Building Permits
Data quality
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Description – Monthly survey of building permits
The following information should be used to ensure a clear understanding of the basic concepts that define the data provided in this product, of the underlying methodology of the survey, and of key aspects of the data quality. This information will provide you with a better understanding of the strengths and limitations of the data, and of how they can be effectively used and analysed. The information may be of particular importance to you when making comparisons with data from other surveys or sources of information, and in drawing conclusions regarding change over time.
Data source and methodology
The purpose of the Monthly Survey of Building Permits issued by Canadian municipalities is to collect data on construction intentions. The results of this survey are used by the Canada Mortgage and Housing Corporation (CMHC) as a reference base for conducting a monthly survey of housing starts and completions in accordance with its mandate. The statistics on building permits are also essential for the computation of capital expenditures. Furthermore, since the issuance of a building permit is one of the first steps in the construction process, these statistics are widely used as a leading indicator of building activity.
General methodology: The Building Permits Survey covers all Canadian municipalities that issue permits. The number of Canadian municipalities currently surveyed approximately 2,350, representing all the provinces and territories. They account for 95% of the Canadian population. Participation in the survey is mandatory; the survey does not use a predetermined sample of municipalities. The communities representing the other 5% of the population are very small, and their level of building activity have little impact on the total. In practice, all urban agglomerations are represented in the survey, as well as a fair percentage of rural municipalities. With certain exceptions, the minimum coverage corresponds to the municipalities already included in the CMHC Housing Starts and Completions Survey. Non-responding municipalities that issue permits are urged on a regular basis to respond to the Building Permit Survey. Therefore, the number of municipalities covered is increasing continually.
The survey is usually conducted by mail, although certain municipalities choose to respond by telephone. The municipal officer responsible for issuing permits is asked to fill out a form each month describing all major construction projects.
The municipalities forward a copy of their completed report to Statistics Canada's Head Office and another copy to the local office of the CMHC. To reduce their overhead, an increasing number of respondents are producing a computerized report. Only those municipalities that are late in reporting and that are included in the above-mentioned CMHC. survey are subject to follow-up by telephone.
The reports received at Statistics Canada's Head Office are verified, coded and processed.
Strict quality control procedures are applied to ensure that collection, coding and data processing are as accurate as possible. Checks are also performed on totals and the magnitude of data. Reports that fail to meet the quality standards are subject to verification and are corrected as required.
Imputations are required for each characteristic for which no report has been received. These are calculated automatically, subject to certain constraints, by applying to previously used values, the month-to-month and year-to-year changes in similar values of responding municipalities and the historical pattern of the missing municipalities. No estimation is done for lack of coverage, concealment or the underevaluation of permits issued. For this reason, the sampling error cannot be computed.
The monthly statistics are not corrected for cancelled or expired permits. According to the municipal officers, the proportion of cancelled and unused permits is below 5%.
Reference period: The reference period for data collection purposes is the calendar month. Reports from municipalities which are part of a census metropolitan area or a census agglomeration must be received within 20 days following the month of reference. The other municipalities have 30 days to produce their reports. Results are released between 35 and 40 days after the end of the reference month. Annual data for the preceding calendar year are released with the data for the January survey month.
Revisions: Two types of revisions can affect the results of the Building Permits Survey:
Revisions due to the correction of coding errors
These types of revisions are done on a monthly basis only to the data pertaining to the month preceding the reference period.
Revisions due to the addition of late reports
Late reports for the month preceding the reference period are incorporated into the survey results on a continuing basis. However, reports received after the two-month deadline following the reference month are introduced only at the end of the year. As a result, the data for the last twelve months are subject to revision.
Seasonal adjustment: Components of the building permits for which seasonal variation is present are seasonally adjusted using the X-12 ARIMA method. Seasonally adjusted data for the total number of housing units and the aggregate value of building permits are obtained indirectly, i.e., by adding up their seasonally adjusted components. Specifically, the total number of dwelling units is obtained by summing the seasonally adjusted data for single-family and multi-family units. The total value of building permits is obtained by summing the following components: residential, industrial, commercial and institutional. In cases where the component series contains no apparent seasonality, unadjusted values are used in the place of seasonally adjusted values in these aggregations.
