Canada's prison system is revamping its policies around transgender inmates amid growing calls to place offenders based on gender identity, not genitalia.

Scott Bardsley, spokesman for Public Safety Minister Ralph Goodale, confirmed that Correctional Service Canada will amend its guidelines for accommodation policy and gender reassignment surgery early in the new year.

He said all Canadians should be safe to be themselves, even if they're behind bars.

"Our government believes that everyone can live according to their gender identity and express their gender as they choose and be protected from discrimination," Bardsley told CBC News. "CSC is committed to ensuring that inmates who identify as trans have the same protection, dignity and treatment as other inmates."

Bardsley said CSC is also tracking progress of Bill C-16, which amends the Canadian Human Rights Act to include gender identity and gender expression to the list of prohibited grounds for discrimination. The government will ensure all policy changes comply with the law and take into account CSC's "unique operational context and the population under its responsibility," he said.

Canada's prison watchdog Howard Sapers said CSC's longstanding policy of housing offenders based on "genitalia rather than gender identity" means trans inmates are subjected to gender-sensitive procedures such as strip searches, pat-downs or urine analysis by members of the opposite sex.

Sometimes, they are double-bunked with prisoners, and many mask their identity out of fear of exploitation, harassment, intimidation and sexual violence. Often trans inmates are held in segregation, have limited mobility or are kept in more secure prisons due to safety concerns.

"All of those issues become much more complicated for transgender individuals, and really the concerns that we have and the issues that they've raised with us, have to do with feelings of vulnerability, safety, dignity, and just human decency," Sapers, the outgoing Correctional Investigator, told CBC News.

Issue of human rights

Sapers said CSC should ensure institutional policies reflect sensitivities to dress, language and pronoun use, and allow inmates to serve their sentences in institutions aligned with their gender identity.

"I think it's important on a case-by-case basis to evaluate the live circumstances of the individual and apply that to the law, then make a decision that's based on, really, their human rights," he said. "That's what's being done in other jurisdictions and I think that's what should be done here."

Last year, Ontario became the first jurisdiction in Canada to allow inmates to serve their sentences in institutions based on self-identified gender, and to be referred to by their chosen names and preferred pronouns. At the time the provincial government called it "the most progressive policy on the treatment of trans inmates in North America."

Sex reassignment surgery

British Columbia became the second province to change its policy, and now permits placement according to gender identity.

But at the federal level, offenders who are serving much longer sentences are still placed in institutions based on their gender assignment at birth. To qualify for sex reassignment surgery, the individual must have have lived in the preferred gender role for at least one year prior to incarceration.

CSC spokeswoman Lori Halpern said there are measures in place to ensure facilities "provide a correctional environment that is safe, secure and conducive to all offenders' rehabilitation." Policy changes will comply with law and take into account the unique operational context, she said.

Jennifer Metcalfe, a lawyer with the West Coast Prison Justice Society, has filed a human rights complaint against CSC to address what she calls systemic discrimination against federal trans inmates.

She has represented offenders who have endured sexual abuse by guards and other inmates. Many don't self-identify out of fear of harm or ridicule.

'Systemic' discrimination

Metcalfe said Canada must urgently update its prison policies to bring them in line with evolving practices in society at large.

"If you're a woman, you should be in a woman's prison. If you're not, then you're not being treated equally," she said.

Actress Laverne Cox has drawn attention to trans rights through her role in Orange Is The New Black. (Frederic J. BrownAFP/Getty)

High-profile actress Laverne Cox, of the hit Netflix series Orange is the New Black, has drawn attention to trans rights in her role as Sophia, a transgender inmate in a women's prison.

Metcalfe has recommended several policy changes, including:

Placement according to gender identity or housing preference, unless there are over-riding health or safety concerns.

Required training and education for staff.

Identifying inmates by their preferred name.

Permitting clothing and underclothing according to gender identity.

Allow trans inmates to choose a male or female guard to perform searches.

Allow inmates to initiate or continue hormone therapy.

Pay for sex reassignment surgery when recommended as an essential medical service by a health professional.

Earlier this year, Toronto Police Services and correctional officers were ordered to revamp their policies on transgender inmates after making a settlement with an individual who was stripped of men's clothing, forced into women's underwear and put into a holding cell for women.

Boyd Kodak filed a complaint with the Ontario Human Rights Commission for "degrading" treatment after he was arrested on Dec. 6, 2012, on harassment charges that were soon dropped by the Crown.