Why your insurance likely won’t protect you if your basement floods


A new survey conducted by the University of Waterloo showed that few Canadians feel they are at risk for flooding, and few know if their insurance would cover flood damage.

A new survey conducted by the University of Waterloo showed that few Canadians feel they are at risk for flooding, and few know if their insurance would cover flood damage. (Jason Viau/CBC)

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Most policies don’t include ‘overland flood insurance’ — even if they do, there are limits.

Increasingly severe weather in Canada has made for changes in home insurance that could leave homeowners unprotected if their house is damaged in a flood.

The first thing to know: most home insurance policies don’t include flood insurance at all, explained Pete Karageorgos, director of consumer and industry relations with the Insurance Bureau of Canada.

Since about 2013, when Toronto experienced a record-breaking storm that flooded hundreds of basements, insurance companies have begun offering overland flood insurance, “typically as an add-on,” said Karageorgos.

In other words, if you didn’t sign up for it, it’s likely you don’t have it.

Poster of video clip

Karageorgos points to a 2016 flood in Windsor and Tecumseh, Ont., to illustrate how expensive flooding can be for homeowners — and how common it is for people to be caught unaware by their lack of coverage.

“In many cases there weren’t policies that had flood insurance, and those that did, there were usually limits,” he said.

One Windsor resident’s house sustained about $50,000 of damage, but his insurance policy only covered one-fifth of that.

Windsor Flood

Residents in Windsor and Tecumseh, Ont. were forced to do a major cleanup after a record rainfall in 2016. (Amy Dodge/CBC)

Don’t be fooled by wording, cautions Karageorgos: many policies might list coverage for water damage, but that refers to incidents like burst pipes or overflowing toilets, not severe weather and flooding.

He said homeowners should also be aware that if water is entering the basement by a crack in the foundation, for example, it falls under the category of seepage and could signal a maintenance issue that would also prevent an insurance payout.

Few Canadians know their flood risk

The introduction of overland flooding insurance to the Canadian market is having another effect, said Jason Thistlethwaite, director of University of Waterloo’s Climate Change Adaptation Project: Canadians are less likely to qualify for federal government disaster assistance.

Federal legislation, he explained, stipulates that if “insurance is readily and reasonably available,” then you don’t qualify for disaster assistance — even if you never actually purchased the insurance, or didn’t even know it existed.

“That language is interpreted differently by the provinces, but it’s confusing and it’s inconsistent, and it can be taken advantage of in the aftermath of a flood event,” he said.

Thistlethwaite is concerned that few Canadians have been given the opportunity to opt into overland flood insurance and that many are confused about what their policies cover.

Toronto storm 20130708

A City of Toronto investigation into the next 50 years of weather predicted increasingly intense rainfall, meaning floods like the one in 2013 might become more common. (Frank Gunn/Canadian Press)

His university conducted a survey of 2,300 Canadians about how they perceived flood risk, finding that 70 per cent of respondents had not been approached by their insurance provider about overland flood insurance.

They also found very few homeowners saw themselves as being at risk or knew if they were covered or not, “despite the fact that we know for the next 50 years that flood risk is going to increase.”

There’s a small silver lining though, at least if you live in Ontario — the provincial government is available to provide some disaster assistance.

“What Ontario has said is that their disaster assistance programs will cover costs that are not covered by insurance,” said Thistlethwaite.

But that won’t mean restoring your home to its previous lustre. “This is bare minimum replacement costs,” he said.

“There’s an incredible amount of paperwork, red tape and delays. … It pays to call up your insurance company.”

Problem will get worse, so be prepared

Extreme weather is expected to increase substantially in the next half-century, leading Karageorgos and Thistlethwaite to urge that people review their policies carefully and take steps themselves to protect from flooding.

Short-term actions to mitigate damage include pointing downspouts away from the house foundation, taking valuables out of the basement, and making sure sump pumps are working and that you have a backup in case the power goes out.


Maintaining your sump pump and having a backup will help you avoid the headache of cleaning a flooded basement. (CBC)

Thistlethwaite also recommends a list of large-scale actions including renovating with flood-resistant materials and raising the electrical box or heating materials to the second floor.

If all that sounds expensive, consider the cost of extreme weather in Canada so far.

Between 1983 and 2008, natural disasters cost about $100 million, said Karageorgos. Since 2009, “it’s gone up 400 per cent.”

