The Economic Impact of Firearm-related Crime in Canada, 2008

6. Third-Party Costs

While crime has its most significant impact on victims, others suffer as well. For example, 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); there might be other people injured or threatened during the incidents; governments provide various victim services to help victims, and develop prevention programs. All of these costs are reflected in the third-party costs. Table 10 summarizes the total third-party costs.

Table 10: Third-Party Costs for firearm-related crime, 2008
1. Funeral Service Expenses $1,563,660
2. Loss of Affection/Enjoyment to Family Members $47,640,000
3. Other People Harmed/Threatened $1,899,466
3.1 Health Care $557,000
3.2 Productivity Losses $1,342,466
4. Social Service Operating Costs $4,422,508
4.1 Transition Home/Shelter $347,373
4.2 Crisis Line $354,368
4.3 Victim Services $3,720,767
5. Other Related Expenditures $24,000,000
5.1 ICCUF $10,000,000
5.2 Firearm Action Plan $14,000,000
Total $79,525,634

6.1 Funeral and Burial Expenses

According to the Canadian Press, the average funeral in Canada costs about $7,500 in 2007.Footnote 30 This amounted to about $7,665 in the 2008 Canadian dollars. Therefore, the total costs of the funeral services for the 204 deceased victims were estimated at $1,563,660. See Appendix C.1 for detailed calculations and sources.

6.2 Loss of Affection/Enjoyment to Family Members

The emotional impact of losing a loved one can be enormous. Many people would argue that no amount of money would be adequate to compensate their families, especially in fatal crime cases. Grieving family members may suffer from feelings of fear, anguish and devastation, or may develop depression, anxiety and sleeping problems as a consequence. Although it is not possible to estimate the true value for such suffering, looking at the problem from the perspective of court award might be able to shed some light on this issue.

Relevant information has been found in several jurisdictions. Specifically, Alberta's Fatal Accidents Act requires the court to award damages for grief and the loss of care, guidance and companionship in the amount of $75,000 to the spouse or adult partner of the deceased person; $75,000 to the parents of the deceased person; and $45,000 to each minor or unmarried/un-partnered child of the deceased person.Footnote 31 As with Alberta, Saskatchewan's Fatal Accidents Act also allows for recovery of bereavement damages. The damages for loss of companionship or grief are capped at $60,000 for a spouse and $30,000 for each child of the deceased. Unlike Alberta and Saskatchewan, there is no recovery for grief in Ontario. However, there was a case that the court substituted its own award for the general non-pecuniary damages, and awarded $35,000 to the deceased' daughter, $20,000 to the son, and $75,000 to the deceased's wife.

Following this, we use the figures from Alberta as our estimation basis, and we consider the impact on those families of the 204 deceased victims only.Footnote 32 According to Statistics Canada, the majority of people lived in family households (69.6%), and the rest lived either alone (26.8%) or lived with one or more unrelated persons (3.7%).Footnote 33 In addition, the average number of children per family has also dropped to 1.1 in 2006.Footnote 34 By using this distribution, we assume that each victim had both parents to receive the compensation, and victims lived in family households that had one spouse/partner, and one child. Therefore, as the compensation for grief and companionship, parents of the 204 victims would receive $75,000, each of the 142 (204*69.6%) spouses/partners would receive $75,000 and each of the 142 children would receive $45,000.Footnote 35 Following this, it is estimated that the total value for the loss of affection/enjoyment was $47,640,000. See Appendix C.2 for detailed calculations and sources.

6.3 Costs to Other Persons Harmed During the Incidents

Health Care

The GSS reported that in addition to the primary victims, there were about 76,008 who were harmed or threatened during the incidents. It is assumed that these persons had the same probability as the victims of seeking medical attention from a physician or at a hospital. Therefore, 274 people received medical attention from a physician and 1,353 people received medical attention at a hospital (visiting emergency department). Due to lack of data, hospitalization is not considered for a conservative estimation. The total health care costs for other persons harmed during the incidents were about $557,000.

Productivity Losses

Out of the 76,008 persons who were harmed or threatened during the incidents, 50,851 were aged 15 and over. It is assumed that these persons would take two days off from their daily activities. People might be engaged in different activities. Some go to work, some go to school, some stay home taking care of family members and some go shopping or simply enjoy the leisure time. Therefore, there would be a production loss if they were employed or at least an opportunity cost. We use the value of household work ($13.2 per hour, see section Lost Household Services) as a conservative estimate. Following this, the total productivity losses to other persons were $1,342,466.

Therefore, the total costs to other persons who were harmed or threatened during the incidents were $1,899,466. See Appendix C.3 for detailed calculations and sources.

6.4 Social Service Operating Costs

Shelters/Transition Home

The most recent year for which information is available with regard to the operating expenditures for transition home/shelters is 2005/06. The Transition Home Survey reported that the annual operating costs for the 553 shelters across Canada totalled approximately $317 million in 2005/06. With a total of 10,381 beds, it is estimated that the average operating cost per bed was about $83.61 per day in that year. After inflation adjustment, the average cost increased to $89.07 in 2008.

As suggested by the GSS , 44 female victims reported that they had gone to shelters, and it is estimated that 48% of them were admitted to shelters with their children. For women who were admitted with their children, we assume that only one child was brought. According to telephone conversation with the Interval House of Ottawa, a child normally occupies a separate bed. Therefore, with an average stay length of 60 days, the total shelter operating costs for victims of firearm-related violence were $347,373 in 2008.

