The CBC has always been very responsive to feedback on extreme weather reporting, including on the frequency of extreme events.  In January 2019, the Ombudsman also found violations related to reporting of more frequent extreme rainfall events (i.e., 100-year storms) - corrections to a couple stories were required.  Those Ombudsman's findings are noted in a previous post.  Other CBC story corrections have been made since 2015, again relating to storm frequency and the causes of flooding, and are noted in this previous post.

The new Ombudsman findings are described here.

While the complaint surrounding the April 11, 2019 article is related to a single storm, the Ombudsman noted that there is a broader issue stating:

"I have a broader concern that there is a pattern of imprecision in CBC’s coverage relating to flood events."

This comment is based on the fact that the cited average flooded basement claim or payout was $43,000 was really based on an extreme 2013 flood event in Toronto - not an average at all - yet it has been repeated over and over by the media including CBC.

A previous post shows how this value started (as $40,000 back in 2017) and how it has been expanded to cover the whole country.  It has been used in Intact Centre on Climate Adaptation's infographics as well:

Intact Financial Corporation's website refers to the $43,000 value too:

Global News. The Globe and Mail. Canadian Underwriter. TVO's The Agenda. All repeat the incorrect $43,000 value. Only CBC has been keen enough to entertain a review and make corrections to the record.

The full review is noted below for reference

***

Assessing the Damage

• Sep 20, 2019

CBC reported that concerns about climate change are causing government to re-think the rules for construction of buildings and infrastructure. Complainant Robert Muir took exception to several details in the online article. Among them was an estimate of damage caused by one particular storm, which led to this review about expert sources, and the importance of precision in journalism.

COMPLAINT

You listed four deficiencies in the original version of a story headlined Canada's building code is getting a climate change rewrite. Is your home ready? which was published on April 11, 2019.

The article concerned various proposals to create tougher standards for the construction of buildings and infrastructure projects in Canada. It explained to readers that governments are considering these changes in order to mitigate the expected impact of a changing climate.

Two of your points prompted CBC News to make amendments to the article. One concerned wording that implied that predicted changes in extreme rainfall events had already been demonstrated. The other concerned the use of incorrect terminology to describe a backwater valve. Many homeowners will recognize this device which can decrease the risk of a sewage backup in their home.

Your third point suggested the article should have more fully addressed the cost effectiveness of the various proposals.  In response, CBC News explained that this was outside of the scope of this particular article. 

You were satisfied that those three points were properly addressed. However, on your fourth point, you requested a review. The remaining dispute relates to a section of the article which included an interview with Natalia Moudrak, Director of Climate Resilience at the University of Waterloo's Intact Centre. At one point she discussed the amount of damage caused to homes by flooding in Toronto.

Here is the relevant excerpt of the article:

While architects and construction workers grapple with reducing emissions from large buildings, average Canadians will face other problems. 

"Flooding is the biggest challenge" linked to climate change for most homeowners, said Natalia Moudrak, director of climate resilience at the University of Waterloo's Intact Centre. 

And there are measures homeowners can take now to safe address flooding.

If a homeowner has a pump to get water out of a basement, "it's important to install a backup generator," she said. Widespread flooding often leads to power outages, leaving regular pumps useless when they're most needed.

Homeowners can also take simple steps to elevate valuables, like expensive electronics, off their basement floor or put items in plastic or steel containers in case water does creep in, Moudrak said. 

To prevent sewage from flowing into your home during a flood, David Foster, a spokesperson for the Canadian Home Builders' Association, recommends installing a backwater valve, a mechanical backflow prevention device linked to the plumbing and designed to allow water from sewer drains to only flow away from the home.

"There is not a lot of cost involved in that, it just involves changing the way things are done," said Foster, who has consulted with the government on the new code. 

When constructing a new home, installing a backwater valve costs roughly $400, Moudrak said. When retrofitting an existing home, it usually costs about $3,000. But municipalities often offer subsidies to help offset that expense.

The problem, she said, is most people don't know about them.

Only six per cent of Toronto homeowners took advantage of the city's flood resilience subsidy program, she said. When floods hit the city last year, she said the average cost to affected homeowners was $43,000.