As a result, he said, insurance premiums have risen as well, which, along with increasingly severe weather, is something Canadians will just have to get used to.

flooding calgary

A flooded parking lot in 2016 in Calgary is an example of Canadian natural disasters that are driving up insurance premiums. (Bob Clark)

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Professional body could be key to modernizing police


The College of Policing (pictured here) implemented the changes after three quarters of respondents to a public consultation said they wanted accreditation for existing skills
England and Wales College of Policing @ SE1 9HA Southwark Bridge Rd London.

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In his review of police oversight, Justice Michael Tulloch recommended that Ontario follow the lead of England and Wales and create a College of Policing to develop “a culture of professionalization through a more regulated body.”

Chief Constable Alex Marshall references midwifery more than you might expect for lifelong cop. But in his current role as chief executive officer of England and Wales’ College of Policing, the business of birthing babies helps explain how the world’s first professional police body came to be.

When a midwife arrives at a home, he explains, you assume that as a member of a regulated profession she is qualified to deliver a baby. She knows best practices for complications that arise, based on up-to-date research. She is properly accredited and has specialized skills.

But if a police officer shows up at the house next door, where a woman is being abused by her husband and their children are at risk, he’s not certain equivalent assumptions can be made.

“Are they qualified to the same level? Did they undertake the same continuing professional development? Are they up to speed with the latest developments in their profession?” Marshall, who has been in policing for nearly four decades, asks in a recent interview.

“Over here, I think if you make that comparison, we haven’t supported the front-line police officers sufficiently that the answer would be yes. The answer at the moment would be no.”

England and Wales are working toward that “yes” thanks to the ongoing move to professionalize policing, creating in 2012 a College of Policing similar to regulating bodies overseeing lawyers, doctors, teachers, nurses, midwives and more.

Headquartered in London, the policing college — which oversees 200,000 police personnel, serving 50 million people — is in the midst of implementing significant changes, including introducing post-secondary educational requirements, licensing for specialized roles within policing, and developing ongoing training to reflect the shifting demands of police work, including interactions with people with mental health challenges.

“In essence it’s to raise professional standards in policing and particularly to recognize that police work has changed really quite dramatically in recent years,” Marshall said.

The unprecedented model is one Ontario would be wise to study, according to Justice Michael Tulloch.

In his far-reaching report on police oversight the Ontario Court of Appeal judge recommended Ontario give “serious consideration” to establishing a professional body for policing.

Stressing that it would not replace the watchdogs he was tasked with reviewing, such as the Special Investigations Unit, Tulloch said a college of policing could ultimately reduce the work of the province’s oversight agencies “through the selection, promotion, and support of officers who embody the ideals of professionalism.”

Among the central aims of such a college, Tulloch said, would be establishing province-wide standards for hiring and promotion. Requirements needed to enter and continue in policing “remain largely static, ill-defined, and inconsistent,” Tulloch wrote.

All police officers undergo training at the Ontario Police College, located in Aylmer, Ont. which provides basic recruit training as well as refresher and specialist courses. But some services, including the Toronto police, provide their own additional training from the recruit stage onward, meaning there is no “consistent, province-wide professional standard.”

Additionally, a college of policing could establish greater mandatory education for all Ontario officers in the increasingly vital areas of anti-racism studies, mental health, domestic abuse, social and cultural said the development of a professional body could help achieve a more progressive and inclusive police culture from the ground up, countering the “indoctrination” that happens “as early as initial training.”

photo by fightyourtickets.ca

“Stakeholders told me that training emphasizes traits such as physical strength, stoicism, and loyalty to fellow officers. While those traits are admirable and may be beneficial to the work of a police officer, they should not overwhelm other traditional traits such as empathy and compassion.”

Indeed, during the development of England and Wales’ college, Marshall says there was initial resistance from police ranks, in part because of the “British Bobby” tradition — an old-school term for what’s now considered an outdated definition of a cop, prized for traits such as toughness and bravery.

“They need that as well, but that’s rather underestimating the critical thinking you need from people in policing now, dealing with complex child abuse cases, domestic violence cases, online cyber fraud — it’s not quite as it was when I joined 37 years ago.”

Buy-in from the front line, Marshall said, is “improving all the time,” though he acknowledges that there is still a long way to go. What has helped is sending the message that the college exists to help officers better understand the role of modern police.

The college’s code of ethics, for example, is intended to help officers “make difficult decisions and stay on the right line ethically — it’s not the naughty book on the things you can get wrong,” Marshall said.

Bruce Chapman, president of the Police Association of Ontario, said called a professional police college an “interesting concept” and said learning more about the England and Wales model is high on his priority list following Tulloch’s recommendation.

