Alternative federal budget 2026-27: Incarceration

This is from a larger publication, Alternative federal budget 2026-27: Bridge to independence

Introduction

Canada’s federal prison system is costly, ineffective, and misaligned with both the government’s mandate of operating a reintegrative prison system, as well as its current priorities of efficiency, and system modernization. Despite spending 3.79 billion dollars in 2025–2026 on federal incarceration,¹ the system is failing—producing and deepening many barriers for people who become incarcerated, their families, and Canadian society.

Overview

The 2025 federal budget marked a tragic but pivotal moment for Canadian penitentiaries, especially through the government’s Comprehensive Expenditure Review. Together they required the Correctional Service of Canada (CSC) to cut $132 million in operational spending over the next three years,² notably scaling back or canceling reintegrative programs such as postsecondary education, vocational training, prison librarian and other staff positions. The federal government also reduced or deferred infrastructure maintenance and healthcare staffing. These cuts further weaken a system already known to produce very preventable harms, deepening the gap between the CSC’s legislated mandate and its capacity to deliver a safe, reintegrative environment. The Canadian federal prison system is so dysfunctional that in 2025, Canada’s federal Ombudsman Dr. Ivan Zinger left his appointment early, due to inability to improve on known priority areas.³ Prior to these cuts, Canadian penitentiaries already produced consistent poor outcomes across health, education, employment, and reintegration outcomes.

In 2026, there are approximately 23,000 federally sentenced people in Canada (those incarcerated and those on parole).⁴ In 2024-2025, federal incarceration cost a staggering $3.86 billion. The average costs of federal incarceration per individual are vast:

It costs $150,505 to incarcerate a person for one year in a men’s prison
That cost is $259,654 per person per year in women’s prisons
Parole monitoring costs $38,418 per parolee per year

Incarceration remains one of the most expensive and least efficient interventions in Canadian society. Federal prisons are crowded, with increased double bunking and prisoner transfers which move people far from their communities and supports. Being on remand, or awaiting trial or sentencing while incarcerated, is associated with high risk of death in custody due to suicide or drug toxicity, as a review of deaths in custody from 2014 to 2021 from the Ontario Chief Coroner found.⁵ And these are just the direct costs of incarceration. Importantly, the United Nations Office on Drugs and Crime emphasizes that incarceration has a “detrimental social impact” and that mass incarceration produces a “deep social transformation in families and communities,” all of which point to the need for change.⁶

Canada’s reliance on incarceration is inconsistent with its international human rights obligations such as the United Nations Declaration on the Rights of Indigenous Peoples, the Mandela Rules, and the Bangkok Rules.

Indigenous people continue to be incarcerated at crisis levels, representing over 50 per cent of all people in prisons designated for women and over 30 per cent of all people in prisons designated for men, despite comprising only 5.0 and 4.9 per cent of the population, respectively.⁷ Neither Budget 2025 nor the 2026 Spring Economic Update made any mention of this national human rights crisis⁸ despite a federal action plan to reduce Indigenous overincarceration.⁹

A prevalence of disadvantage meets a system of punishment and barriers

Canada’s federally sentenced population represents some of the most disadvantaged people in the country. One indication of the socioeconomic barriers faced by people who become incarcerated is that the average educational completion level at the onset of a federal sentence is only grade eight.¹⁰

While CSC does prioritize high school completion for incarcerated people, their access to postsecondary education remains extremely limited. The absence of technological preparation, too, produces costly barriers to employment for previously incarcerated people upon release. Completing postsecondary education while incarcerated is strongly associated with improved safety, reduced recidivism, and better employment outcomes. Despite this, CSC recently cancelled a 50-year funding arrangement providing Quebec prisoners with CEGEP-level education.¹¹

Incarcerated people have no access to the internet in federal penitentiaries and most are still required to use floppy disks to save any school work. They rely on sparse access to shared computers, sometimes only two per penitentiary. This is hardly modern or efficient practice. During incarceration, families are financially responsible for incarcerated loved ones, who work for dollars a day while facing inflated costs for food, communication, and basic necessities. This produces generational poverty and systemic inequality.

The federal prison system is underpinned by assumptions that incarcerated people need to be punished, and those assumptions justify intentionally harsh conditions in Canadian prisons. These assumptions persist despite clear evidence of the harmful nature and costliness of such deprivation.

Post-release, barriers to work and housing prevent people from economic and social participation. Incarceration in Canada continues to lead to disproportionately poor social, economic, physical health, mental health outcomes, and all cause mortality compared to the general public. These barriers fuel cycles of incarceration and undermine public safety.

