Costs of Crime in Canada, 2008

Summary

The present study provides estimates of the social and economic costs of crime in Canada. Drawing on a variety of methods documented in existing literature and other similar studies, an economic model was developed that outlined the financial costs associated with crime in Canada. Data sources used for the estimation included the Police Administration Survey, the Adult Criminal Court Survey (ACCS), the Integrated Correctional Services Survey (ICSS), the Canadian Institute for Health Information (CIHI), the 2004 General Social Survey (GSS) and various governmental publications.

In 2008, the total (tangible) social and economic costs of Criminal Code offences in Canada were approximately $31.4 billion.[1] This amounted to a per capita cost of $943 per year. However, this is likely to be a conservative estimate due to the unavailability of data in many areas. Despite best efforts to account for all the financial impacts of crime, only a partial picture of the true range of costs is ever available. The costs outlined herein were borne by the criminal justice system, victims of crimes and third parties in general. Details of the estimated costs of each category are presented in Summary Table 1.

The costs pertaining to the Canadian criminal justice system in 2008 amounted to about $15.0 billion for policing, court, prosecution, legal aid, correctional services and mental health review boards.[2] This figure accounted for approximately 2.5% of the total annual expenditures by all levels of governments in 2008. A breakdown of the total criminal justice costs by sector reveals that policing services used the majority of justice expenditures (57.2%), followed by corrections (32.2%), courts (4.5%), prosecutions (3.5%) and legal aid (2.5%).

The most direct impact of crime is borne by victims. Of the total estimated costs, $14.3 billion was incurred as a direct result of crime, for such items as medical attention, hospitalizations, lost wages, missed school days, stolen/damaged property. Specifically, productivity losses represented 47.0% of the total costs borne by victims followed by stolen/damaged property (42.9%) and health care costs (10.1%).

While crime has its most significant impact on victims, others suffer as well. Family members may grieve the loss of a loved one or take time off from their daily activities to accompany victims (e.g., to court or doctor's appointments). Governments also provide various victim services and compensation programs to help victims. All these costs are reflected in the costs to the third-party. In 2008, the total costs borne by the third-party were about 2.1 billion, including the costs to other people who were hurt or threatened in the incidents, government expenditures for providing victim services, running shelters and operating national crime prevention strategies, etc.

Prior to the mid-1980s, it was generally believed that the costs of the criminal justice system dwarfed the costs imposed on victims. Once economists began to include the intangible costs of crime such as pain and suffering and lost quality of life, this relationship was reversed. For example, victim costs accounted for 45.6% of the total estimated tangible costs as presented above, but would account for 82.8% of the total costs if those intangible costs were taken into account. However, placing a monetary value on intangible items is subject to considerable uncertainty and controversy. Many studies have attempted to estimate the intangible costs of crime borne to victims, but no study has been able to produce estimates without much addendum and much critique. Notwithstanding the differences in method among studies, the consensus remains that intangible costs are often the most expensive component of victim costs.

In the present study, it is estimated that the total intangible costs were about $68.2 billion in 2008, which increased the total costs of crime to $99.6 billion. See Summary Table 2 for details of the estimates of intangible costs. While intangible costs are borne by victims, they are presented separately from other tangible victim costs as these figures are based on more subjective criteria. Detailed calculations are presented in Appendix A-D.

In 2005, the Research and Statistics Division estimated the total costs of crime in Canada to be $70 billion. Apart from changes in the composition and consequences of crimes, characteristics of cases disposed in criminal court, legislation and inflation, improvements in the costing methodology and data sources used have resulted in a significant increase in the total costs of crime. As certain cost elements are not included (such as mental health care costs, life-time productivity losses, lost legitimate incomes for offenders and psychological impacts on family members, etc.), it is reasonable to suggest the current 2008 estimate of $99.6 billion ($31.4 billion+$68.2 billion) is a conservative estimate.


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