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REPORTING · 18th March 2010
Merv Ritchie
Skeena Bulkley Valley MP Nathan arrived at Terrace City Hall Wednesday afternoon for a briefing on the Penitentiary proposal and to provide his own economic update.

Cullen began by stating how unique Terrace was in the region he represents stating Terrace seems to have moved on from waiting for the forest economy to improve and is looking at different options for the economy. He then moved on to discuss the recent federal budget stating it was a 54 billion dollar deficit, which the government expects to balance by 2015 to 1016. Cullen claimed the Parliamentary Budget Officer, Kevin Page, was making comments on this and as he was describing this he was interrupted by Carol Leclerc asking about this being Sheila Fraser’s role. Cullen explained how Fraser comments after the fact, referring to her report on the Sponsorship scandal coming 2 years after the last cheque had been cut. Page, whose position was created after the Sponsorship scandal, investigates current and ongoing issues such as how much the war in Afghanistan is going to cost.

Cullen then spoke about the end of the stimulus funding program. He described his perception that the government has a theory the economy has recovered. Cullen told the Councillors he feels, as does his colleagues back in Ottawa, using the gas tax to fund local programs would be much more effective. A one cent tax delivered to local communities could have many small and quickly achieved projects completed. He stated the government wouldn’t like this as they wouldn’t be able to claim responsibility and have as many ribbons to cut. Councillor Pollard smiled claiming they could then get the credit, referring to the City.

Moving on to the Correctional Facility, Cullen stated he had just received a copy of the feasibility study and didn’t have time to read it, however he had some comments on the issue. He questioned out loud what the cost of increasing sentencing was, which is at the core of the need for more penitentiary space.

He spoke about California and how they failed to consider, and put money into their ‘3 strikes and you’re out’ program for incarceration, doubling their prison population. He then referred to their bankrupt economy. Cullen stated it costs $110,000 per prisoner per year and how some of these new costs will be a provincial responsibility.

He described how Bill C-15, the ‘Law and Order Bill’ was killed when the Harper Government recently shut down parliament but stated he expects it to be back with the other bills such as the one set to reduce the two for one credit for time served.

Cullen had very little positive news to bring from the Federal Government, calling the HST a “Silly Thing”. He described the corporate tax rates as being 12 points lower than the US and how they were borrowing money for tax cuts. Free library computers were cut, then the money found after a backlash, wind farm subsidies cut altogether, and all of the infrastructure programs ending.

At the end Brad Pollard asked what he meant by Terrace being unique. Cullen responded by talking about the work on food diversity adding Terrace should take comfort in having a much more mixed economy. Councillor Martindale asked if he could help with a new CN overpass and was told the time is now. As the Port in Prince Rupert is now working on expansion plans, this would be the time to pursue the effort and encourage CN and the Federal Government to put these issues in their capital budget plans.

The Feasibility Study on the Federal Penitentiary in Terrace Presented to Council is reproduced below. A true copy can be obtained at Terrace City Hall.


Executive Summary

The construction of a new correctional facility in Terrace, BC would provide socio-economic benefits directly to the community and surrounding areas. Not only will the economy benefit from jobs created for construction and operating within the community, but the sociological benefits of interning prisoners near their communities and families should not be discounted.

There is a foreseeable increase in sentence terms and numbers of inmates which will necessitate additional inmate capacity. Currently there is insufficient capacity to absorb any significant increase in inmate populations. Existing public opinion is against increased prisoner capacity to be built in high density population centres and future locations should in communities that support the undertaking.

The community of Terrace has expressed interest and support as a location of a future correctional facility. An appropriate location has been identified for construction of a new correctional facility. The economic impact of a new facility within the community would be approximately $170 million in construction costs with an annual operating budget of $42 million.

Over a 20 year period, the construction and operations of a new correctional facility in Terrace would have a direct economic impact of $862 million.


The construction of new correctional facilities is required to support expected increased inmate populations in the next three to five years. The placement of new facilities should be in locations and communities that support them. This makes it easier to move forward with the facilities and provides significant economic opportunities for those communities.

This report examines the basis for new correctional facilities, the economic impact from construction and operations, and the overall benefit to Terrace, a rural community in Northern British Columbia.


A number of bills introduced by the federal government in the House of Commons are expected to be passed into law. These bills are expected to have an impact on inmate population in both federal and provincial correctional facilities.

Bill C-15: Minimum Sentences

On February 27, 2009 the Minister of Justice, the Honourable Robert Nicholson, introduced in the House of Commons Bill C-15 to amend the Controlled Drugs and Substances Act (Library of Parliament, 2009a).

