Statistics Canada
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Income and expenditure accounts
Frequently asked questions
- What is the Fisher formula?
- How can I access national series prior to 1961?
- What is the Statistics Canada national economic accounts revision policy?
- What is the difference between the GDP at factor cost and the GDP at basic prices?
- How do I access data on household debt as a percent of disposable income?
- What are statutory grants?
- Where do I find GDP data by industry?
- Are all government expenditures recorded as current government expenditures on goods and services in the Income and Expenditure Accounts?
- When the federal government transfers money to other levels of government to support public infrastructure, how is it accounted for in the Canadian System of National Accounts?
- How is the home renovation tax credit accounted for in the Canadian System of National Accounts?
Statistics Canada replaced the Laspeyres formula by the Fisher formula. The Laspeyres method of calculation calculated the real expenditure-based GDP estimate by using the price levels of a base year, and by changing only periodically that base year. As such, for any given year the Laspeyres formula was adding up the volume changes by using the price levels of the base year as weights.
This methodology produced very accurate results in periods where all prices were moving at almost the same pace. However, the use of the Laspeyres formula created inaccurate results in periods when prices did not move in a similar fashion. This is what happened, for example, in the 1990s, with the rapid technological expansion of the Information and Communication Technology (ICT) industries. The expansion of those industries has led to a decline in the prices of the equipment and services that they produce, and the Laspeyres volume measure over-estimated the real economic growth in that sector.
Given that the Chain Fisher Volume Index formula is chained quarterly instead of periodically, the Fisher index eliminates the problems reported above, and therefore produces the most accurate measure of quarter-to-quarter growth in GDP and its components. This is why Statistics Canada made out of the Fisher formula its official measure of the real expenditure-based GDP.
See Chain Fisher volume index.
How can I access national series prior to 1961?
While this information can be made available, users should be aware that the national series prior to 1961 were not subject to the Historical Revision of 1997 and to the recent changes that were adopted in the CSNEA. The 1997 Historical Revision involved methodological, conceptual, as well as statistical changes to various components of the GDP, while the other revisions that have been made since that time include 1) the adoption in May 2001 of the Fisher index formula, chained quarterly, as the official measure of real expenditure-based gross domestic product; 2) the change in valuation of the GDP from factor cost to basic prices; as well as 3) a change related to the capitalization of software.
See Historical revision of the National Economic and Financial Accounts: review.
What is the Statistics Canada national economic accounts revision policy?
See Revision policy: National economic and financial accounts.
What is the difference between the GDP at factor cost and the GDP at basic prices?
Whereas in the past, Statistics Canada published net domestic product at factor cost, this practice changed with the publication of the estimates of the first quarter of 2001 of the national economic and financial accounts. To bring the Canadian System of National Economic Accounts into line with international standards, the valuation of production is now done according to basic prices.
The concept of GDP at basic prices differs from the concept of GDP at factor costs in that the former includes net indirect taxes (indirect taxes less subsidies) attached to factors of production. For example, whereas property taxes, capital taxes and payroll taxes were not included in the valuation of GDP at factor costs, they are included in the valuation of GDP at basic prices. These production expenses are included in GDP at basic prices, subtracting from them any subsidies attached to factors of production, such as subsidies allocated for job creation and training.
The concept of GDP at basic prices also differs from GDP at market prices, but in this case the difference concerns the taxes and subsidies on the products themselves, such as sales taxes, fuel taxes, duties and taxes on imports, excise taxes on tobacco and alcohol products and subsidies paid on agricultural commodities, transportation services and energy. Whereas production at basic prices excludes taxes and subsidies on products, GDP at market prices includes taxes net of subsidies on products.
How do I access data on household debt as a percent of disposable income?
Keeping in mind the data on CANSIM are unadjusted for seasonal variations, household debt as a percentage of disposable income equals consumer credit and mortgages debt outstanding of the persons and unincorporated business sector.
This number can be found in two places. 1) Table 378-0006 National balance sheet credit market summary at quarter end, quarterly. For this, you would add CANSIM numbers v20682460 and v20682463 to obtain household debt. 2) Table 378-0007 National balance sheet accounts, by sectors, at quarter end, quarterly. For this you would add CANSIM numbers v20682604 and v20682609 to obtain household debt.