Crisis Line

About 12,656 victims contacted crisis lines for assistance in 2008. The average time duration per call was about 17 minutes. As all the phone calls made to crisis lines are anonymous, no official information is available with regard to the number of times that one person called in. However, according to crisis line workers, people do make follow-up calls and it is assumed that on average, each victim made 5 phone calls. We estimate that the average operating cost of crisis lines was about $20 per hour where salaries for employees were the main components. Even though many crisis line workers are volunteers, there is still an opportunity cost as they may use the time to do other paid services or take leisure time instead. In addition, there might be expenses for building use, purchase of equipment, utilities and training. In this way, the total crisis line operating costs for victims of firearm-related crime were $354,368.

Victim Services

According to the Victim Services Survey, it is estimated that the average operating cost of the 879 victim service providers in Canada serving victims of crime was at $456.20 per victim. The GSS data finds that 8,156 victims of firearm-related crime had contacted these service providers to seek assistance. Therefore, the services provided to victims of firearm-related crime totalled approximately $3,720,767 in 2008.

In addition, various support centres (e.g., Men's/Women's/Community/Family centres) provide support and assistance to victims of crime, which includes reporting crime, emotional support, court accompany, referral to other programs and services, counselling services and temporary accommodation. According to the GSS , 11,822 victims went to various support centres to seek assistance as a result of firearm-related crime. However, no information is available regarding the time of length for using the service and the operating cost of these centres. Therefore, the associated costs are not included in the present report.

In sum, the total operating costs of various social services that were related to victims of firearm-related crime were $4,422,508. See Appendix C.4 for detailed calculations and sources. Note that compensation awarded to victims is not included. This is because compensation programs normally cover counselling, damaged and stolen property, lost wages and pain and suffering, etc (although the coverage varies among jurisdictions), all of which have been captured and examined under other parts of this study.

6.5 Other Related Expenditures

In 2004, the Royal Canadian Mounted Police (RCMP) allocated $49.9 million over a five-year span for the Investments to Combat the Criminal Use of Firearms (ICCUF) initiative, which was aimed to enhance the capacity of law enforcement agencies to combat gun crime and firearm smuggling and trafficking. This initiative involves three federal organizations: Public Safety, the Canada Border Services Agency (CBSA) and the Royal Canadian Mounted Police (RCMP). The ICCUF funding allocation now has been extended indefinitely with the overall aim of improving the national collection, analysis and sharing of firearm-related intelligence.

In addition, as part of the strategy on tackling crime, the Government is committed to effective gun control and action against those who use firearms for criminal purposes. Effective gun control requires the licensing of all individuals who legally possess guns. The Government included a short-term action plan ($14 million) in the 2008 budget which included measures to facilitate compliance and the extension of the waiver on firearms renewal fees from February 2008 until May 2009.

Many other provincial programs and initiatives associated with firearm-related crimes are not included due to data limitations. Therefore, the total other expenditures spent by the Government on firearm-related crime initiatives in 2008 were about $24,000,000. See Appendix C.5 for detailed calculations and sources.

7. Discussion

The present study estimates the financial impact of firearm-related crime in Canada. Three major cost categories are examined: criminal justice system, victims and the third party. We estimate that the total economic and social costs of firearm-related crime in 2008 were approximately $3.1 billion, equivalent to a per capita cost of $93 in that year. However, this is likely to be a conservative estimate due to the unavailability of data in many areas as previously noted.

The costs pertaining to the Canadian criminal justice system is estimated at $302 million in 2008. A breakdown of the total criminal justice costs by sector reveals that policing services used the majority of justice expenditures on firearm-related crime (69.5%), followed by corrections (29.7%), courts (0.3%), prosecution (0.3%) and legal aid (0.2%).

Victims bear the most direct and significant impact of crime. Many costs would be incurred as a direct result of victimization of firearm-related crime, such as health care cost, productivity losses and value of stolen/damaged property. We estimate the total victim costs at $2.7 billion in 2008, including both tangible and intangible costs. The majority was intangible costs (91.9%) for pain, suffering and loss of human life. The remaining $221 million was incurred as tangible costs, of which productivity losses represented 69.8%, followed by personal costs (26.9%) and health care costs (3.2%).

The third party costs capture the impact of firearm-related crime on other people and society in general. In 2008, the total costs borne by the third-party were approximately $79.5 million. About 59.9% were intangible costs measuring the loss of affection/enjoyment to family members of victims who were killed in the crime. Tangible costs cover funeral services (2.0%), other persons who were harmed or threatened during the incidents (2.4%), social services (5.6%) and other related government expenditures (30.2%).

In this study, we have provided estimation for the costs of firearm-related crime in Canada. Due to data limitations, the scale and the impact of firearm-related violence might have been underestimated. For example, many costs such as lost legitimate incomes for offenders and psychological impact on family members were not included. In addition, note that while these costs provide an indication of the impact of firearm-related crime on people's lives and on the whole society, considerations from an economic perspective reveal only one dimension of this complex social problem.

As such, costing analysis is not a substitute for policy formulation, but a complementary addition that could provide more objective evidence.