But he said there are “a million unanswered questions” about what college would look like in Ontario — including how existing training programs, such as post-secondary “police foundations” courses, would fit into the picture.

He also said there is already a similar training and standards requirements for specialized roles within policing.

“To be an expert witness in, say, the drug squad, you have to go through the educational component. So whether you attach a certification or a license to it, basically they are all certified anyway,” Chapman said. “If the college wants to standardize it . . . I don’t think we have any issues with it.”

Terry Coleman, who spent decades with the Calgary Police Service and is a former Moose Jaw police chief, agreed with an important distinction Tulloch made in his report: “policing language is always about training, but what we’re talking about is education.”

Coleman strongly supports the idea of developing a licence for some roles within policing, saying it could go a long way toward the central goal of policing today: the establishment and maintenance of public confidence, he said.

Paul McKenna, Paul McKenna, a public safety consultant and adjunct professor at Dalhousie University, also supports the professionalizing policing, saying that across Canada there needs to be an “unpacking” of what police academies teach.

“It still strikes me as very bizarre that in the 21st century, when we’re trying to create a different kind of officer — someone who has communication skills and can de-escalate — that we still spend huge amounts of time on close-order drills, so that we teach them to march.

“That to me symbolizes part of what is, perhaps, wrong with the model of police training right now.”

Ontario’s Attorney General Yasir Naqvi said his ministry, which commissioned Tulloch’s report on police oversight, will closely review the judge’s 129 recommendations.

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Manitoba insurance revokes Star Trek fan’s licence plate, says message is offensive


Pampers Ontario Licence Plate. photo by fightyourtickets.ca

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Manitoba Public Insurance asked a Star Trek fan to “surrender” his licence plate after complaints its message — ASIMIL8 — is offensive to indigenous people.

WINNIPEG—Manitoba Public Insurance has revoked a Star Trek fan’s personalized licence plate after receiving complaints that its message — ASIMIL8 — is offensive to indigenous people.

Nick Troller has been driving around with the plate for two years.

It’s held within a Star Trek licence frame that also bears the quotes, “We are the Borg,” and “Resistance is Futile.”

Troller tells CTV Winnipeg that on his favourite show, an enemy race of aliens called the Borg travel through the galaxy trying to assimilate other cultures into their own.

He says he thought the plate was funny and notes strangers and other Trek fans have complimented him and asked to take photos with the plate.

But Troller got a phone call Wednesday from a staff member at Manitoba Public Insurance who told him two people had complained that the word “assimilate” is offensive to indigenous people.

He also received a letter from MPI on Thursday demanding he “surrender” the plate immediately, telling him he can either get a new plate or a refund on the $100 charge.

photo by fightyourtickets.ca

“But that’s not the point,” says Troller. “We’ve become way too sensitive. You can’t say anything anymore to anybody.”

Ry Moran, from the National Centre for Truth and Reconciliation, insists the word “assimilate” is too offensive to be on a licence plate.

“For basically the entirety of this country’s history, indigenous peoples have been forcibly assimilated through really extremely destructive means and ways,” he says.

“Words like that, meant or not, have an actual impact on many people.”

MPI’s policy states that “plates cannot contain a slogan that could be considered offensive.” MPI says it takes such complaints “very seriously” and will investigate why the plate was approved in the first place.

photo by fightyourtickets.ca

Licence plates are property of the Crown and there is no appeal process.

Troller’s situation is reminiscent of a controversy in Nova Scotia, where a man named Lorne Grabher’s personalized GRABHER plate was revoked after a complaint that it was offensive to women.

The Justice Centre for Constitutional Freedoms said earlier this month that it plans to sue the Nova Scotia government over the revocation, which it sees as an infringement on freedom of expression.

photo by fightyourtickets.ca

The JCCF’s John Carpay said the GRABHER licence plate revocation is part of a wider trend in Canadian society.

“Canadians are becoming increasingly less tolerant of free expression,” he said. “You have more and more people who believe that they have a legal right to go through life without seeing or without hearing things they find to be offensive.”

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Should the LSUC limit Contingency Fees?

Update: see previous posts – April 23, 2017 Ontario has the most expensive auto insurance premiums in Canada and their rising again, April 15, 2017 Ontario roads safest in country but drivers pay the highest premiums, new report says, April 15, 2017 Ontario roads safest in country but drivers pay the highest premiums, new report says

A report by David Marshall, former CEO of the Workplace Safety and Insurance Board, found that the rates of death and injuries in Ontario are among the lowest in Canada, yet Ontarians pay the highest auto insurance premiums in the country.

