Canada Studying Private Firms for Prisons as Budgets Fall

Canada is studying the use of private companies to deliver some prison services as it cuts spending and imposes tougher sentences on criminals, which may benefit companies like GEO Group Inc. (GEO)
Correctional Service Canada, which oversees federal prisons, “may consider” partnerships with private firms to provide “basic institutional services such as cleaning and food preparation,” says a memo prepared for Public Safety Minister Vic Toews in advance of a May 14 meeting with Crispin Blunt, U.K. Minister of State for Prisons in London.

Officials in the department urged Toews to discuss Canada’s “interest in considering the privatization of penitentiary services on a limited basis,” according to the memo obtained by Bloomberg News under Canada’s freedom-of-information law.

Public Safety officials were lobbied by the GEO Group as the government was preparing legislation to introduce or lengthen mandatory sentences for some types of crime. The annual budget of Correctional Service Canada, which reports to Toews, will fall to C$2.86 billion ($2.81 billion) by the year beginning April 2014 from C$3.03 billion in the current fiscal year, according to agency planning documents.

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