Commissioner's directive 737: Inmate-operated businesses

Responsibilities

1. The Institutional Head:
   1. will implement procedures for the approval, supervision, and termination of an inmate-operated business
   2. will ensure that all information is documented for an inmate-operated business, including the business plan, the approval for the business, the materials used in its operation, and the insurance policy (where applicable)
   3. will ensure that the inmate’s Correctional Plan has priority and that consideration is given to the inmate’s previous work records and their ability to manage a business
   4. will ensure that an inmate-operated business does not:
      1. pose a threat to the safety and security of the institution
      2. adversely impact the operations of the institution
      3. compromise any programs or activities that are already in place at the institution
   5. will determine if business insurance is required
   6. will take into consideration the advice provided by the Assistant Warden, Operations, the Assistant Warden, Interventions, and the Assistant Warden, Management Services, when considering the approval of an inmate-operated business. For Indigenous inmates, full consideration of their Indigenous social history will be taken into account pursuant to section 79.1 of the CCRA
   7. may grant approval to an inmate to operate a business when:
      1. the impact on the safety and security of the institution, staff and inmates is at an acceptable level to manage the risk
      2. the business is consistent with the inmate’s Correctional Plan
   8. may suspend or withdraw the approval to operate a business
   9. will provide an inmate with 30 working days to close their business.
2. The Assistant Warden, Operations, in consultation with the Parole Officer, the Security Intelligence Officer, and the Correctional Manager, will advise the Institutional Head on impacts, potential or otherwise, of inmate-operated businesses related to:
   1. the security level of the institution
   2. the level of supervision and staffing levels
   3. the materials being used for the business
   4. inmate compliance with CD 566-12 – Personal Property of Offenders
   5. the potential risk of contraband being introduced
   6. the risks of influence and/or illegal partnership between inmates
   7. the inmate’s previous criminal activities
   8. any other elements that could be a security concern or have an impact on the operations of the institution.
3. The Assistant Warden, Interventions, will advise the Institutional Head of any conflicts between an inmate-operated business and the inmate’s Correctional Plan and their participation in programs or activities.
4. The Assistant Warden, Management Services, will advise the Institutional Head of any impacts that an inmate-operated business may have on the services provided within the institution.
5. In assessing the appropriateness of operating a business, the Manager, Assessment and Interventions, in consultation with the Parole Officer, will ensure that the inmate’s Correctional Plan has priority, and that consideration is given to the inmate’s previous work records and their ability to manage a business. Additional consideration will be given to the Indigenous social history of an Indigenous inmate when their request is submitted. For inmate-operated businesses related to Indigenous cultural items, an Elder/Spiritual Advisor or Elder Helper will be consulted. The Manager, Assessment and Interventions, will then advise the Assistant Warden, Interventions, accordingly.
6. The Manager, Programs, will ensure that an inmate-operated business does not compromise programs or activities that are already in place at the institution, and will advise the Assistant Warden, Interventions, of any such conflicts.
7. Upon approval and prior to the start of an inmate-operated business within an institution, the inmate will sign the CSC Waiver for Inmate-Operated Businesses in Annex B.

Procedures

8. The procedures apply to the operation of a business by an inmate within the institution in which they reside.
9. An inmate who has been operating a business and is being transferred to a different institution must close their business at least 10 working days prior to their transfer. Should an inmate want to continue operating their business, they must submit a new application for its approval at the receiving institution.
10. Inmates who own a business in the community, for which continuous operation is desired, must assign an individual or company to operate it on their behalf while serving their sentence in a CSC institution.

Approval

11. An inmate seeking permission to operate a business must obtain approval in accordance with the procedures set forth in this policy.
12. The Institutional Head, as part of the business approval process, will take into consideration:
    1. the legitimacy of the funds demonstrated by the inmate that will be used to start or operate the business
    2. the institution’s security level
    3. the safety and security of the public, the staff, the inmates and the institution
    4. the inmate’s Correctional Plan and participation in programs and activities
    5. the level of supervision required and the impacts on staffing levels, including the inability of the Service to increase its staff workload caused by the operation of certain types of inmate businesses
    6. institutional operations
    7. the potential for the business to compromise any programs or activities that are already in place at the institution
    8. the impact the business will have on the provision of services within the institution
    9. the necessity for the Service to make the maximum use of the institutional facilities regarding its needs and those of the inmate population
    10. the operations of the business and the product(s) it produces, including safety implications, shipping and receiving of products, space for fabrication, storage of materials and finished goods, client and work-related communications, etc.    
    11. the materials used as part of business operations
    12. the requirement for an insurance policy for the operation of the business
    13. the risk of contraband being introduced
    14. the risk of influence that could be exerted on the business by other inmates and/or members of the community
    15. the inmate’s previous criminal activities
    16. any other elements that the Institutional Head determines to have a potential impact on the operations and/or safety and security of the institution.
13. The Institutional Head will ensure that an inmate wishing to start a business submits a detailed business plan that includes each of the elements identified in Annex C.
14. The Institutional Head may consult with one or more members of the community prior to making a decision regarding the approval of an inmate’s request to operate a business. For inmate-operated businesses at healing lodges, the appropriate Indigenous authority (as defined in section 81 of the CCRA) will also be consulted.

