We live in Calgary and the home we rent was not flooded. We did lose food from the power being off for 7days and filed a claim. We were refused today and they said it is because they don't cover flood damage and to contact the government for help.
Is there any sense in appealing? Should we go directly to the Alberta Emergency Management Act?

I've never had renter's insurance, but no HO policy I ever had covered food lost during a power outage. (I have no knowledge of the Emergency Act.)

Why would our agent waste our time and the insurance companies telling us to photograph the fridge and two freezers and submit a claim. Wouldn't it have been better to just say no you are not covered?
Is there any sense in applying to the government agency they told us to or just let it be?

Don't know... maybe the agent thought you were flooded, which would be why they would want pictures, I would guess?
I don't like insurance companies, period. My experience is that they deny claims and hope people go away. The burden on the policy holder is to read the policy carefully and keep insisting, and if that doesn't work, hire a lawyer to write a 'lawyer letter', a cheap simple letter demanding action.
Policies these days go on and on about what is not covered. Does yours say?

Joy it is hard to understand the fine print I can not read... I need new glasses :( I guess I can forward the letter to the government as they say and see what they say.

I have no idea of Canadian insurance coverage. I did find this article
Alberta flood victims mostly out of luck with insurance - Business - CBC News (http://www.cbc.ca/news/business/story/2013/06/21/business-flood-insurance-alberta.html)

It's your agent's job to explain. Ask to be read the place in the policy that disallows this specific claim. Take your policy in to their office.