Ottawa Salus files $55 million lawsuit against insurers over flood damage to property

Ottawa Salus says a burst pipe caused extensive flooding damage to their building on Athlone Avenue in February 2023. The building has still not been repaired. (Shaun Vardon/CTV News Ottawa)

For more than 45 years, Ottawa Salus has provided services and homes to people living with mental illness in the Ottawa area.

In February 2023, a burst pipe caused extensive damage to their building on Athlone Avenue in Westboro forcing 40 residents to find new homes. The damage was so extensive that most of the building needed to be taken back to the studs before repair work could even begin.

Almost 18 months later the building still sits vacant due to a dispute between Ottawa Salus and their four insurance companies, including Intact Insurance.

As the dispute drags on and the 40 supportive housing units remain empty, because of this, Salus Executive Director Mark Macaulay announcing Tuesday they have filed a $55 million lawsuit against their insurers.

"For nearly a year and a half, Intact Insurance has operated in bad faith trying to bully and force us into taking millions less than we are rightfully owed,” Macaulay said. "Today, we stand $4.3 million apart between what Intact is paying and what our independent contractors are telling us what is required to finish the job."

Rideau Vanier Councillor Stéphanie Plante, a strong advocate for supportive housing, is disappointed it has come to this while the city facing a housing crisis.

"The fact that these 40 people are displaced from the community they once called home and probably relied on each other now in individual units scattered around the city, it can mean life or death for some people," Plante said. "Any time I hear about people being evicted or places not being renovated quickly enough or administrative delays its really is heartbreaking because housing is a human right."

In a Statement to CTV News Ottawa, David Barrett, Director of Media, Social and Owned Channels with Intact Financial Corporation, says they cannot comment directly about the case because it is before the courts.

“What we can say is that we have been working closely with Ottawa Salus on this matter and have already provided them with multi-million-dollar payments so that they could start the remediation process," Barrett said.

"This value was determined based on a thorough assessment of damages conducted by independent experts. In terms of outstanding matters, we have been actively participating in mediation efforts and have offered arbitration so that we can reach a resolution as soon as possible."

Macaulay is calling on Intact to do the decent and moral thing and honour the policy they paid for as soon as possible so the 40 vacant units can once again offer a safe and supportive space for those in need.

According to the lawsuit, Ottawa Salus says it will cost $7.5 million to fully restore the building. The organization says Intact Insurance has only paid $3.2 million to rebuild the building.

The lawsuit names Intact Insurance Company, Temple Insurance Company, Lloyd's Underwriters and Liberty Mutual Insurance Company.

None of the allegations have been tested in court.