The sentence at the heart of your complaint is the very final one. You wrote that the $43,000 figure was “misstated”. It reflected the Intact Centre’s Toronto 2013 Flood Report, not the 2018 one (i.e. - the article states “last year”). You also suspected that the calculations of the estimate are based on studies done in the United States by the National Flood Insurance Program.

You said more accurate numbers could be obtained from the CatIQ database, which you describe as “the definitive source for compiled flood damages from Canada’s insurance companies.” Based on the number of claims and total value of payouts from the 2018 storm, you suggested that a more accurate number was $18,509 rather than $43,000. You wrote:

I believe that it is important to clarify given the fact that urban flooding is a significant issue, the costs of risk reduction are immense, and sound economic data and analysis is required to make evidence-based decisions on damage reduction management strategies. Flood damage data is a key piece of this economic data and many municipalities have cited the $43,000 value in federal infrastructure grant applications, which may not reflect actual damages, and could therefore adversely affect how scarce resources are allocated to address an important infrastructure challenge. 

MANAGEMENT RESPONSE

Paul Hambleton, the Director of Journalistic Standards and Practices, responded on behalf of CBC News:

To be clear, the story quoted Natalia Moudrak, director of climate resilience at the University of Waterloo’s Intact Centre on Climate Adaptation: “When floods hit [Toronto] last year, she said the average cost to affected home owners was $43,000”. That information is also included in “Weathering the Storm: Developing a Canadian Standard for Flood-Resilience in Existing Communities”, a report published in January and co-authored by Ms. Moudrak.

In a footnote, the report attributes that estimate to the Insurance Bureau of Canada (IBC) “based on Toronto flooding in 2013”. However, you wrote, the actual source is FEMA’s National Flood Insurance Program (NFIP) cited in a July, 2012 story in Forbes. The story cites the interactive “Cost of Flooding” found on the NFIP page as estimating nearly $40,000 damage to a 2,000 sq. ft. home after a 6-inch flood.   

It’s interesting to note that in looking at it now, almost seven years later, “Cost of Flooding” estimates damage of a little over $20,000 for a 1,000 sq. ft. home and about $52,000 to a 2,500 sq. ft. one-storey home. (There was no estimate for 2,000 sq. ft. home).

It’s pretty clear that there is a range of estimates and, it seems, little public information about how those numbers were reached. But you have touched on an interesting issue here.

On one level, while reporters can tell us what they see and hear, there are many things that they don’t witness or can’t know. In those instances they attribute the information. That way, readers know the source and can make their own judgment about its reliability. In this instance, we attributed the information to Ms. Moudrak, identifying her position and the organization she works for.

REVIEW

In a perfect world journalists would have expertise in every subject they cover. In the real world, many reporters, along with their editors, are generalists who strive to learn as much as they can in a short time so they can report faithfully and accurately on the subject at hand. 

This means that there are times where they reasonably rely on subject experts to explain how something works, why something happens, or what might happen next. It might be a doctor, a realtor, or a marketing executive. In each case, the reporter looks to use their expertise as a way to improve the story with informed insights. 

In such situations reporters willingly put themselves at the mercy of the expert’s knowledge. If an expert were to give bad information, CBC’s Journalistic Standards and Practices doesn’t let either of them off the hook. There is a section called “Responsibility and Accountability Related to Interviews” which reads as follows:

CBC takes responsibility for the consequences of its decision to publish a person’s statements in the context it chooses. When we present a person’s statements in support of our reporting of facts, we ensure that the statements have been diligently checked. In the case of comments made by a person expressing an honest opinion, we ensure that the opinion is grounded in facts bearing on a matter of public interest.

The interviewee also takes responsibility for his or her statement. As a general rule, we offer the interviewee no immunity or protection from the consequences of publication of the statements we gather.

Sometimes the experts provide a recitation of facts, but not always. Often they are called on to analyze a situation or express an opinion related to their field. It is sensible that there is wide latitude in these cases for what constitutes reasonable comment. Realtors may disagree on which way the housing market is going. Marketers may clash over whether that new trend will fizzle. Doctors may have varying levels of enthusiasm for a prospective new drug.  

The estimate of how much damage the average affected homeowner experienced during Toronto’s big summer storm of 2018 falls into this category of commentary and professional judgment. There is no single demonstrable number that has universal support, so the reporter went looking for someone to estimate the total.