Bill C-15 seeks to amend the Controlled Drugs and Substances Act ("CDSA") and thereby the Criminal Code to impose minimum sentences for certain serious drug offenses such as dealing drugs for organized crime purposes or when a weapon or violence is involved.

Bill C-15 specifically mentions that in 2006/07 that approximately fifty percent of all drug-related court cases do not result in convictions and convictions rarely result in sentencing incarceration. The majority of offenders only receive probation. This data has drawn the conclusion that there are not sufficient penalties defined in the CDSA to act as a deterrent.

Currently the CDSA does impose maximum penalties for drug offences but there are currently no mandatory minimum penalties for drug related offences. Primarily the CDSA offences include possession, "double doctoring," trafficking, importing and exporting, and production of substances denoted within the CDSA.

Bill C-25: Credit for Time Served

On March 27, 2009 the Minister of Justice also introduced in the House Bill C-25 to amend the Criminal Code to limit the credit a judge may allow for any time spent in pre-sentencing custody (Library of Parliament, 2009b). This limit is meant to reduce the "credit for time served" and impose longer incarceration periods. Bill C-25 is also known as the Truth in Sentencing Act.

Currently the Criminal Code allows the courts to take into consideration time spent in pre-sentencing custody. According to the Criminal Code the court is not required to do so; however the Supreme Court of Canada has the opinion that courts must justify any reason for not reducing sentences by taking into account pre-sentencing custody time (R. v. Wust, 2000).

This has resulted in the majority of cases whereby sentencing convictions are reduced by double or, in some jurisdictions, triple time spent in pre-sentencing custody. This has provided an incentive for incustody accused expecting to be convicted to maximize the pre-sentencing custody timeframe to ultimately minimize the resulting incarceration time. The changes introduced in Bill C-25 will result in a one day for one day recognition of pre-sentencing custody or in rare occasions one and one-half days when pre-sentencing custody is determined to have circumstances that warrant greater recognition.

Bill C-52: Mandatory Jail Sentence for Fraud

On October 21, 2009 the Minister of Justice also introduced in the House Bill C-52 to amend the Criminal Code (Sentencing for Fraud) and creates a mandatory jail sentence for fraud over $1 million (Library of Parliament, 2009c). Bill C-52 is also known as the Retribution on Behalf of Victims of White Collar Crime Act.

The aim of Bill C-52 is to provide restitution for victims of large scale fraud and permit the courts to impose mandatory jail sentences after consideration of victim and community impact statements. Generally these impact statements will provide the courts with additional factors when considering sentencing such as the financial and psychological impact of the fraud on the victim(s) and their resulting circumstances.

Inmate Population Implications

All of these bills will result in significant increases in prison populations. The minimum increase for Bill C-15 alone is expected to be 10% (Scoffield, 2009) and together the bills have the possibility of increasing prison populations of upwards to 70%. When the United States implemented similar sentencing policies in 1985 there was an increase in prison populations over 15 years of 700% (Drucker, 1999).

The volume of incarcerated offenders has reached critical capacity, evidenced by inmate-to-cell occupancy levels averaging 185 per cent in provincial correctional facilities (Ministry of Public Safety and Solicitor General, 2009). The challenge for many of these facilities are that they were constructed in 1800s and early 1900s, are expensive to maintain and difficult to increase inmate capacity.

It has been recommended that construction of mixed-use regional facilities be constructed to both deal with organic prison population growth and the likely results of a tough on crime political approach. These mixed-use facilities would incorporate distinct minimum, medium, and maximum security areas within a common complex. These regional complexes could have as few as 500 inmates up to a maximum of 2,000 (Correctional Services Canada Review Panel, 2007).

The regional complexes would be outfitted with advanced technology to permit video remand, sentencing, and visitation. The benefit of regional complexes is a model of more effectively correctional management and reduced cost as inmates would not be required to be transported for court hearings, change of status from remand to sentence, or to facilitate visitation. Additionally population density within a facility would allow inmates to access a broader range of support services such as physical health, mental health, drug treatment programs, et cetera without being required to be transported offsite for specialized support.

The maintenance of inmates within the same regional facility from remand, during the sentence, and reintegration also has benefits of improve community and familial relationships and support to improve quality of life issues (Canadian Families and Corrections Network, 2007).

An independent review commissioned by Correctional Services Canada conducted by Deloitte & Touche suggested that moving forward with "business as usual" methodologies and practices should not be applied to the regional complex model and "new operating approaches and standards" should be considered for this new transformational business model.

Economic Impact Analysis

Correctional facilities have a significant and bone fide economic impact on the communities they are situated within. This impact is both during for capital and operational reasons. Capital reasons include new construction and infrastructure maintenance. Operational reasons include human resources and consumable supplies required to house the inmates.

