The Economics of Policing

Adding social impacts

By Jeff Channell, Executive Director, York Regional Police

The phrase “Economics of Policing” has been widely used to describe the increasing costs of policing, with an intentional result of downward pressure applied on police budgets. It’s time to rethink the misuse of this term and focus on a proper evaluation while exploring the costs and benefits of policing.

Economics provides a framework for understanding the impact of crime and the wide-ranging impacts on individuals, communities and the economy. In 2014, the Fraser Institute estimated the social impact of crime in Canada to be $85 billion.iThe Institute included direct costs, such as medical expenses, property damage, policing and criminal justice costs, and indirect costs, such as lost productivity due to injury or death and those associated with fear of crime and reduced quality of life. These costs are significant, representing over five per cent of Canada’s national product.

The social impact of crime is estimated annually by federal governments in the U.S., U.K. and Australia. The social impact from victimization in 2019 was $1.66 trillion or over seven per cent of gross domestic product in the U.S., followed by £95 billion (3.8 per cent) in the United Kingdom and $47.5 billion (2.8 per cent) in Australia. The data showed violent crimes generally have higher costs than property crimes and that victimization varies by region and demographic group.

In 2013, Public Safety Canada hosted the National Summit on the Economics of Policing,ii which explored efficiencies within policing and justice systems as well as new models of community safety. Subsequent studies raised concerns over the sustainability of spending increases in policing and the criminal justice system. The outcome has been a challenge for policing ever since. National expenditures for policing in Canada have increased an average of 2.2 per cent per year from $13.5 billion in 2012 to $16.5 billion in 2021,iii compared to annual increases of 5.4 per cent in healthiv and 4.6 per cent in education.v The focus on cost containment has developed largely without analysis evaluating the social impact of crime or policing’s role in crime prevention and reducing victimization.
Since 2018, submissions of federal regulatory proposals have required an analysis of baseline social impact compared with a regulatory future state. Proposals require the calculation of evidence on net benefits prospectively or to estimate results if a policy were adopted. Proposals are also intended to evaluate consequences and trade-offs, foster transparency to the public and facilitate evidence-based decision making. The challenge to policing is how to bring these complex federal social impact models to local decision-makers.

Cost of Crime Calculator

The RAND Cost of Crime Calculatorvi is designed to help policymakers and
researchers understand the economic and social impacts of crime and to help identify the impact of strategies for preventing and reducing crime. It uses seven major crime types (or shadow prices) to calculate the social impact for U.S. jurisdictions. Back-testing using York Regional Police’s 2021 actual crime data, the RAND tool estimated the social impact of crime in the York region at $1.2
billion based on the seven crime types. This statistic, however, differs significantly from the social impact of $2.7 billion, calculated using the Fraser Institute estimates and prorated to York region’s population. Although it’s useful to show a range
of potential outcomes using different methods, an ideal tool would incorporate
regional crime rates as well as local social impact.

Public Safety Canadavii has reported on cross-national differences in estimating the social cost of offences. The research showed a considerable variance in social impact across nations. For example, the U.S. reported the highest social impact of
crime, more than twice that of the U.K. and four times that of crime in Australia. Public Safety Canada did not find a single Canadian study where per-incident costs of specific crimes were estimated, highlighting the need for additional research,
more comprehensive studies and multiple costing methodologies.

Use of Social Impact

Calculations of the social impact of crime have been used at the Combined
Forces Special Enforcement Unit – British Columbia, by Carleton’s Dr. Linda Duxbury in an evaluation of the Peel Regional Police’s school resource officers program and at Criminal Intelligence Service Ontario. These studies have consistently shown that
policing costs are a fraction of the total social impact of crime. Research from Canadian universities, including the Institute for Canadian Urban Research Studies at Simon Fraser University and the Centre for Public Safety and Criminal Justice Research at the University of the Fraser Valley, has been noteworthy but does not
consider the social impact of crime in Canada.

Calculating the social impact of crime has many potential benefits, primarily the ability to value which programs and options yield the largest reduction in crime and victimization. This future state will be able to estimate costs avoided by showing the
relative burden of different crimes, not just on workload, but on society as a whole. One thing is certain: historical cost-focused approaches will lead to familiar budget outcomes. The ability to value the social impact of crime is a path toward a proper
evaluation of investments in policing.

Jeff Channell is the Executive Director, Financial Services and Administration at York Regional Police and a past chair of the Budget, Finance and Asset
Management Committee. He can be reached at 5460@yrp.ca.

i The Fraser Institute. The Cost of Crime in
Canada: 2014 Report. P.1.
ii Public Safety Canada. Summit on the
Economics of Policing - Summit Report.
https://www.publicsafety.gc.ca/cnt/rsrcs/
pblctns/smmt-cnmcs-plcng-2013/index-en.
aspx
iii Statistics Canada. Police personnel and
expenditures in Canada 2013 and 2021.
iv Canadian Institute for Health Information.
National Health Expenditure Trends, 2021
— Snapshot
v The Public Accounts of Ontario 2011-12 and
2020-21.
vi Rand Corporation Cost of Crime Calculator.
https://www.rand.org/well-being/
justice-policy/centers/quality-policing/
cost-of-crime.html
vii Public Safety Canada. Costs of Crime and
Criminal Justice Responses. 2015-R022.0

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