The federal government committed $31.7 million over three years in its latest budget toward a low-cost flood insurance program.
The insurance industry has been calling for such a program to help households at increasingly high risk of damage from flooding due to extreme weather.
The Insurance Bureau of Canada called the funding a "major step forward."
It says flooding is Canada's greatest climate-related risk, with more than 1.5 million households considered highly exposed to flooding.
Recently highlighting this risk was last year's hurricane Fiona, which caused flooding for many Atlantic Canadian homeowners whose residential home insurance policies didn't cover all the damages.
The Insurance Bureau says the new flood insurance program would consider damage caused by storm surges as well as riverfront flooding.