Stockwell Day is facing criticism after he suggested that Ottawa needs to spend billions of dollars on new prisons in order to lock up people who commit unreported crimes.

The president of the Treasury Board made the comments at a press conference on Tuesday, which centred on the Conservatives' plan to cut the federal deficit.

When asked by a reporter why the government intends to spend billions of dollars to expand the penitentiary system in the face of falling crime rates, Day replied: "People simply aren't reporting the same way they used to."

"I'm saying one statistic of many that concerns us is the amount of crimes that go unreported. Those numbers are alarming and it shows that we can't take a liberal view to crime."

The minister declined to cite specific evidence regarding the rise in unreported crime. Nor did he elaborate on the types of crime that are going unreported in larger numbers.

Later, a spokesperson for the minister of justice said that Day was speaking of Statistics Canada's General Social Survey. In 2009, it found that the proportion of crimes that are reported to police dropped slightly to 34 per cent, from 37 per cent in 2004.

Day also said that the government's "tough on crime agenda," which includes lengthier jail sentences, could produce "an up-tick in incarceration."

However, Statistics Canada last month that crime rates had declined by seven percent since 2007 and have been dropping continually for nearly two decades.

Criminal acts such as homicide and attempted murder, robbery and sexual assault are becoming less common, the report found.

In spite of such statistics, Day maintained that the Conservatives will plough ahead with proposed justice system reforms, including building new prisons, more mandatory sentences, longer jail times and abolishing "discount sentencing."

Liberal critic Mark Holland said the government was trying to find a reason to implement bad policy using fictional statistics. And he noted that reporting of sexual crimes has increased gradually, as stigma has eased.

On the other hand, if more criminal acts are indeed going unreported, Holland said it still wouldn't require more jail cells.

"You need prisons to lock up people who are not being charged?" he asked. "Unless you are suggesting throwing away habeas corpus and rounding up everybody who looks suspicious, it makes no sense."

New Democrat MP Don Davies said the Tories were embracing ideology and ignoring hard facts.

"Crime rates have been dropping steadily and consistently across categories for decades," he said. "So faced with those statistics, they turn to unreported crimes. Why in 2010 would you be less likely to report a crime than in 1980 or 1990?"

A StatsCan analyst said the most common reason people give for opting not to call police is because they believe an incident wasn't serious. Another two per cent of respondents said they feared revenge, and one per cent said they thought police could be biased.

With files from The Canadian Press