Canada’s progress on crime is rolling back, and it may be a sign of eroding economic opportunity. Statistics Canada (Stat Can) data showed an increase in its Crime Severity Index for 2022. Both violent and non-violent crime is on the rise, with the odds of being a victim at 1 in 16. Especially of concern is violent crime, which has surged to a level of severity not seen in over a decade.
Canada Has Seen Violent Crime Severity Return To 2007 Levels
Canada’s back to seeing violent crime on the rise. The Violent Crime Severity Index (VCSI) climbed 4.6% to 97.7 in 2022. Over the past decade, the index has climbed 19.3%—increasing by a fifth. The index is now at the highest level since 2007, which is not the direction most would like to see it move.
Rising violent crime is a sign of economic erosion, with vacant homes contributing. A Department of Justice study found that violent crime was concentrated at inner and city centers, where “disadvantaged” households were located. The country may have a low unemployment rate, but the odds are slanted against young adults making enough for adequate shelter. That’s not getting better as home prices continue to climb.
NBER researchers have also observed that housing vacancies are correlated with violent crime. In this case, Canada’s investor-owned vacant homes might be contributing to the issue.
Aside from making regions less attractive, violent crime can drive property values lower. Real estate experts note that violent crime drives vacancies, causing rents to rise to make up for the initial vacancy increase. This drives cap rates higher, thus resulting in lower property values. Won’t someone think of the HELOCs? Kidding.
Canada’s Violent Crime Severity Is The Worst In Over A Decade
The Canadian Crime Severity Indexes for violent and non-violent crime.
Source: Statistics Canada; Better Dwelling.
Non-violent Crime Severity Showed A Mild Increase, But…
On the upside, Canada’s non-violent crimes remain historically low… kind of. The Non-Violent Crime Severity Index (NVCSI) rose 4% to 70.9 in 2022, but remains 2.9% lower than 10 years ago. As you can see, it’s much lower than it was heading into the pandemic. However, changes to how non-violent crimes are reported have also changed.
Shoplifting is a prominent example in how non-violent crime has seen a shift in reporting. Cities like Toronto no longer charge first-time shoplifters, which would reduce the count. Similar decisions were made in other regions, looking to mitigate the long-term impact of non-violent charges. Ignoring the ethics debate, this will artificially reduce the incident count.
Retailers are no longer engaging or reporting every observed incident. Instead, they’re opting to write off the loss, moving the loss to operating costs. As a result, regions like BC have seen a 300% increase in shoplifting, but “only” a 17% increase in charges in 2022. Still a massive increase, but just a fraction of the increase reported as losses and shrink.
It doesn’t just feel like it—there’s been an increase in crime across Canada. A sharp increase in violent crime severity has materialized, returning to levels not seen in over a decade. Non-violent crime made a small increase, but a reporting shift means it may not reflect reality. In any case, Canada is heading in the wrong direction when it comes to crime. This will have long-term economic and social consequences.