You disagreed with the Intact Centre’s methodology. Instead, you pointed to the CatIQ database, which is an excellent starting point. However, as you know, that database represents only the payouts insurance companies made to people who put in a claim. Others might think you should add in property damage not covered by the insurance policy, or people who opted not to file a claim. There are other expenses that could be considered as well. Should you include the value of time homeowners missed from work as a result? What about the cost of infrastructure repairs absorbed by government, or the cost of policing, firefighters and ambulance drivers? Should they be included or costed separately?

Looked at through a different kind of prism, how much of the damage was caused by flooding, and how much was caused by wind, or by lightning? 

Now, I recognize that you know a great deal about all these subjects. You have your own expertise, and you have told me about work you are doing that seeks to consider both direct and indirect costs to come up with a ratio of overall losses to insured losses. However, it is apparent that determining an estimate has at least some degree of subjectivity. 

With all that in mind, it was acceptable journalistic practice for the CBC reporter to use the Intact Centre as its expert source and ask them to estimate the damage from a big storm. The Intact Centre is an applied research centre affiliated with the University of Waterloo. That may not bring it reputational immunity, but it does come with an inherent base level of credibility. The reporter was entitled to use Ms. Moudrak as an expert, so long as he attributed the estimate to her. I disagree with you that the JSP standard of “diligent checking” of her statement meant the reporter should have done extensive research to test that estimate. It is more reasonable to believe that diligent checking refers to facts that can be categorically confirmed or refuted, not to a matter of professional judgment such as this. 

Nonetheless, you are correct that the number in the story WAS the wrong number, regardless of the quality of the estimate. The $43,000 figure did not represent the Intact Centre’s estimate for the 2018 Toronto storm, but instead was their estimate for the 2013 Toronto storm - something raised by you in your complaint, acknowledged by Mr. Hambleton in his response, and confirmed in my own communication with Ms. Moudrak.

That this was wrong is, naturally, a violation of policy. That it has not been corrected means it continues to be so. It does not matter whether the original misunderstanding was caused by the source or by the journalist. It ought to be clarified for the record, and for the readers. 

Further, I noted while reviewing the story that there is no note on the web page acknowledging the two other corrections prompted by your initial complaint. This is a second violation of policy.   

I have a broader concern that there is a pattern of imprecision in CBC’s coverage relating to flood events. You provided me with a list of other recent CBC stories which make reference to the $43,000 damage estimate. Several confuse the matter by not indicating this is a specific estimate for the 2013 Toronto floods. One said, “The average basement flood in Ontario costs the homeowner $43,000.” Another said, “The average payout for a flooded basement is $43,000 and rising.”  These types of references take a single (and unusual) event in 2013 and treat it as if it is now a generic standard.

Reporters and editors need to ensure they understand what's included (and what's not) in any estimates provided, and they need to ensure that they associate that estimate with the correct event - or events, as the case may be. Based on my review, that is not happening consistently enough. 

All of this needs to be distinguished from your belief that the Intact Centre’s $43,000 estimate to be incorrect, even when attributed to the 2013 storm. I would encourage CBC News to take your perspective into account, but that is as far as I will go. It is not my intention to take sides on the quality of the Intact Centre’s estimate. If journalists continue to find the Intact Centre credible, they continue to be free to consult them for stories.

Sincerely,

Jack Nagler
CBC Ombudsman

WEATHERING THE STORM: DEVELOPING A CANADIAN STANDARD FOR FLOOD-RESILIENT EXISTING COMMUNITIES

I'm glad Intact Centre on Climate Adaptation could build on my work for their new report WEATHERING THE STORM: DEVELOPING A CANADIAN STANDARD FOR FLOOD-RESILIENT EXISTING COMMUNITIES https://www.intactcentreclimateadaptation.ca/wp-content/uploads/2019/01/Weathering-the-Storm.pdf

The report relied on input including this blog post prepared for the Intact Centre authors' consideration: Reducing Flood Risk from Flood Plain to Floor Drain Developing a Canadian Standard for Design Standard Adaptation in Existing Communities  https://www.cityfloodmap.com/2018/02/reducing-flood-risk-from-flood-plain-to.html
(e.g., as noted in the March 2018 draft of the Intact Centre report)