Operation of the Business

15. Due to potential security risks to the institution and potential conflicts of interest, no inmate will be authorized to hire another inmate to work in, or be a part of, their business.
16. All inmate-operated businesses will comply with the applicable federal, provincial and municipal legislation, including Income Tax, Goods and Services Tax, Harmonized Sales Tax, Provincial Sales Tax, Employment Insurance, Canada Pension Plan, Occupational Health and Safety, and Fire Safety Regulations.
17. An inmate will be required to obtain business insurance, at their own expense, where it has been deemed necessary by the Institutional Head.
18. All supplies required for the operation of the business will be purchased by the inmate, in accordance with CD 860 – Offender’s Money.
19. The Institutional Head may assign a staff member to act as a liaison between the inmate-operated business and the institutional administration. In such circumstances, the liaison will ensure that the business complies with the requirements of this policy.
20. The Correctional Intervention Board and/or the Manager, Programs, will assess the performance of the inmate and their business against the stated business objectives.
21. The inmate will update and submit a business plan, including the audited financial statements of the business, to the Institutional Head on an annual basis. A member of a recognized society of accountants will prepare the financial statements, at the inmate’s expense.
22. An inmate working full-time in an inmate-operated business will not be eligible to receive inmate pay.
23. An inmate working part-time in an inmate-operated business is eligible to receive pay for the proportion of time spent participating in program assignments pursuant to CD 730 – Offender Program Assignments and Inmate Payments.
24. Following deductions (outlined in CD 860 – Offender’s Money), 90% of the balance of the inmate’s income, which includes profits generated from an inmate-operated business, pay earned from program and work assignments and other income sources, will be deposited into the inmate’s current account.
25. The remaining 10%, plus any amount above the allowable maximum in the inmate’s current account per pay period, will be deposited into the inmate’s savings account in accordance with CD 860 – Offender’s Money.
26. The Institutional Head may:
    1. require that the inmate submit an operating statement signed by the Treasurer every three months
    2. authorize the dollar value of materials used in the operation of the business in excess of the personal property limit, in accordance with CD 566-12 – Personal Property of Offenders.

Equipment and Tools

27. The inmate will be responsible for obtaining (including purchasing) any equipment, supplies and/or tools necessary for the operation of their business.
28. Equipment and tools used for the operation of the business and the goods produced will be accounted for as separate property from the personal property of the inmate and will not be counted as part of the total dollar value of the inmate’s property as per CD 566-12 – Personal Property of Offenders. There will not be any duplication of material between the inmate’s personal effects and the materials/supplies used for the business held within the institution.
29. A record of business-related property will be maintained separately from the record of the inmate’s personal property.
30. The inmate-operated business will meet all other applicable requirements included in CD 566-12 – Personal Property of Offenders.

Restrictions

31. The Service will not provide any financial, human, or material assistance for the start or the operation of any inmate-operated business.
32. Staff members will not be involved nor have any financial interest, directly or indirectly, in any inmate-operated business, in accordance with CD 060 – Code of Discipline.
33. The designated liaison officer will not be involved in the operations of inmate businesses.

Termination

34. The Institutional Head may suspend or withdraw the approval granted to an inmate to operate a business within the institution when:
    1. the conditions set out in this policy are no longer met
    2. the inmate is being investigated, charged with, or convicted of an offence associated with the operation of the business
    3. the inmate is no longer able to operate the business
    4. the inmate or their business presents a threat to the safety and security of the institution or any person.
35. When the Institutional Head suspends or withdraws the approval granted to an inmate to operate a business, the inmate will be given:
    1. a written notice of the reason(s) for the suspension or withdrawal of approval within 10 working days of the suspension
    2. an opportunity to make representation with respect to the suspension or withdrawal of the approval
    3. a reasonable opportunity to end the business.
36. Where an inmate wishes to close a business that is being operated in the community or to have it operated on their behalf, the Service will ensure that the inmate is given a reasonable opportunity to make necessary arrangements.
37. Where an inmate wishes to close a business operated in the institution, or is required to do so as a result of the suspension or withdrawal of its approval, the Institutional Head will ensure that the inmate is provided with 30 working days to close their business.
38. The inmate will be responsible for the costs associated with the closing of the business.

Enquiries

39. Strategic Policy Division
    National Headquarters
    Email: Gen-NHQPolicy-Politi@csc-scc.gc.ca

Commissioner,

Anne Kelly

Annex A: Cross-references and Definition

Cross-references

• CD 001 – Mission, Values and Ethics Framework of the Correctional Service of Canada
• CD 566-12 – Personal Property of Offenders
• CD 573 – Control of Items Critical to the Security and Safety of Institutions
• CD 580 – Discipline of Inmates
• CD 702 – Indigenous Offenders
• CD 710-1 – Progress Against the Correctional Plan
• CD 730 – Offender Program Assignments and Inmate Payments
• CD 735 – Employment and Employability Program
• CD 760 – Social Programs and Leisure Activities
• CD 767 – Ethnocultural Offenders: Services and Interventions
• CD 860 – Offender’s Money

• Indigenous Social History Tool

Definition

Income: revenue received from the following sources:

1. a CSC payment (including overtime)
2. pay earned while the offender is on work release or conditional release in the community
3. pay received from a third party for work performed in an institution
4. a CSC-approved inmate-operated business enterprise (calculation will be done from the net profit)
5. the sale of hobby craft or custom work (calculation will be done from the net profit of the sale)
6. an ongoing income paid by either a private or government source.

Inmate-operated business: a business operated by an inmate in the institution where the inmate resides that produces items for sale in the community, and for which an income and/or revenue is generated.

Annex B

THE CORRECTIONAL SERVICE OF CANADA – WAIVER FOR INMATE-OPERATED BUSINESSES

I, ____________________________, having been granted permission to embark on an Inmate-operated business enterprise named ____________________________ at ____________________________ do hereby signify that I will abide by section 112 of the Corrections and Conditional Release Regulations and CD 737 - Inmate-Operated Businesses,..

I have read and agree that I, on behalf of my activity:

will conform to all federal, provincial and municipal laws, statutes, by-laws, rules and regulations as they pertain to the operation of a business. I will pay sums of money such as taxes, compensations, and other monies as are required by municipal, city, provincial and federal laws and statutes, and deductions in accordance with CD 860 – Offender’s Money.

Further, I____________________________, of ____________________________, ,in consideration of His Majesty granting to me permission to operate the activity identified above, do hereby release and forever discharge His Majesty the King in right of Canada, and his officers, servants and agents of and from all claims, demands, damages, actions or causes of actions arising or to arise by reason of the operation by me of the activity identified above and of and from all claims or demands whatsoever in law or in equity which I, my heirs, executors, administrators or assigns can, will or may have by reason aforesaid against His Majesty the King in right of Canada. Further, I agree to reimburse His Majesty the King in right of Canada and his officers, servants and agents from and against all claims, demands, losses, costs, debts, damages, actions, suits or other proceedings by whomever, made, sustained, brought or prosecuted in any manner based upon, occasioned by, arising out of or attributable to in any way, the operation of the activity identified above. I understand that the Correctional Service of Canada can withdraw funds from my institutional account to cover the costs of deterioration and/or damage to the Correctional Service of Canada materials or facilities resulting from the operation of the business.

Further, I agree that the decision as to whether the activity specified above continues or ceases will be at the discretion of the Institutional Head or designated staff member of ____________________________.
I also understand that I cannot hold the Correctional Service of Canada responsible for loss or damage resulting from a decision, within reasonable grounds, by the Institutional Head or designated staff member to interrupt or terminate the business.

I have read and understand all of the foregoing.

____________________________

Signature

____________________________

Witness

____________________________

Witness

Annex C

ELEMENTS TO BE INCLUDED IN THE BUSINESS PLAN

To be considered, the detailed business plan submitted by the inmate will include at least the following:

1. for Indigenous inmates, the relevance of the plan to their Indigenous social history and/or culture
2. type of business, product description, business location, and type of incorporation or registration foreseen
3. plan and schedule, completed inventory control, production standards and expectations, requirements for production, and tools and equipment required
4. marketing and sales plan
5. expected short-term and long-term profits
6. identification of human resources from the community involved in the operation of the business (e.g., the Treasurer)
7. sources of funding, financial management, and accounting
8. relevance to the Correctional Plan
9. procedures for
   1. client and business communication
   2. equipment, tools, and materials/finished goods inventory management in the institution
   3. shipping and receiving of raw materials and finished goods, including expected volume and space requirements
10. reporting procedures, supervision and liaison (if required)
11. method of disposition of inventory/tools and/or termination of activity
12. any type of insurance required to operate the business (e.g., business liability insurance, worker’s compensation, employee life insurance, pension, environmental control).