Personal disposable income can be found in Table 380-0004 Sector Accounts, persons and unincorporated businesses CANSIM number v498186.
Historical information can be obtained by through CANSIM, our diskette product or by consulting old publications.
Statutory grants are compensation the Government of Canada pays to provinces for taxing powers they gave up on joining confederation, mainly customs duties.
Where do I find GDP data by industry?
Are all government expenditures recorded as current government expenditures on goods and services in the Income and Expenditure Accounts?
Current government expenditures on goods and services represent only a share of the total spending of governments. A large amount of government spending is reflected in transfer payments from the government to households, businesses, and other levels of government. These transfers are recorded in the Income and Expenditure Accounts which track the income, outlays, saving, non-financial and financial investment, borrowing and net lending for each sector.
Another large proportion is reflected in government fixed capital formation (public investment) for the federal, provincial and local government sub-sectors. These expenditures form a component of the expenditure based measure of gross domestic product (GDP).
Interest on the public debt is another significant portion of government spending, and is recorded as an outlay in the government sector account
Related links:
What is GDP and how is it calculated?
How is the home renovation tax credit accounted for in the CSNA?
Related data tables:
Income and expenditure sub-sector accounts, federal government
When the federal government transfers money to other levels of government to support public infrastructure, how is it accounted for in the Canadian System of National Accounts?
These expenditures will first appear either as transfers from government (e.g. from the federal government to the provincial government), or as capital expenditures (gross fixed capital formation) by government, depending on the funding arrangement.
If the funding arrangement stipulates that the capital expenditure (bridges, roads, harbours, airports, and buildings) must be made by the provincial or local government before receiving federal support, it will first appear as an increase in provincial or local government gross fixed capital formation. This will then be followed by a transfer from the federal government to provincial or local governments once the work has been completed.
If the funding arrangement stipulates a transfer prior to the actual capital expenditure then it will be recorded as a transfer of funds from the federal government to provincial or local government and then as provincial or local government gross fixed capital formation once the work is completed. The funding arrangements could also be a mix of these extreme cases with partial funding transferred at the beginning with the remainder after completion.
Capital expenditures are a component of the expenditure based measure of gross domestic product (GDP). Transfers from government to other sectors (businesses, sub-sectors of government such as provincial or local governments) affect government income, government outlays and government saving for the various levels of government, but do not directly contribute to GDP.
This investment also affects various industries. Government capital expenditure on non-residential structures typically affects construction industries such as non-residential building construction and transportation engineering construction. In addition, there is usually an effect on those industries that supply construction materials such as manufacturing, transportation, and mining as well as service industries such as professional, scientific and technical services industries.
Related links:
What is GDP and how is it calculated?
Related data tables:
Income and expenditure sub-sector accounts, federal government
Income and expenditure sub-sector accounts, provincial governments, education, health and social services
Income and expenditure sub-sector accounts, local governments
Gross domestic product (GDP), expenditure-based
Gross domestic product (GDP) at basic prices, by North American Industry Classification System (NAICS)
How is the home renovation tax credit accounted for in the Canadian System of National Accounts?
The home renovation tax credit is an initiative to encourage home renovation expenditures. Home renovation expenditures appear either as personal expenditures on consumer goods and services (if the renovation does not add value to the dwelling or is not an asset depreciable over more than one year) or as business gross fixed capital formation in residential structures (if the renovation adds value to the dwelling and is depreciable over more than one year).
Personal expenditures on consumer goods and services are recorded at the time the goods or services are purchased. Business gross fixed capital formation is recorded at the time the work is accomplished, even if materials used in the renovation were purchased in a previous accounting period.
When individuals claim the home renovation tax credit on their personal income tax forms, the home renovation tax credit will be treated as a transfer from the federal government to persons.
Personal expenditures on consumer goods and services and business gross fixed capital formation in residential structures are both components of the expenditure based measure of GDP.
Related data tables:
Gross domestic product (GDP), expenditure-based
Personal expenditure on goods and services
Investment in residential structures
Income and expenditure sub-sector accounts, federal government
Sector accounts, persons and unincorporated businesses