The Intact Centre Weathering the Storms report has some gaps regarding the key question of the role of green infrastructure, natural infrastructure and engineered low impact development practices, in terms of mitigating existing urban flood risks. In other reports, Intact Centre has advocated strongly for green infrastructure as a core flood risk mitigation measure - as in the 2018 report  Combating Canada’s Rising Flood Costs: Natural infrastructure is an underutilized option, co-written with IBC and IISD which stated (page 4):

“Nature conservation and climate resilience go hand in hand,” said Craig Stewart, Vice-President, Federal Affairs, IBC. “This report emphasizes that coastal and inland flood risk can be reduced by conserving and restoring natural infrastructure, such as wetlands and coastal marshes, and that the return on investment of natural infrastructure can at times exceed that of built infrastructure, such as dams and dikes. Nature can be our best friend in lowering the risk of exposed communities.”

That Combating Canada's Rising Flood Cost report also promoted "green infrastructure" measures like open creeks, natural ponds and underground storage tanks to mitigate existing flood risks saying (see page 4):

"Fortunately, as documented in this report, flood risk can be limited through conservation and restoration of natural infrastructure features, such as ponds, wetlands and vegetated areas. This report demonstrates how to quantify the benefits and costs of these natural features as a strong complement or a viable alternative to grey infrastructure option for flood mitigation."

and

"natural infrastructure merits consideration alongside grey infrastructure solutions as a means of limiting flood risk across all levels of government and all jurisdictions"

Unfortunately, the Combating Canada's Rising Flood Cost report had many gaps in terms of the rigour in which flood benefits were assessed in case studies, such that analysis was characterized as "number stretching" and "concept massaging" in a review in the Financial Post (see Terence Corcoran article here). My review of those case studies agrees with the Financial Post assessment, since engineering and economic analysis was lacking - for example, one-time capital cost differences were reported as recurring annual ecosystem services for one case study (Oakville natural channel), local flood damages were replaced with higher, arbitrary 'meta-analysis' values for another (Manitoba wetland). In addition, the report's key case study (Brampton Metrolinx parking lot) misclassified a conventional grey infrastructure storage tank as green infrastructure, and relied on arbitrary river flood damage values a tributary with no actual river flood damage risks. A review of these and other case studies was in my 2018 CWWA annual conference presentation - see presentation here.

And in a recent report, TOO SMALL TO FAIL: Protecting Canadian Communities from Floods, Intact Centre notes "Flood Risk Mitigation Projects" include rain gardens, bioretention, and permeable pavement and that these are practical and can be applied nationally calling these (page 13):

"practical adaptation solutions that could be replicated in communities across Canada to limit flood risk at a local level"

That earlier report concludes that (page 38):

"If future projects are deployed on scale, the additive benefits could materially reduce the costs of flooding at the provincial and federal level."

But, despite the strong promotion in earlier reports, the new Weathering the Storm report only weakly advocates for natural infrastructure preservation and low impact development practice (green infrastructure) consideration alongside grey infrastructure to address overland flooding, and the cost-effectiveness is left up in the air. The new report notes (see page 34):

"Maintain natural infrastructure (e.g., wetlands and watercourse corridors) and consider low impact development practices to complement grey infrastructure solutions for stormwater management"

The report notes the Capital Cost is "Med" (i.e., medium) and the Ease of Implementation is "Moderate". This is misleading as it conflates two completely different strategies. Maintaining wetlands and natural corridors in existing communities has no capital cost, not medium capital cost, and is certainly an effective damage mitigation planning policy. Historically, it has been proven that Ontario's floodplain management policies have lowered flood damages relative to other jurisdictions that do not have proactive management and preservation of valley corridors (see example comparison with Michigan).  But low impact development practices have a very high capital cost and a very high operation and maintenance cost too. To put a range of risk management measure capital costs into perspective we can look at Markham's '"green" land use policies, lot-level best practices and programs, and its sewer capacity upgrade programs (grey infrastructure), and compare those unit costs to low impact development (green infrastructure) unit costs (updated 2019-01-26):

Preserving Wetlands and Watercourse Corridors: $ 0 / hectare (lands are dedicated to City)
Sanitary Downspout Disconnection & Backwater Valve Subsidy Program:  $ 1,300 / hectare
Sanitary Sewer Capacity Upgrades: $ 11,000 / hectare
Storm Sewer Capacity Upgrades: $ 120,000 / hectare
Low Impact Development / Green Infrastructure Retrofits: $726,000 / hectare

So the Intact Centre report mixes a no cost land use policy with a very high cost physical intervention, and averages a medium cost. This can only create confusion as to what types of green infrastructure are truly cost-effective. While earlier reports cite specific practices as flood control measures, e.g., with the Too Small to Fail report identifies i) Mississauga's water quality bioswales and permeable pavement, ii) Dionis-Désilets retention basin vegetation planting, and iii) Halifax St Mary's Boat Club shoreline stabilization, the Intact Centre Weathering the Storm report does not even define what low impact development practices it has considered, and only refers to green infrastructure once in a case study (see page 29), however that was in the context of non-flood considerations of "drinking water supply, water quality, soil erosion, water balance, and overall public well-being". Hopefully there can be clarifications in follow-up work.

As the new Intact Centre report applies to "Existing Communities" it is unclear if "Maintain natural infrastructure" reduces risk at all or just maintains existing risk. The title to Section 4.4 Selected Physical Interventions to Reduce Flood Risk, suggests reduction was intended.

Comments shared by those in the acknowledgement list for the report included the need to downplay the role of low impact development measures, and the need to consider cost effectiveness of measures and not just cost. Those comments do not seem to be reflected in the report but the limitation is acknowledged that  (page 33) "Further, capital cost rankings are not normalized with
consideration of performance effectiveness." - this is in contrast with recent Intact Centre reports that make strong conclusions on cost-effectiveness, and relative effectiveness compared to conventinal practices - By including low impact development measures as a medium cost flood mitigation measure, the Intact Centre report appears to support earlier Intact Centre reports (like Too Small to Fail) that had essentially "reclassified" water quality improvement projects, such as Mississauga's Lakeview permeable pavement and bioretention units, as a flood mitigation projects.  The earlier Intact Centre/IBC/IISD report Combating Canada's Rising Flood Costs, also "reclassified" a conventional grey infrastructure storage tank on a Metrolinx parking lot as a "green infrastructure" project. Clearly there is a need for more clarity on what low impact development practices or green infrastructure measures are, and what their individual costs are. Without this, it is challenging to determine what practices or measures are truly cost-effective and to what degree they should be considered in overall risk reduction strategies.

To help look at cost-effectiveness in this report, I had provided comments to the authors from August to October, 2018, however these were not accepted for consideration.  This included earlier analysis on grey and green cost effectiveness that has been refined and is that is summarized below. This analysis could fill that gap left in the Intact Centre report, showing how considering low impact development to complement grey infrastructure would affect total cost and benefit/cost ratios for flood mitigation.  In addition the effectiveness at achieving other watershed benefits such as water quality improvements and erosion mitigation can also be measured, considering the broader triple bottom line benefits of green infrastructure. This analysis summarized below is based on retrofitting Markham's pre-1980 service areas that are being evaluated as part of its city-wide Flood Control Program and its city-wide Wastewater Servicing Master Plan.  The study area is equivalent to an area of approximately 2360 hectares, or 25% of the city's urban area. Further results of this analysis will be presented in the Spring 2019 Water Environment of Ontario and conference and the 2019 TRIECA conference.

The table below illustrates a range of flood mitigation strategies within 25% of the pre-1980 urban area:

Strategy A - 100% grey infrastructure,
Strategy B - 100% green infrastructure, and
Strategy C - 90% grey + 10% green infrastructure,

The table includes the benefit/cost ratios associated with each strategy. Ratios are shown for flood damage mitigation, water quality improvement and erosion repair mitigation. Contact me if you would like to see the detailed calculations behind these values, or wait for distribution of the WEAO conference paper.

Grey and Green Infrastructure Benefit-Cost Ratios for Flood Damage Reduction, Water Quality Improvements and Erosion Mitigation (Pre-1980 Service Areas, City of Markham) - Approved Flood Control Program reflects Scenario A Grey Infrastructure approach.

