Recent efforts by the Federal Government of Canada have devoted resources to mitigating disaster risk and identifying sustainable solutions for post-disaster housing reconstruction financing. In 2023, Canada committed funding to set up its National Flood Insurance Program. In parallel, the Department of Finance and Public Safety Canada plans industry engagement on solutions to earthquake insurance. In anticipation of the need to rethink post-earthquake housing reconstruction financing for single-family homes, the present study evaluates the feasibility of implementing three novel financing mechanisms in Canada, drawing inspiration from existing US and New Zealand programs. The proposed mechanisms include a grants program targeting low-to-moderate-income households, a low-interest loan program, and an affordable insurance program. Simulations of the impacts of M7 earthquake in the Strait of Georgia, British Columbia, are used to compare the post-earthquake uninsured losses in the status quo and if each new mechanism was in place before the event. Benefits are assessed through the reduction in uninsured losses, while opportunity losses measure the costs of each program. Results indicate that a loan program with an interest rate above 3.5% could offer benefits surpassing its opportunity cost, albeit with substantial initial expenses. In addition, introducing an affordable insurance program and a disaster fund shows promise but requires robust capitalization in its initial years. A combination of affordable insurance and low-interest loans could alleviate long-term debt for homeowners, particularly for earthquakes causing moderate losses.
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