Ashley Smith shown in an undated photo. (CBC)

The tragic case of Ashley Smith is a "perfect example" of policy failure across different levels of government and various ministries, says Public Safety Minister Peter Van Loan.

Smith, who committed a series of minor offences, spent from 2003 to 2006 in two New Brunswick correctional facilities before ending up in a federal women's prison near Kitchener, Ont. She died of asphyxia with a ligature around her neck in her cell in October 2007 at the age of 19.

Her case prompted a probe by New Brunswick's ombudsman and federal correctional investigator Howard Sapers. It also drew widespread criticism about how young people suffering from mental illness or severe behavioural disorders are dealt with by the prison system.

"People fall between the cracks and the sad and tragic case of Ashley Smith is one of those where she ended up, ultimately for having started with fairly minor issues, in a federal prison setting, which is really not a place where you're going to get the best mental health care," Van Loan told Evan Solomon, host of CBC's Power and Politics, Friday.

In the wake of Smith's death, the government has made "significant investments" in the prison system so they are better equipped to handle inmates with mental health issues, Van Loan said.

Specifically, these investments include: providing mental health assessments for each incoming inmate with a view to developing a treatment plan if necessary; hiring additional mental health workers, such as psychiatric nurses; and providing basic mental health training for all Corrections Canada employees, Van Loan said.

"What concerns me is the much higher proportion of people that should never be in prison … that should never be running into these problems with the law, [who] are facing that situation because they haven't received adequate health care and community care support."