At the end of the year, the seasonally adjusted time series are revised to take into account the most recent seasonal fluctuations at the same time as a revision to the previous year of the unadjusted data. In general, revisions for the seasonally adjusted estimates extending back three years are made with the release of January building permits data.
For more information on seasonal adjustment, see Seasonally adjusted data – Frequently asked questions.
As a complement to the seasonally adjusted series, trend-cycle estimates are produced to indicate the long-term underlying movement of a series and may also be used as early indicators of the direction of the short-term trend (within the current year). Both the seasonally adjusted and trend-cycle estimates are subject to revision as new data points are added to the series. These revisions could be large and even lead to a reversal of movement, especially at the end of the trend series. The higher variability associated with the trend-cycle estimates is indicated with a dotted line for the most recent four months on the graphs.
Starting with the release of January 2016 data, the Monthly survey of building permits trend-cycle is estimated using a standard method employed by several monthly economic indicators at Statistics Canada. For more information on this method, see the StatCan Blog and Trend-cycle estimates – Frequently asked questions.
Concepts and variables measured
The statistical data presented in this product refers to the number of dwelling units authorized and the value of building permits. The value of the permits reported includes the following expenditures: materials, labour, profit and overhead. The cost of land is never included in the estimated value of the permit while acquisition costs (legal fees, surveying fees and accrued interest) may be included at times.
The classification used in this publication deals strictly with structures for which a building permit was issued. Permits are generally issued for the following: construction of new buildings, alterations, additions, renovations, etc. Minor repair jobs such as painting, tiling, roofing, etc., for which no permit is required, and engineering work (such as dams, roads, pipelines, etc.), which, by definition, is not a building, are not included in the building permit series. Estimates of such work may be obtained on Cansim, tables 029-0045 and 029-0050 from the Annual Capital and Repair Expenditures Survey: Actual, Preliminary Actual and Intentions (CAPEX) SDDS=2803.
The description given by the municipalities as to the type of building (box #6 of Section A on the form) and the type of work involved (box #7 of Section A on the form) forms the basis for classification. The classification of buildings into major groups and subgroups is based on the following: intended use in the case of new buildings; present or intended use of buildings to which improvements are to be made; present use of the existing structure where the proposed construction is intended to provide additional facilities; principal use of the structure where the proposed construction has more than one intended use; however, where the building contains dwellings, the value of the construction is divided between residential and non-residential use.
Building categories
This publication, uses the following classification for the value of permits issued for construction of new buildings or for improvements: residential, industrial, commercial, institutional and government.
Residential: Includes all buildings intended for private occupancy whether on a permanent basis or not. Dwellings are divided into the following types: single-family, mobile, cottage, semi-detached, row house and apartment building.
Industrial: Includes all buildings used for manufacturing and processing; transportation, communication and other utilities, and agriculture, forestry and mining.
Commercial: Includes all buildings used to house activities related to the tertiary sector, such as stores, warehouses, garages, office buildings, theatres, hotels, funeral parlours and beauty salons.
Institutional and Government: Includes expenditures made by the community, public and government for buildings and structures like schools, universities, hospitals, clinics, churches, homes for the aged.
The number of dwelling units indicates the number of self contained dwelling units created. This should not be confused with the number of structures. For example, an apartment building containing six dwellings will be shown as six dwelling units. When an existing structure is converted into additional housing units, the number of units added is included. This publication uses the following classification for dwelling units:
Single-family: Refers to dwellings commonly called "single house". It includes single dwellings that are completely isolated on all sides, including single dwellings linked to other dwellings below ground. Included are bungalows, split levels, two-storey single-family homes built by conventional methods or prefabricated.
Mobile homes: Refers to houses designed and constructed to be transported on their own chassis and for easy moving.
Cottage: Refers to dwellings that cannot be occupied year-round or on a permanent basis because the facilities required for comfort are inadequate.
Double or Semi-detached: Refers to dwellings in which each of the two dwellings are side by side and joined by a common wall or garage, but not attached to any other building and surrounded by open space.
Row Dwellings: Refers to a row of three or more dwellings attached to each other without dwellings above or below.
Apartment Building: Includes dwellings in a variety of buildings such as duplexes, semi-detached duplexes, triplexes, row duplexes, apartments as such and dwellings adjacent to non-residential structures.
Conversion: Refers to the number of dwellings added by conversion of existing structures.
Geographic classification
Geographic entities are classified according to Standard Geographical Classification (SGC) used by Statistics Canada. Each reporting entity is assigned a twelve-digit SGC code for identification according to the following geographic levels:
Province and territory (PR): There are ten provinces and three territories.
Economic region (ER): Refers to intraprovincial regions established by the Standards Division of Statistics Canada. There are seventy-six ERs.
Census division (CD): Refers to a group of census subdivisions established by provincial law. There are two hundred and eighty-eight CDs (data on this geographic group is available on request).
Census metropolitan area (CMA): Its delineation corresponds to the 2011 Census definition. The term CMA refers to the main labour market area of an urban area (the urbanized core) of at least 100,000 population, based on the Census population figures. The thirty-five CMAs are shown in this publication. Although the 2011 Census defines the Ottawa-Gatineau area as a single CMA, the area is shown in this publication as two separate entities since it is located in two different provinces.
Census agglomeration (CA): Refers to the smaller labour market area of an urbanized core of at least 10,000 population, as defined by the 2011 Census. There are one hundred and fourteen CAs in Canada. When a CA overlaps the boundaries of two provinces, it is shown partly in each province. The Lloydminster agglomeration is an exception to this rule. It is treated as if it was totally located in Alberta.
Other municipalities of at least 10,000 population: Refers to municipalities not included in census agglomerations but with populations of at least 10,000 inhabitants. The distinction is made between these municipalities and CAs in order to permit comparison between the Building Permits Survey and the Housing Starts and Completions Survey which refers to this geographical concept.
Rural area: Refers to all geographic entities not included in a CMA or CA and not identified as a population centre by the Canada Mortgage and Housing Corporation.
Census subdivision (CSD): Refers to the general term applying to municipalities, Indian reserves, Indian settlements and unorganized territories. However, since Indian reserves and settlements do not issue building permits, they are not included in this publication.
Non-standard geographic unit: The geographic units shown in this publication do not all satisfy the above definition of census subdivision. Some provincial or municipal administrations producing monthly reports do not correspond to the official geographic entities; they are nevertheless shown in this publication under the geographic entity used by these administrations. These so-called non-standard geographic units are few in number and are mostly concentrated in the Maritime provinces.
Territorial revisions
Territorial boundaries were established according to the 2011 Census definitions. Changes in boundaries, status or name of census subdivisions between censuses are introduced in this publication on a yearly basis. Changes affecting the other geographic units (CMAs, CAs, CDs and ERs) are introduced every five years, eighteen months following the census.
Data accuracy
Since the building permit data are extracted from municipal administrative documents, two types of response errors are possible: errors attributable to the permit applicant and errors in transcription by the responding municipality. However, experience has shown that transcription errors are not very common and the increasing number of municipalities producing computerized reports tends to reduce the frequency of this type of error. Errors attributable to an understatement of the cost of construction are more probable. Since permit fees are in most cases based on the value of the construction, this leads unquestionably to under-estimation of project values.
In the last years, an average of 98.0% of the municipalities covered by the survey filed their monthly reports for the Building Permits Survey. The average monthly revision rate over the last few years has been 0.5%.
Comparability of data and related sources
Comparison of data must be done with reservation considering that the methods of issuing permits and the methods of estimating building values can differ from one municipality to another. Also, comparisons involving different periods must take into account the constant increase in the number of municipalities participating in the survey.
This publication contains only part of the data produced on building permits. However, you may order unpublished tables or address special requests, to the Building Construction and Property Value Section (613-951-6321 or 1-800-579-8533). The series presented here is also available on CANSIM: Tables 026-0001 to 026-0008 and 026-0010.
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