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The report by David Marshall calls for faster and more efficient delivery of care to accident victims to avoid protracted legal disputes over benefits all too common under the current system.

The widespread use of personal injury lawyers to battle insurance companies indicates a “failure” in Ontario’s auto insurance system, says a government-commissioned report.

“There is clear urgency to make the accident benefits system simple and accessible without the need for legal representation,” says the report, written by David Marshall, former CEO of the Workplace Safety and Insurance Board. “In many ways, the need to have lawyers involved to negotiate settlements in what should be a straightforward, no-fault, accident benefits system signals a failure in the system.”

Marshall’s report, titled Fair Benefits Fairly Delivered: A Review of the Auto Insurance System in Ontario,” looks at the costs associated with Ontario’s auto insurance system and makes 35 recommendations to improve it. The report calls for faster and more efficient delivery of care to accident victims to avoid protracted legal disputes over benefits — disputes all too common under the current system.

Marshall states that personal injury lawyers charge approximately half a billion dollars in contingency fees annually, while insurance companies spend roughly the same in legal fees and expenses to defend claims. Every year, between 25 per cent and 35 per cent of claimants — about 15,000 to 20,000 people — hire lawyers to deal with their insurance companies, the report says.

“Clearly, a better way to deliver fair benefits to accident victims needs to be found,” the report says.

Claire Wilkinson, a Burlington personal injury lawyer and president-elect of the Ontario Trial Lawyers Association, which represents about 1,200 personal injury lawyers, said she agrees that if the accident benefits system functioned properly, people wouldn’t need lawyers.

“It’s always felt like a David-versus-Goliath battle,” Wilkinson said. “Individuals don’t have the financial ability to fight the power and financial resources of the insurance industry. So they turn to personal injury lawyers because we give them a voice and the ability to fight, to try to level the playing field.”

Marshall was appointed by the provincial government in February 2016 to review Ontario’s auto insurance industry and his report was quietly posted online this month. He is not giving media interviews, according to the Ministry of Finance.

As reported in the Star last week, Marshall’s study found that the rates of death and injuries in the province are among the lowest in Canada, yet Ontarians pay the highest auto insurance premiums in the country.

In the report, he singles out personal injury lawyers as contributing to increasing costs and recommends that contingency fees — “you don’t pay unless we win” — be limited, while advertising and referral fees be banned or restricted.

A Star investigation published in January found that clients were often in the dark about how the contingency system works, including what fees their lawyers were taking versus what fees the lawyers were actually allowed to take. In one case the Star found, a woman injured in a car accident hired a lawyer on contingency and ended up with just 25 per cent of the total settlement paid out by the insurance company.

Marshall recommends measures to improve transparency surrounding contingency fee arrangements, including making insurance settlement cheques payable jointly to lawyers and their clients so victims understand how much of the total payout they will receive. Additionally, Marshall says clients should be informed in writing of their right to appeal fees charged by their lawyers and where to do so. The Star found many personal injury lawyers do not inform their clients in writing that they are entitled to appeal their legal fees to the provincial fee assessment office.

Marshall recommends that contingency fee agreements also be filed with the province’s insurance regulator, which would perform spot checks to ensure fairness.

Under the current system, Marshall notes, lengthy legal battles often mean accident victims do not receive timely assistance with their injuries and as a result suffer financially. Many are forced to turn to “settlement loan” companies that provide temporary funds without a credit check but at high interest rates.

“There should be very little, if any reason to have to hire a lawyer or resort to a finance company to provide a bridge loan, especially in cases where there are minor injuries,” Marshall writes.

Wilkinson, from the trial lawyers association, takes issue with Marshall’s recommendations, saying her group and the Law Society of Upper Canada were already addressing many of the concerns identified in the report. For instance, the law society voted this year to cap referral fees and provide more guidance on acceptable advertising practices, she noted. The ceiling on referral fees has yet to be determined, but recommendations from a law society working group looking at the issue are expected this week.

Wilkinson said making settlement cheques jointly payable to lawyers and their clients could create logistical problems if the two parties live in different cities. And she said clients already have to sign releases that state clearly how much their cases are settling for before they receive their money.

Wilkinson noted that restricting the amount of contingency fees lawyers charge could create “a serious access-to-justice problem.” She said her group is working with the law society to create a standardized contingency fee retainer agreement that would be easy for the public to understand.