The key take-away is that grey infrastructure (Scenario A) has the highest cost-effectiveness and highest benefit/cost ratio - this approach, with the majority of costs associated with storm sewer upgrades, aligns with the city's approved Municipal Class EA recommendations and Flood Control Program.  The green infrastructure / low impact development practices approach (Scenario B) has a very low benefit/cost ratio such that cost exceed benefits - over half of the Scenario B benefits are intangible based on a willingness to pay for water quality improvements. A blended approach with only 10% green infrastructure in the retrofitted urban area (Scenario C) reduces cost-effectiveness and the benefit/cost ratio relative to a 100% grey infrastructure approach (i.e., benefit/cost for flood mitigation drops from 2.52 to 0.80, making a strategy that adds 10% green infrastructure lose over two thirds of its cost effectiveness). Given these costs, it is clear that the Intact Centre's classification of grey infrastructure sewer upgrades is incorrect. The report notes (page 34) this physical intervention:

"Increase the size of deficient storm and sanitary sewers to allow for additional conveyance capacity"

has a "High" capital cost and that the ease of implementation is "Complex". In fact the capital cost and lifecycle cost of grey infrastructure are significantly lower than that of green infrastructure / low impact development practices. Further, the cost-effectiveness to provide flood damage reduction, shown in the benefit/cost ratio, is high which implies a low cost for the performance achieved.

The following chart shows how incorporating a range of green infrastructure (between Scenario A and Scenario B) affects total costs and benefit/cost ratios. In brief, given the high cost of green infrastructure, implementation of any amount in a strategy only lowers the overall cost-effectiveness (lower benefit/cost ratio). While some water quality improvement and erosion mitigation benefits accrue as more green infrastructure is implemented, the triple bottom line benefits do not offset the additional costs. This holds true even with generous water quality benefits that consider an intangible 'willingness to pay' for such improvements.

Correction Note: Scenario B (25% City-wide Green Infrastructure) corresponds to third row in table above (i.e., Scenario C)

It is a long-standing principle that flood mitigation measures be cost effective, and that benefits of deferred damages exceed project costs. Watt promotes this in Hydrology of Floods in Canada and Eckstein has done so since his founding work at Harvard in the 1950's. Maximizing benefits requires that incremental measures in a strategy proceed only where incremental benefits exceed incremental costs. Given that most urban flood reduction strategies are founded on proven, low cost engineering methods (i.e., grey infrastructure capacity upgrades), any further consideration of green infrastructure would have to demonstrate further incremental benefits exceeding cost - this consideration does not appear to be justifiable given the unit cost for implementation, especially within a strategy that has already reduced damages with core measures, making further incremental benefits harder to realize. The analysis above shows that even adding 10% green infrastructure to a strategy (10% of pre-1980's urban areas, which is only 2.5% of total urban areas) drops cost-effectiveness for flood control by over two thirds. Given the limited resources available for infrastructure upgrades to address flood risks, and most likely some funding limits, it would appear to unwise to limit total flood mitigation benefits that could be achieved by considering green infrastructure in the strategy. Keeping spending constant, 25% of a city could be retrofitted with Strategy A - 100% Grey Infrastructure, while only 8% of that city could be retrofitted with Strategy C - 90% Grey Infrastructure + 10% Green Infrastructure with similar funding. Higher costs with Strategy B - 100% Green Infrastructure would allow only 1% of urban areas to be retrofitted -note this reflects operation and maintenance costs as well as capital costs.

The Intact Centre Weathering the Storm report provides some very limited estimates of green infrastructure cost-effectiveness, and implies a favourable benefit/cost performance.  But the report fails to identify the flood benefits relative to other benefits, and it ignores local flood damage data in published research, substituting instead IBC/Intact Centre/IISD's 'meta-analysis' presented in the Combating Rising Flood Cost report. The Weathering the Storm report states (page 42):

"Performance monitoring results: In 2017, University of Saskatchewan researchers assessed the net economic benefits of Pelly’s Lake project at $3,700,148 CAD, assuming a 20-year life cycle and 3% discount rate. This assessment reflected the value of flood attenuation, nutrient load reduction (phosphorus and nitrogen) and carbon dioxide offset benefits."

In fact, the benefits quoted above were based on generic literature search flood benefits cited by IBC/Intact Centre/IISD and not the University of Saskatchewan's published research. The Combating Rising Flood Cost report reveals this as follows (page 20):

"In 2017, University of Saskatchewan researchers assessed the economics of Pelly’s Lake and disseminated their analyses in three peer-reviewed publications.61, 62, 63 The return on investment analysis that follows is based on these publications, with Table 3 summarizing the key inputs in the calculation."

Those Table 3 values are repeated in the Weathering the Storm report. So the Weathering the Storm report is not in fact University of Saskatchewan's assessed flood benefits. Rather benefits are per IBC/Intact Centre/IISD's earlier report stating (page 20):

"The unit flood risk reduction benefit ($740 per hectare) applied to Pelly’s Lake is adapted from two published meta-analyses of the benefits provided by wetlands in agricultural landscapes."

As noted on this blog in a previous post, the IBC/Intact Centre/IISD "meta-analysis" inflates the flood benefits from only a few percentages of total benefits using University of Saskatchewan published values to 20% of benefits.  It is questionable if terminology "performance monitoring results" should be used to characterize this "meta-analysis" based only on global literature values.  Also, the Weathering the Storm report fails to note the cattail harvesting benefits of the Pelly's wetland would not be consistent with the suggested approach of "Maintaining natural infrastructure (wetlands ...", due to the obvious habitat interference with such an activity.  Based on flood benefits alone, the Pelly's Lake project benefits would be less than the cost.

Conclusions in the Weathering the Storm report notes some next steps but fails to identify the need for robust benefit-cost analysis on mitigation measures, especially those green infrastructure measures heavily promoted in other recent Intact Centre reports.  Table 4 implies that green infrastructure that relies on infiltration would be part of mitigation strategies as it notes an advanced flood risk information requirement as "Detailed/discrete soil data to inform intelligent application of source control techniques (practices applied to reduce water runoff where it originates)". But no further examples of "source controls" are noted in the report, although these can be expected to include the "low impact development practices" identified for consideration in Section 4.4.2.  The Weathering the Storm Report capital cost classification for physical interventions is questionable in relation to green infrastructure relative to grey infrastructure - it does not appear to represent costs identified locally or in the US, nor reflect fundamental cost-effectiveness ranking as illustrated in the benefit/cost of various strategies above.  The report also conflates diverse types of green infrastructure, wetland preservation and low impact development practices, in a single 'catch all' group, despite the vastly different costs associated with these - correspondence with one of the authors in early 2018 revealed that no distinction is considered between the broad groups of green infrastructure including natural assets (wetlands), enhanced assets (rain gardens) or engineered assets (permeable pavement) - see definitions here. In the case studies, only meta-analysis is presented for an engineered wetland, and the flood benefits are not clearly identified, but rather aggregated with a range of other benefits.  Those benefits included 'cattail harvesting' that would not be practical in most instances where wetlands are valued for their natural heritage value, and where harvesting would have an adverse environmental impact.  Hopefully the gaps in the Weathering the Storm report can be explored in the development of national standards.

Catastrophic Losses in Canada - Have Flood Damages Increased Significantly Or Have Changing Data Sources Affected Trends?

Disaster Losses Are Up

Catastrophic loss trends have been reported regularly in Canada, often in relation to flood damages. These have often linked to climate change effects as well as other factors that may include aging infrastructure (not a significant factor in our mind), or urbanization and intensification (the true overriding factor in many urban centres). This post looks at how trends have changed in relation to changes in data sources.

GDP Adjusted Losses are Down

A blog post by the Institute for Catastrophic Loss Reduction (ICLR) discusses loss trend reporting by the Insurance Bureau of Canada. ICLR discusses but dismisses the calls for adjusting losses for growth, which is commonplace in Munich RE NatCatSERVICE analysis and reporting, and which is promoted by may others (this includes my paper in the Journal of Water Management Modelling which evaluated losses adjusted for net written premiums, and Roger Pielke Jr.'s work, such as reported here in Five Thirty Eight - see charts to the right - that also calls for evaluating trends considering GDP growth).

The ICLR notes "Normalizing disaster loss data to include such factors as growth in population, economic activity and building stock is not a simple undertaking. Further, there are many problems with using simple measures like GDP or insurance premium growth as a normalizer. For these and other reasons, I don’t want to go ‘there’ at this point ...".

So ICLR is content to us the following chart that does not include GDP adjustments:

Losses in Canada Unadjusted for GDP Growth - 1983-2007 Data per IBC Survey, 2008- Data per CatIQ.

The ICLR notes a change in the data source for the above graph: "Bureau data begins at 1983. From that year to 2007, IBC uses data it collected itself through various company surveys conducted immediately after significant natural disaster events. It also uses various data from Property Claim Services (PCS), Swiss Re, Munich Re and Deloitte. After 2007, the Bureau only uses data from Catastrophe Indices and Quantification Inc. (CatIQ)."

How does the change in data affect reported losses? We can look at how the increase in losses has been reported, for example by the ICLR in 2016:

Catastrophic Loss Trends in Canada. Effects of change in data source on reported losses pre 2008.

Below the ICLR chart, the timing of the change in data is shown. This indicates that the change in reported annual losses from $400M average up to 2008 to $1B average after corresponds to the change in data source in 2008.

More recently the Intact Centre on Climate Adaptation (ICCA) has reported trends in losses on TVO's The Agenda as shown in the chart below:

Intact Centre on Climate Adaptation cites changes in insurable claims on TVO (chart shown), with ICLR's noted change in data sources added below (IBC data up to 2007 and CatIQ data from 2008 onward).

Again, the change in data is added below the ICCA chart. The lower losses of $200-500M up to 2008 and higher losses typically over $1B from 2009 onward correspond to this change in data source.

Adjusting for data sources or for GDP does not really change priorities for flood risk and catastrophic loss reduction. Better characterization of the GDP-adjusted trend can give us insight into the effectiveness of past mitigation efforts, more-resilient design standards that are common in modern practice. Without such GDP adjustment, one would think that everything is built as disaster-prone as it was in the past. Also, understanding the cause of the trend in losses will help focus adaptation or mitigation efforts in the proper place - if increases are explained by GDP growth as opposed to changes in extreme weather (shown to not be a factor) efforts will be placed on adaptation infrastructure built to old, less-resilient design standards as opposed to mitigation (e.g., GHG reduction).

A more wordy comment has been added to the ICLR blog post.

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A paper Trend Analysis of Normalized Insured Damage from Natural Disasters, published in:
Climatic Change, 113 (2), 2012, pp. 215-237, by Fabian Barthel and Eric Neumayer, Department of Geography and Environment and The Grantham Research Institute on Climate Change and the Environment, London School of Economics and Political Science explores "Normalized" / GDP adjusted damages, exploring trends for different types of events.

As noted in their abstract:

"As the world becomes wealthier over time, inflation-adjusted insured damages from natural disasters go up as well. This article analyzes whether there is still a significant upward trend once insured natural disaster loss has been normalized. By scaling up loss from past disasters, normalization adjusts for the fact that a hazard event of equal strength will typically cause more damage nowadays than in past years because of wealth accumulation over time. A trend analysis of normalized insured damage from natural disasters is not only of interest to the insurance industry, but can potentially be useful for attempts at detecting whether there has been an increase in the frequency and/or intensity of natural hazards, whether caused by natural climate variability or anthropogenic climate change."

The following charts from the paper show an increase in deflated (non-normalized) damage losses over time, and virtually no change in normalized losses.

Global deflated insured losses from natural disasters

Global normalised insured losses from all disasters

Similarly, the following charts illustrate normalized trends for convective storm events (4165 disasters) showing a decrease, all storms including winter and other storms but excluding tropical cyclones (4369 disasters) showing a decrease, and for tropical cyclones (874 disasters) showing an increase.

Global normalized insured losses from convective events

Global normalized insured losses from all storm events except tropical cyclones

Global normalized insured losses from tropical cyclones

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The Government of Canada has reported that the majority of loss increases have been due to growth (more exposed people, assets and wealth), and that climate change 'may' be having an effect - this contrast many media and insurance industry comments. The true driver of increased losses was reiterated in the just-released Canada in a Changing Climate: National Issues Report (see post: https://www.cityfloodmap.com/2021/06/national-issues-report-identifies.html). Canadian loses have been normalized for growth and show a moderate increase over time - the report notes that earlier data may be incomplete, which would affect the normalized trend as well (more complete older data could decrease the trend).