Current and Capital Accounts

The current and capital accounts record the production of income, generation of income, distribution of income and use of income for the six major institutional sectors within the Canadian System of National Economic Accounts.

The current and capital accounts are a sequence of accounts where the closing entry of one account is the opening entry in the subsequent account.

The production account records output, intermediate consumption and gross value added. Gross value added is the closing entry in the production account. Statistics Canada does not currently compile a production account by institutional sector.

The generation of income account shows the flow of income to the factors of production, labour and capital. The opening entry in the account is gross value added. The account then records the amount of income attributable to labour and appropriated by governments through their participation in the production process. The closing balance of the generation of income account is gross operating surplus and gross mixed income. Statistics Canada does not currently produce a generation of income account by sector.

The income and expenditure accounts record the allocation of income to the institutional sectors, along with the use of that income. The closing entry in the income and expenditure accounts is saving.

The capital account records the sources of funds available for investment as well as investment and capital transfers. The opening entry in the account is the saving, which flows from the income and expenditure accounts. The closing entry is net lending or net borrowing. A net lending position means that the sector's source of funds for investment is greater than their investment needs and they can therefore lend to other sectors (including non-residents). A net borrowing position means the sector's source of funds for investment is less than their requirements and they need to borrow from other sectors (including non-residents).

The current and capital accounts are grouped into the following categories of accounts: