The provincial government plans to spend $400,000 next year to help reduce overcrowding at the Provincial Correctional Centre.
Justice Minister Janice Sherry said the province has already added eight spaces at the youth centre in Summerside to deal with overflow from the Provincial Correctional Centre.
"We've been at capacity but we've not sent anyone to the overflow units yet," she said.
The province has been working on the issue of overcrowding for more than a year, including adding beds at the youth centre in Summerside.
Changes were needed after a spike in the number of inmates housed at the correctional centre after federal changes to legislation related to sentencing.
In its latest capital budget, the government included $400,000 for correctional centre improvements in 2013-2014, up from $150,000 this year.
That investment will mean an additional eight beds at the youth centre.
The need for overflow space came after P.E.I. saw its new wing that was meant to house people serving intermittent sentences used to house other inmates because there wasn't enough room for them elsewhere in the jail.
Those inmates include women who were moved to the new wing because of space constraints.
Although the number of people in the jail varies, it houses about 135 inmates on weekends when people serve intermittent sentences.
The province had considered housing women in an empty section of the youth centre, but that hasn't happened and Sherry said the department has been looking at the situation involving female inmates.
"Right now they are still at Sleepy Hollow," she said.
Sherry said the number of female inmates has been fairly consistent with about 13-16 of them housed at the correctional centre at any given time.
Along with the money budgeted for improvements next year, Sherry said the province is still looking at developing therapeutic courts.
Therapeutic courts focus on treating underlying problems such as addictions or mental health issues instead of focusing on punishment.
Sherry said investing money in programs and people would be a better use than spending it on infrastructure.
"From my own perspective I believe that programs to help people is a far better way to go," she said.
But it could be a while before P.E.I. gets therapeutic courts, if it gets them at all.
Sherry said the province has asked the federal government to consider giving P.E.I. support in moving forward with a therapeutic court.
"I will say the response was lukewarm," she said.