Crime rates in Canada drop but cost of crime rises to $85 billion in one year

While in 1998 Canada spent over $42.4 billion on crime—$15.5 billion on what we think of as the direct cost of crime and the remainder on the less easily measured consequences for the victims—today’s estimates reveal that Canadians spend over $85 billion being victimized by, catching, and punishing crime. Victims’ losses through criminal acts committed against them amount to over $47 billion, more than half of the total. The current cost of crime is over 5% of our national product and this is an underestimate.

The crime rate has been falling since the early 1990s and there is a paradox here since in many dimensions the cost of crime has risen, not fallen. At the same time as crime is declining, the cost of dealing with crime by the police, the courts, and the prisons has become greater. At least part of the reason for this increase has been the requirements of the justice system itself. To safeguard the rights of Canadians, the Supreme Court of Canada has imposed a set of evolving requirements on the police and prosecution that make it manifestly more expensive to capture and prosecute. This is not to argue that the courts should not impose these requirements. It is, however, important to understand their consequences and, of course, there are other contributors to the increasing costs.

Over the decade from 2002 to 2012 the crime rate has fallen by roughly 27%: from 7,700 to 5,600 crimes per 100,000 of the population. Nonetheless, the cost of dealing with crime by the justice system has risen by 35%. The greatest increases have been in policing (44%) followed by corrections at (33%). One of the puzzles has been that the incarceration rate has changed little since 1978 while the crime rate fluctuated from a 1991 peak of over 10,000 per 100,000 to 5,600 today.

Our measure of the cost of crime has many gaps. Canadian data do not permit an annual assessment of the cost of crime at this time. We have provided or developed annual measures for different components of crime, including the cost of the justice system and the cost of pain and suffering associated with the crimes that we measure. However, there are still no annual assessments of the costs of private security, business losses, medical costs, foregone productivity costs, and a number of other contributors to the overall cost of crime.