Capital Investment Budgets

During the period of 2008/09 through to 2012/13 the Province of British Columbia initially expected to construct three separate correctional facility projects for an estimated total cost of $185 million (Ministry of Public Safety and Solicitor General, 2009). This was prior to the three bills introduced in the House this year which will likely require significant capital investment across the country to build additional correctional facilities to house the increased inmate population.

The federal government has budgeted $487.9 million for correctional facility infrastructure from fiscal 2011 through to fiscal 2013 (Curry, 2009). It is projected that during the same fiscal periods a capital budget of $817.1 million would be required to maintain existing infrastructure and build incremental bed capacity (Correctional Services Canada Review Panel, 2007).

Security Level - Capital Cost per Cell - Population Mix
Minimum - $200,000.00 -12%
Medium - $400,000.00 - 39%
Maximum - $500,000.00 - 49%

Capital cost per cell include common areas, health facilities, administration offices, etc.

The capital cost to construct a regional complex is attributed based on population mix and ranges from approximately $212 million to $842 million (Deloitte, 2007). Based on the lowest range of inmate population increases, a minimum of 3,600 additional cells would be required for a minimum capital cost of $1.53 billion.

British Columbia houses approximately 14.6% of the federally incarcerated inmates and could be expected to invest at least $256 million in capital correctional facility construction in the next three years to meet minimum inmate population increases.

Facility Operating Cost

Federal and provincial data suggest a consistency of 2.06 inmates per employee in correctional facilities (Correctional Service Canada, 2009; van Dongen, 2009). It is uncertain the cost of inmate incarceration as there is a disparity of operating costs across various jurisdictions. The news media suggests the highest cost of $101,000 a year per male and $185,000 a year per female (Jones & Pate, 2009) which is assumed to be a maximum security cost. Financial reports from Corrections Services Canada suggest a blended average cost per inmate of approximately $104,522 per year.

Ontario statistics suggest incarceration costs ranging from $110,223 for male inmates and $150,867 for female inmates in maximum security correctional facilities to a low of $70,000 for medium and minimum security correctional facilities (Basen, 2006).

Terrace Opportunity

The opportunity exists within rural Northern British Columbia to construct a new correctional facility. A new facility located in rural Northern British Columbia would be in alignment with the beneficial effects of remanding inmates near their home communities. The advent of technology is making it easier for inmates to receive sentencing, visitations, and specialized counselling services through video conferencing.

It is proposed that a facility housing approximately 400 inmates could be constructed within the community of Terrace in Northern British Columbia.


The community of Terrace has expressed interest in exploring the economic impact of constructing a potential correctional facility in the community to support the growing need of new facilities for inmates. It is normal practice for a municipality to research information on new initiatives when exploring economic opportunities.


The proposed location for construction of a new correctional facility location is in a planned light industrial near the Terrace Airport (Figure 1). The industrial area is East of Highway 16 and comprises approximately 114 hectares of land. The needs for the new correctional facility would likely be between 15 and 20 hectares.

The location is ideal for its proximity to the airport, and access to highway 37 for transportation purposes. It is also unlikely there would be any opposition to the location due to its distance from residential neighbourhoods.

Construction Economic Impact

It would be estimated that a 400 inmate population correctional facility would maintain the typical housing composition of minimum, medium, and maximum inmates. It would be expected that total capital construction cost would be approximately $170,000,000.00. The size of the facility would be approximately 280,000 square feet of floor space. The construction process would source raw materials, simple fabricated products, and skilled labour from the local community. It is uncertain how much those portions would comprise of the approximate construction costs however it would be reasonable to assume that at least 20% of total project costs.

According to the Correctional Service of Canada, the capital construction process from the planning stage to full occupation for a new facility would be approximately 15 years. This period is considered to be extremely long and disproportionate of the typical construction period of large capital projects. It would be expected that the time frame could be reduced by approximately 60% to five years.

Operations Economic Impact

Utilizing details from the Correctional Service of Canada a correctional facility in Terrace would require an annual operating budget of approximately $42 million. This operating budget encompasses all inmate costs and facility maintenance costs. Of that operating budget, approximately 68%, or $28.5 million, of the budget is for payroll and benefits costs which are primarily spent within the local community (Correctional Service Canada, 2008).

Of the remaining budget, it is uncertain how much of the operating and maintenance costs would be spent within the local community. It is reasonable to assume that a portion of the remaining budget would be spent within the community of Terrace.


The construction of a new 400 inmate correctional facility in Terrace would provide direct economic impacts over the next 20 years of approximately $862 million dollars assuming an annual inflation rate over that period of two (2%) percent. The support of the community for this type of facility would also ease the process and provide greater involvement with the inmate population and their families to improve the overall quality of life and outcomes.