Disaster Financial Assistance Arrangements (DFAA)

• Federal cost-sharing for eligible disaster expenses, with reimbursement rates ranging from 50% up to 100% depending on the funding stream and risk level (e.g., up to 90% for high-risk mitigation, 80-90% for response, 70-80% for restoration).
• An additional 15% of eligible repair/restoration costs can be accessed for disaster resilience enhancements when rebuilding damaged structures and assets.
• The Disaster Risk Reduction Incentive provides a financial incentive valued at up to 40% of the program’s financial threshold, based on a defined set of risk reduction actions completed prior to the disaster.
• The maximum eligible funding in the disaster mitigation stream is capped at 25% of the total eligible expenses in Funding Streams 1, 2, and 3.
• Advance payments are available, covering up to 30% of the federal share of estimated eligible costs; progress payments are released based on actual expenses, subject to risk assessment.

• Only provincial or territorial governments are eligible to apply for funding; companies, individuals, or other organizations cannot apply directly.
• Eligible expenses must be incurred as a direct result of a large-scale, distinct disaster caused by natural hazards in the province or territory.
• The project or activities must be part of the provincial or territorial disaster response, recovery, or mitigation efforts.
• Expenses submitted must be net of insurance payouts, and repair or replacement must be for uninsurable damage or assets.

Who is eligible?

• Small businesses (with annual gross revenues up to $15 million, subject to specific conditions)
• Non-profit organizations
• Charities
• Community organizations

Who is not eligible

• Departments and federal crown corporations, as well as enterprises owned or operated by the federal government.
• Public enterprises or crown corporations that operate on a profit-making model (i.e., that distribute profits or surpluses to government shareholders), except for those providing drinking water and sanitary wastewater services.
• Organizations primarily engaged in the management or sale of alcohol, cannabis, electricity, or in telecommunications (e.g., state alcohol or electricity companies, public telecommunications companies).
• Businesses or entities for which damages or losses are insurable (when adequate insurance coverage for the hazard is available and accessible in the region).
• Seasonal, recreational, or non-primary use properties (for businesses that manage seasonal or recreational accommodations, unless full-time rental is the main and permanent function of the business).

Eligible expenses

• Repair or replacement of essential business assets damaged by a natural disaster, up to standard replacement value.
• Repair or reconstruction of structures essential to a small business or organization to restore safe, functional operation.
• Cleanup and debris removal from business premises required to restore safe access and functionality, including removal of hazardous disaster-related materials.
• Expenses for temporary rental of space or equipment to resume business operations while repairs are underway.
• Repair/replacement of equipment, stock, and assets critical for business continuity (including specialized industry-specific assets, such as fishing gear, feed, seed stock, or harvested agricultural products not insurable).
• Costs associated with damage and repair appraisals conducted by professionals (e.g., engineering assessments, site inspections).
• Temporary access, security, and site stabilization to enable start of repairs (e.g., temporary fencing, securing premises, shoring damaged structures).
• Financial and psychosocial counselling directly related to recovery from a disaster event.
• Essential outbuildings, protective assets, access routes, and landscaping necessary for safe and functional business operation.
• Expenses incurred for evacuation, displacement, transportation, accommodation, and meals required during evacuation orders impacting business premises.
• Relocation costs for damaged business premises, if relocation is a cost-effective solution to reduce disaster risk (with appropriate documentation and restrictions on future use of vacated land).
• Up to 15% additional funding for disaster resilience enhancements to “build back better” and reduce future risk, on top of direct repair/restoration costs. Eligible enhancements must adhere to recognized disaster resilience guidelines.

Eligible geographic areas

• Provinces and territories of Canada (provincial and territorial governments are the eligible applicants)

• Adherence to the program guidelines by the applicant province or territory.
• Submission of a complete application including a general description of the disaster, the period and geographical area concerned, as well as an initial cost estimate.
• Compliance with the application submission deadline (within six months following the end date of the disaster, unless an exception is granted by the federal government).
• Verification and validation of costs and activities through financial and non-financial reports, including audits if required by Public Safety Canada.
• Factual justification of the direct causal link between the incurred expenses and the eligible disaster.

• The Disaster Risk Reduction Incentive allows provinces and territories to access additional federal funding based on pre-disaster risk reduction actions completed before the disaster occurred.
• Advance payments covering up to 30% of the federal share of estimated eligible costs are available early in a claim, based on risk assessment.
• There is a five-year timeframe to submit the final payment request, with the possibility to request extensions.
• A management control framework must be in place to ensure expenses are eligible and comply with the Guidelines and accounting practices.