Health, aging, and the high costs of incarceration in Canada

Canada’s prison population is an aging population, in no small part due to the rise of life-sentenced people (a figure now approaching almost 29 percent of all federally sentenced people),¹² despite the well-documented reality that people “age out” of crime and pose significantly lower public-safety risks as they grow older. Maintaining an aging prison population is both illogical and costly, with escalating healthcare expenditures. Compounding the lack of infrastructure and resources is the fact that long-term incarceration reduces life expectancy by approximately 20 years.

Prisons’ harsh, violent, and unstable living conditions exacerbate pre-existing conditions and create disorders in previously healthy people. The burden of chronic illness created in prisons is ultimately downloaded onto provincial health systems.

The majority of federally sentenced people have substance-use and mental health considerations. CSC data indicates that between 75 and 80 per cent of federally sentenced people have identified mental-health or substance-use needs,¹³ underscoring the scale of unmet care. Addictions treatment programs are not part of prison programming. Instead, most federally sentenced people are placed on opioid agonist therapy without accompanying therapeutic support. In the community, these medications are meant to be paired with counseling; in prison, they simply replace street drugs.

Decarceration strategy

As the United Nations recognizes, and as is entrenched in Canadian law, incarceration must be a last resort. Canada must aim to reduce the overall current rate of persons incarcerated relative to the population by 30 per cent by 2034, and given levels of overrepresentation, incarceration rates for Black and Indigenous people must be reduced by 50 per cent of the current rate, relative to their proportion of the population, in this time. We take a broad view of decarceration to mean not only the release of people who are currently in custody, but also to reduce the number of people entering penitentiaries in the first place. The Federal Framework to Reduce Recidivism provides a strong overarching vision of decarceration by supporting five identified pillars central to breaking cycles of incarceration: housing, employment, health, education, and positive support networks.¹⁴

The act then directs the government to the following measures:

Implement evidence-based programs aimed at reducing recidivism.
Promote the reintegration of people who have been incarcerated back into the community through access to adequate and ongoing resources as well as employment opportunities.
Support faith-based and communal initiatives that aim to rehabilitate people who have been incarcerated.
Implement international best practices related to the reduction of recidivism.
Evaluate and improve risk assessment instruments and procedures to address racial and cultural biases.

The federal government released an implementation plan for the framework in November 2023, but made no investment to implement it.¹⁵

One clear action Canada can take is to reform the Criminal Record Act, so that people who have completed their sentences and are trying to work and build good lives are not permanently excluded from meaningful jobs and safe housing. Currently, long after people’s sentences end, restrictive criminal record legislation in Canada prevents them from gaining and maintaining employment and safe housing, among other things. One in nine Canadians has a criminal record, leaving 4.3 million people directly impacted,¹⁶ and at least eight million more as family members and dependents of people with criminal records.

Replenish grants and contribution programs

Canada’s community-based reintegration sector—organizations such as the Canadian Association of Elizabeth Fry Societies, the John Howard Society of Canada, the St. Leonard’s Society, and beyond—rely on the Nonprofit, Voluntary, and Community Organizations Grants and Contributions Program administered by Public Safety Canada—a very small but stable grant that has operated in Canada since the 1970s and provided core funding to the reintegrative sector.

This grant has entered the final cycle of its five-year funding stream, distributing a remaining 1.8 million across National Organizations serving reintegrative aims.¹⁷ These organizations are essential to achieving the goals of the Federal Framework to Reduce Recidivism, the Black Justice Strategy, the Indigenous Justice Strategy, and the United Nations Declaration on the Rights of Indigenous Peoples Action Plan. Replenishing the program is essential to achieving the government’s current priorities.

Moving health care to health providers

One legislative reform that would greatly reduce costs, improve individual health outcomes, facilitate continuity of care and support successful reintegration is an amendment to the Canada Health Act’s definition of “insured person.” The law presently excludes people sentenced to two years or more from access to public healthcare. There is nothing in a criminal sentence that relieves the provincial governments from their constitutional responsibilities around health care.

While continuing coverage for the approximately 14,000 people actively incarcerated across federal penitentiaries would be a minimal and appropriate expense for the provinces, it would be a saving to CSC. At present, the amounts the CSC pays to cover health care services provided by outside hospitals to federal prisoners have been increasing and were close to 27 million dollars in 2024–25.

Actions

The Alternative Federal Budget proposes a comprehensive roadmap to meaningfully and responsibly reduce incarceration by 30 per cent by 2035, by supporting decarceration while ensuring that the conditions of incarceration provide adequate mental and physical health care, and focus on rehabilitative and reintegrative services. To measurably achieve this:

The AFB will reverse the Correctional Service of Canada’s reintegrative program reductions and restore funding for postsecondary education, vocational training, reintegration supports, and institutional programming. It will invest in rehabilitative services to ensure that federally sentenced people have meaningful opportunities to prepare for safe and successful reintegration. This restoration is essential given that CSC’s 2026 cuts eliminated or reduced core educational and reintegration programs, further undermining its legislated mandate.

