Latest Developments in the Canadian Economic Accounts
The 1986 to 2022 revisions of the National Tourism Indicators

1. Introduction

With the release of the fourth quarter 2022 estimates of the National Tourism Indicators (NTI) in March 2023, data were revised from the first quarter of 1986 to the third quarter of 2022. Estimates for all of 2022, including the fourth quarter, were revised again with the release of the NTI first quarter of 2023 estimates in June 2023. This article explains the impact of the new and revised Canadian System of Macroeconomic Accounts (CSMA) data introduced during this last revision of the NTI.

Between 2019 and 2022, tourism spending in nominal terms was revised down for all years except 2022. Estimates were revised down $0.2 billion in 2019 and 2020, down $0.1 billion in 2021, and up $0.3 billion in 2022.

The growth rate of tourism spending (in nominal terms) showed larger revisions in 2019 due to benchmarking to the 2019 Provincial and Territorial Tourism Satellite Account (PTTSA), from +3.0% to +4.3%, minimal revisions in 2020, from -49.8% to -49.9%, and in 2021, from +10.7% to +10.8%. Growth in 2022 was revised up from 60.7% to 61.1%. The growth rates in 2020, 2021 and 2022 displayed greater volatility than historical levels in previous years as a result of the COVID-19 pandemic.

On a quarterly basis, between the first quarter of 2019 and the fourth quarter of 2022, growth in tourism spending (in real terms) was revised up in eleven quarters, down in four quarters and virtually unchanged in one quarter (see Table 1.2).

2. Sources of revisions

The revisions to the NTI came from updated benchmarks from the 2019 PTTSA, new and revised indicators from the CSMA, and indirectly from the 2019 Supply and Use Tables (SUT). These revisions are described below.

2.1 Provincial and Territorial Tourism Satellite Account, 2019

The NTI are benchmarked to the Canada totals of the 2019 PTTSA, which was released in February 2023. Supply-side and gross domestic product (GDP) estimates of the PTTSA were derived from the 2019 supply and use tables (SUT) and survey data. Demand-side estimates were derived from the National Travel Survey (domestic demand) and the Visitor Travel Survey (exports). Demand-side estimates for the residents of the territories were derived from the 2019 SUT. Employment estimates were based on the Canadian Productivity Accounts.

2.2 Methodological changes

The method to derive 2019 PTTSA estimates of GDP for the rail transportation industry was updated. Source data were used in a manner to better reflect the economic concepts they were originally intended to represent. This produced alternative ratios used to extract the tourism content from total industry GDP of the rail industry. As a result of the change, the estimates of other operating surplus for the rail transportation industry were significantly lower than past iterations of the PTTSA.

2.3 Revisions to the Canadian System of Macroeconomic Accounts

The regular annual revisions to household final consumption expenditure, to GDP by industry and to the balance of payments for the reference period 2019 to 2021 in November 2022 led to quarterly updates to NTI estimates for this period. Revisions to the same accounts for 2022 in May 2023 also led to quarterly updates to the NTI.

As a result of these revisions, new benchmark information from other sources, notably the Survey of Household Spending, as well as transportation, food services and drinking places and accommodation industry surveys, were brought into the NTI indirectly. This affected the NTI quarterly movements and annual levels for all open years (2019 to 2022).

2.4 Supply and Use Tables, 2019

The 2019 SUT benchmarks released in November 2022 were used to benchmark indicators throughout the CSMA, leading to revisions to quarterly supply, demand, GDP and employment of the NTI from the first quarter of 2019 to the fourth quarter of 2022.

3. Impact of revisions on the National Tourism Indicators, 2019 to 2022

3.1 Revisions to components of tourism demand (nominal terms)

Annual revisions to the components of tourism demand (in nominal terms) varied. During the four-year period, food and beverage services, transportation and non-tourism goods and services were generally revised down, while accommodation and other tourism goods and services (e.g., recreation and entertainment, pre-trip expenses and travel services) were generally revised up (see Table 2).

The largest contributor to downward revisions in 2019, 2020 and 2021 was food and beverage services (-$1.1 billion, on average). Transportation was also revised down in each of those three years (-$0.3 billion). The largest contributor to the upward revision in 2022 was transportation (+$0.3 billion).

3.2 Revisions to components of tourism demand (growth rates in real terms)

Annual growth rates of tourism spending (in real terms) were revised up 1.3% in 2019 and 0.4% in 2021, with a minimal increase and decrease in 2020 and 2022 respectively (see Table 3).

Revisions to growth were generally larger in accommodation services, ranging from -2.2 percentage points in 2022 to +4.2 percentage points in 2019. Growth in food and beverage services showed upward revisions in 2019, 2020 and 2021, ranging from +1.0 percentage points to +1.4 percentage points, while growth in 2022 was revised down 0.1 percentage points.