“The Marshall report, in a couple of places, seems to suggest personal injury lawyers are part of the problem here,” she said. “We are not in opposition to our own clients. We are working together to try to get our clients fair compensation.”

Although Marshall’s report states insurers spend roughly the same amount on legal fees and expenses that lawyers charge in contingency fees, Steve Kee, a spokesperson for the industry group Insurance Bureau of Canada, says no one really knows how much money lawyers actually take from settlements.

“While our services, products and premiums are regulated, legal fees are not. No one knows exactly what lawyers pay their experts for their own assessments, so we have no idea how much of this money never makes it in the hands of accident victims,” he said.

“In the best interest of all Ontario drivers, we believe lawyers should be required to submit to the Superintendent of Insurance all information about their fees — including contingency fee arrangements, disbursements to expert witnesses, court-awarded and settled costs, and referral arrangements.”

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Canadians have been paying income tax for 100 years


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The Canada Revenue Agency’s T1 General 2016 Income Tax and Benefit Return Form. Canadians have been paying income for 100 years. photo by fightyourtickets.ca

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What began as a “small wartime generator” now accounts for 51% of all federal revenues

Oh Canada: If it feels like you’ve been paying taxes for 100 years, you’re right. Canada’s personal income tax hits the century mark this year.

And what began in 1917 as a small wartime revenue generator has ballooned to accounting for 51 per cent of federal revenues today and a “costly, complex behemoth that’s difficult to administer and makes Canada very uncompetitive,” concludes a new collection of essays by the Fraser Institute.

“The fears policymakers had in 1917 when the personal income tax was introduced — that governments would become dependent on it and that it would hurt our competitiveness — have all come true 100 years later,” says William Watson, associate professor and acting chair of the department of Economics at McGill University and a senior fellow at the right-leaning public policy think tank.
Officially named the War Tax Upon Incomes, it came into effect on Sept. 20, 1917. Though it was to be reviewed as a revenue generator after the war, “at least one MP confidently predicted, and celebrated, that it was here to stay,” notes Watson.
And boy was that guy right.

It launched with a 4 per cent tax on all income over $1,500 for single people. For everyone else, the personal exemption was $3,000. In today’s dollars, those exemptions would be worth about $24,500 and $50,000 respectively. By comparison, the basic personal exemption for 2016 is $11,474.

As a share of total federal revenue, income tax was a mere 2.6 per cent in 1918.

The main impetus for its creation was actually something that was also controversial at the time: conscription.

“A phrase in the air that summer was ‘the conscription of wealth’,” writes Watson in one of the essays. “If young men were to be conscripted, wealth should be, too.”

The finance minister at the time said the income tax was needed to finance the up to 100,000 additional soldiers, sailors, and airmen that conscription would deliver.

There were no credits or exemptions for children or other dependents, and no capital gains tax like today.

Canada Revenue Agency’s headquarters in Ottawa. The Canada Revenue Agency was known as the Canada Customs and Revenue Agency (CCRA) until a federal government reorganization in December 2003, when customs enforcement was moved into the Canada Border Services Agency, part of the Public Safety Canada portfolio. The CCRA was short-lived, having been created in a November 1999 reorganization of the federal government, where it had been known for many years under its statutory name, the Department of National Revenue. Before 1927, it was known as the Department of Inland Revenue. It was also referred to as Revenue Canada under the Federal Identity Program of the Treasury Board of Canada. photo by fightyourtickets.ca

The little tax really grew during World War II, with a flat 20 per cent surtax imposed on all income tax payable by anyone other than corporations in 1939. That was followed by the introduction of a new tax on income known as the National Defence Tax.

One of the essays in the collection, entitled “Zero to 50 in 100 Years”, argues that Canada’s personal income tax rates on its best and brightest workers have made the country uncompetitive compared to other developed countries and most U.S. states.

“Canada is already uncompetitive with the U.S. on personal income taxes, and with the Trump administration vowing to reduce taxes further, that gulf will likely grow,” Watson said.

“It is ironic that a tax that was anathema to federal politicians during the first 50 years after Confederation, and that many believe was brought in and sold as a temporary wartime measure, has come to be the dominant source of federal government revenue,” says an essay by Lakehead University economics professor Livio Di Matteo.

Even the income tax form itself has ballooned. It was just 23 lines long in 1917, and now has 328 lines.

Watson noted that the one certainty about personal income taxes is that “finance ministers never stop tinkering with them.” And that its death “is not inevitable but it might be desirable.”

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