"Municipalities may be disincentivized to provide adequate risk information to property owners or developers, especially for high-yield taxable properties such as those on waterfronts, because the financial responsibility for damages falls to the DFAA when insurance is not available," the panel's report reads.
"It's really a perverse incentive in a way," Pentland said. "Why do they bother building in the right place if somebody's going to come and bail them out?"
It is a fair point, but I am wary of how we would adjudicate which areas are high risk. Frankly, if we were going to put those kinds of restrictions in effect, I would want to take it completely out of the municipalities' hands, and have an independent board review development and risks before handing out build permits. This would probably have to be run at a provincial level.