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Feds set aside $2.8-billion for Alberta flood recovery

Flooded homes at the Siksika First Nation East of Calgary on June 23, 2013.

JOHN LEHMANN/THE GLOBE AND MAIL

Ottawa has earmarked $2.8-billion to pay for Alberta's flood recovery costs.

Federal Employment Minister Jason Kenney told reporters Tuesday the amount is 90 per cent of the $3.1-billion in claims that Alberta submitted following devastating floods that hit southern Alberta in June.

The federal government reimburses provinces for up to 90 per cent of approved claims under the disaster assistance agreement between Ottawa and the provinces.

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"Big picture? This is going to be a huge, huge federal fiscal commitment to post-flood reconstruction efforts in Alberta and the $2.8-billion I do not anticipate that will be the end of it," Kenney said.

"I do anticipate Alberta will be coming back with additional information and eligible expenses and we're prepared to respond to those accordingly."

Severe flooding in southern Alberta forced thousands of people from their homes and devastated the Town of High River. Calgary and some other communities also suffered serious damage.

Kenney says the number isn't written in stone.

"I want to be clear – the final amount spent by the federal government could be more and it could be less. This final amount will not be known until all the recipients have been counted."

The total price tag for June's floods is more than $6-billion. The insurance industry is expected to cover another $1.7-billion of the costs.

Kenney said that Alberta will receive a "substantial," initial cash payment from the federal government in the current year – before the end of March.

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"I can't give you a precise date or precise figure but what this does demonstrate is we are keeping our commitment, we are complying with the spirit and the letter of the disaster assistance arrangement and at the end of the day, the federal government will end up paying for the vast majority of flood relief costs," Kenney said.

Alberta indicated earlier this year it would also ask Ottawa to help pay for flood prevention projects in addition to the costs of the flood damage. Kenney said that wouldn't be covered under the disaster assistance plan.

"There's no 90 per cent formula for funding the flood mitigation infrastructure," he said.

"If Alberta would like federal participation in the costs of future flood mitigation infrastructure, then it will have to include that in their submission for the renewed Building Canada Fund."

Alberta Premier Alison Redford said the province was pleased with the amount Ottawa is giving.

"This continues to be a work in progress, but in terms of where we are right now, we're satisfied with the response from the federal government," Redford said late Tuesday from Washington.

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"We anticipated somewhere around the number being what was being booked for next year, so it's entirely appropriate in the context of a budget forecast that this is where we are.

"We're very pleased to see this commitment so early in the process."

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