Otherwise, revisions to growth were mixed and varied between -0.8 percentage points and +1.5 percentage points.

3.3 Revisions to employment generated by tourism demand

Tourism employment was revised up in all years excluding 2022, which was unchanged (see Table 4). The largest revision to tourism employment was in 2021, a rise from 498,900 to 510,500, with other tourism industries (e.g., recreation and entertainment, travel services) being the largest contributor to the upward change.

Excluding minimal changes in 2022, transportation services showed the largest upward revisions, with the largest increase in 2019 (+9,800 jobs). Other tourism industries and accommodation services were also revised up every year from 2019 to 2021.

Conversely, food and beverage services displayed downward revision in all years excluding 2022, the largest one occurring in 2019 (-10,600 jobs).

Employment in non-tourism industries showed downward revisions across all years with the largest occurring in 2019 and 2020 (-2,200 jobs each year).

Overall growth in 2022 was unchanged, with upward revisions to food and beverage services offset by downward revisions to other tourism industries and non-tourism industries.

3.4 Revisions to tourism gross domestic product (growth rates in real terms)

Tourism GDP annual growth rates were revised upwards in all years excluding 2022 (see Table 6). In 2022, growth in tourism GDP was revised downward 0.4 percentage points while the previous three years saw an average upward revision of 0.6 percentage points.

Transportation services showed a downward revision of 9.7 percentage points in 2021. This was mostly the result of a change in methodology for the calculation of GDP in rail transportation.

4. Impact of revisions on the National Tourism Indicators, 1986 to 2018

NTI estimates for 1986 to 2018 were revised to align with the new 2019 PTTSA benchmarks. All components of tourism demand, GDP and employment were revised. This realignment did not incorporate new source data. Its purpose was to minimize any potential breaks in the time series.

Annual tourism demand (in current dollars) was lowered in all years and the downward revisions ranged from $0.4 billion (in 1986) to $1.6 billion (in 2014). Tourism demand was revised down between 1.3% (in 1998) and 2.0% (in 1986) from the previously published estimates. Growth rates to annual tourism demand (in nominal terms) were all within 0.2 percentage points of the previously published growth rates.

Employment generated by tourism demand was generally revised up, with the largest revision occurring in 2018 (+0.8%). Growth rates to tourism employment were all within 0.2 percentage points of the previously published estimates, except for 2018, which was revised up 0.5 percentage points.

Growth rates to annual tourism GDP (in real terms) were all within 0.5 percentage points of the previously published estimates, and all but three were within 0.2 percentage points.

5. National Tourism Indicators revision policy

The NTI revision policy allows for regular incorporation of new and revised data, including regular benchmarking to the Provincial and Territorial Tourism Satellite Account (PTTSA). Revisions to the NTI are the result of new or revised data in the core economic accounts. The revision policy serves to improve the reliability and accuracy of the NTI time series estimates. It is consistent with the policy followed for the CSMA, which governs four types of revisions: current, annual, comprehensive, and updating to a new base year (currently 2012). Each of these are described below.

During the current reference year, estimates for any quarter are subject to revision at any subsequent quarter within the same year. For instance, a first-quarter estimate is revised on the release of the second-, third-, and fourth- quarter estimates for the same year. These are called current revisions and allow improvements to estimates through the incorporation of the most up-to-date information available (including revisions to source data as a result of late reporting).

At the time of first- and fourth-quarter releases of the NTI, all estimates for a given number of years preceding the current year are subject to revision. These annual revisions allow for the incorporation of the most up-to-date information from censuses, annual surveys, taxation statistics, public accounts, etc., which may become available well after the fact. The number of years open to revision mirror the CSMA revision for that year. Furthermore, when a new set of PTTSA benchmarks is incorporated into the NTI, the revision period is extended back to the reference year of the PTTSA. Thus, the window for revisions in the NTI varies according to the frequency of PTTSA updates and any revisions to standard macroeconomic indicators in that year.

Estimates are also subject to periodic comprehensive revisions mainly to introduce new concepts, implement refined methods, and incorporate newly available data sources. Comprehensive revisions typically result in changes to the entire time series.

Updating of estimates in real terms to a new reference year (currently 2012), as with the third quarter 2018 release of the NTI, is normally carried out every five years. Updating of constant price series is done to remove bias in measures of inflation-adjusted growth as relative prices in the economy evolve away from those of the base year. Updating of constant price series involves revisions to only price indices and constant price aggregates, leaving aggregates at current prices unaffected. Rebasing the NTI to reference year 2017 is planned for March 2024.