Canada's prison ombudsman Howard Sapers, shown in this September photo, released his annual report Monday. (Patrick Doyle/Canadian Press)

Canada's ombudsman for prisons has found an "immediate and troubling" shortfall in mental-health-care services for offenders and predicts the problem will get worse as the prison population grows.

In his annual report released Monday, Howard Sapers said there are gaps in capacity, quality and standards when it comes to helping mentally ill prisoners.

"Criminalizing and then warehousing the mentally ill burdens our justice system and does nothing to improve public safety," Sapers wrote in the highly critical report.

Ten to 12 per cent of offenders entering the federal prison system have a significant mental health problem.

He also found the gap between the number of aboriginal and non-aboriginal offenders is widening, with the aboriginal rate of imprisonment nine times the national average.

One in five offenders is of aboriginal ancestry and one-third of the female prison population is aboriginal.

Sapers said in an interview he expects the prison population to increase by about 10 per cent — or as many as 1,300 people — in coming years because of legislative changes to toughen sentencing and limit early release.

"We're going to see this manifested in some troubling ways," he said.

The prison service already has only about 50 per cent of the acute psychiatric beds it requires, he said.

"So any increase in the number of offenders incarcerated will lead to an increased demand in that area," Sapers said. "It will require new resources, and it will require a continued commitment from the service."

In a written response to his report, Corrections Canada outlined the steps being taken to address the issues but noted more money is needed.

Craig Jones, head of the John Howard Society of Canada, said federal prisons have become the dumping grounds for those who are mentally ill.

"Many of them should not be in prison because the system is not equipped for it, and it just worsens the environment for everyone," Jones told CBC News.

Observers said overcrowded prisons have also resulted in a shortage of jobs for inmates inside and a lack of rehabilitation programs.

This has led to tempers flaring, more violence and a growing number of lockdowns, such as the one in July at Warkworth Institution in Campbellford, Ont., about 70 kilometres southeast of Peterborough. One man died and 13 others were sent to hospital after more than 200 inmates rioted.

"When you start squeezing people, they're going to push back," said Rick Sauve of Lifeline, a group that works with prisoners who are serving life sentences. "It's the pressure cooker that keeps building and building and building. It gets one little leak and, poof, it goes off, and my fear is that may start happening."

With files from The Canadian Press