The AFB will amend the Corrections and Conditional Release Act to create a mechanism allowing the Correctional Service of Canada to authorize the discharge of individuals from custody at the point of readiness, which may occur prior to fixed parole eligibility or statutory release dates. This is an essential step toward shifting Canada’s overreliance on incarceration. This mechanism is particularly important in the context of CSC’s reduced rehabilitative capacity following Budget 2025 cuts, which otherwise prolong incarceration without improving public safety.

The AFB will amend the Canada Health Act to remove the exclusion of federally sentenced people from the definition of “insured person,” ensuring continuity of care, improved health outcomes, and reduced Correctional Service of Canada healthcare expenditures.

The AFB will establish a National Older-Adult Decarceration Strategy that creates clear pathways for transitioning aging and medically complex individuals out of federal custody and into provincial healthcare systems, long-term care, palliative care, or community-based supports. This strategy will reduce federal healthcare expenditures, improve health outcomes, and ensure that older adults receive care in appropriate settings rather than in prisons that are structurally and clinically unequipped to meet their needs.

The AFB will amend section 121 of the Corrections and Conditional Release Act and the corresponding provisions of the Corrections and Conditional Release Regulations to expand eligibility for compassionate release to include older adults, including those serving life sentences who no longer pose a public-safety risk. This will require removing the current exclusions in subsection 121(2) that prevent people serving life or indeterminate sentences from accessing compassionate release on the grounds of serious health deterioration or excessive hardship. This reform will modernize Canada’s release framework, align it with public-safety evidence and demographic realities, and prevent federal prisons from functioning as long-term care facilities for aging people whose needs cannot be met in carceral environments.

The AFB will amend the Criminal Records Act to implement a free and automatic spent-record process. This will ensure that people who have completed their sentences are not permanently excluded from employment and housing. This amendment will save Canadians an estimated twenty-five million dollars over five years, which can be allocated to implementing the Federal Framework to Reduce Recidivism.

The AFB will replenish and expand the Nonprofit, Voluntary, and Community Organizations Grants and Contributions Program at Public Safety Canada to ensure stable, long-term funding for the organizations that deliver essential reintegration supports.

The AFB will invest one hundred million dollars annually to support community organizations advancing the solutions identified across the Federal Framework to Reduce Recidivism, the Indigenous Justice Strategy, the National Action Plan on Mental Health and Criminal Justice, and the Black Justice Strategy, prioritizing commitments to reduce the overincarceration of Indigenous people, women, Black people, and those with mental health considerations.

The AFB will introduce integrated substance-use treatment in federal prisons that aligns with community standards and will modernize partnerships with community-based treatment providers to ensure people can address their addiction while incarcerated.

The AFB will transform the mental-health service model in federal prisons to ensure that it is measurably consistent with Canadian and World Health Organization standards of care.

The AFB will introduce vocational development assessments at intake, expand access to meaningful vocational opportunities through partnerships with community-based employment programs, and support postsecondary access for incarcerated people, including initiatives such as Walls to Bridges and Inside Out.

The AFB will introduce internet access in federal prisons to facilitate access to education and meaningful contact with family and community.

The AFB will support training and bridging initiatives to help frontline correctional staff transition into rehabilitative and community-based roles.

The AFB will support research into policy solutions for decarceration, including the development of community-based alternatives rooted in transformative justice, diversion programs, and Indigenous justice models. It will expand existing but underutilized community-based sentencing alternatives and develop a consistent metric to measure recidivism.

The AFB will conduct an external impact evaluation of Canada’s decarceration and prison reform strategy to ensure that it meaningfully reflects the experiences and outcomes of impacted populations, and measures the government’s responsibility to calls from the Office of the Correctional Investigator and other advocacy groups.

Finally, the AFB will invest in a public education campaign delivered by the Department of Justice and Public Safety Canada to build informed public understanding of why punishment-based models fail and how decarceration strengthens communities, combatting harmful fear-based narratives calling for more use of unproductive incarceration.

The Monitor

Our Schools/Our Selves

Alternative federal budget 2026-27: Incarceration

Introduction

Overview

A prevalence of disadvantage meets a system of punishment and barriers

Health, aging, and the high costs of incarceration in Canada

Decarceration strategy

Replenish grants and contribution programs

Moving health care to health providers

Actions

About the author

Alternative Federal Budget Working Group

Alternative federal budget 2026-27: Health care

Alternative federal budget 2026-27: First Nations

Alternative federal budget 2026-27: Health care

Alternative federal budget 2026-27: First Nations

Alternative federal budget 2026: Incarceration

Budget fédéral alternatif 2026 : Incarcération

We’re fighting for change and your donation helps!

Contact Us

News & Resources

Regions

Projects

About Us

Contact Us

Ways to Give