Invitation to participate in the revision of the North American Industry Classification System (NAICS) Canada

Opened: August 2023

Introduction

Statistics Canada invites data producers and data users, representatives of business associations, government bodies at the federal, provincial and local levels, academics and researchers and all other interested parties to submit proposals for the revision to the North American Industry Classification System (NAICS) Canada.

Following the decision of the Statistics Canada's Economic Standards Steering Committee (ESSC) on April 28, 2023 to institute a permanent consultation process for NAICS Canada, proposals for changes to NAICS Canada may be submitted and reviewed on an ongoing basis. Only a cut-off date for considering proposed changes to be included into a new version of NAICS Canada will be instituted moving forward. For example, for NAICS Canada 2027, the deadline for changes to be included has been set to the end of June 2025. For revisions beyond 2027, such a cut-off date will be maintained at about one year and half prior to the release date of the new classification version based on the 5-year revision cycle.

As was done with NAICS Canada 2017 (2 updates), in exceptional circumstances, when a consensus is reached among the data producers and users at Statistics Canada, the classification might be revised before the regular revision cycle of 5-years, as the way of 'evergreening' of the standard.

In the context of statistical classifications, evergreening refers to updating the classification and the related reference (index) file on a continuous basis with the objective of maintaining timeliness and relevance. Though, evergreening does not necessary result in the release of a new version of the classification every year. A decision to release a new version (before the end of the regular 5 years revision cycle) needs to be discussed and assessed by key classification stewards considering potential impacts on data and statistical programs.

Objectives

We are seeking proposals for changes for two main reasons:

  • collect input from data producers and users as an integral part of the NAICS revision process, and
  • ensure users' needs continue to be met, therefore the classification remains relevant.

Background

The North American Industry Classification System was released for the first time in 1997, with NAICS 1997. This classification was developed through the cooperation of Statistics Canada, Mexico's Instituto Nacional de Estadistica y Geografia (INEGI) and the Economic Classification Policy Committee (ECPC) of the United States. Each country maintains its own version of NAICS (NAICS Canada, NAICS U.S., and NAICS Mexico). The three country versions are generally the same with some differences found primarily in wholesale trade, retail trade and government, and at the 6-digit national industry level.

NAICS replaced the existing industry classification system used in Canada, which was the Standard Industrial Classification (SIC). Since then, NAICS Canada, U.S. and Mexico have been revised on a 5-year cycle in 2002, 2007, 2012, 2017 and 2022. The three NAICS partner agencies meet regularly to discuss possible changes to the common NAICS structure.

Canada has adopted a permanent "evergreen" practice with regards to NAICS, which means the updating of NAICS Canada on an as-needed basis, with version updates between the standard 5-year revision milestones, usually to adapt to exceptional circumstances if structural changes are approved. In fact, these "evergreen" updates strive to be constrained to specific situations or cases, e.g., in the cases of NAICS Canada 2017 Version 2.0 where changes were made to Internet publishing activities and NAICS Canada 2017 Version 3.0 where the classification was revised to account for new industries created after Canada has adopted a new law legalizing cannabis for non-medical use with impacts on the whole Canadian economy and society. These changes were approved based on a consensus following demands from data producers and users at Statistics Canada and externally. The intent remains to minimize revisions of the structure of NAICS between revision cycles, as we are trying to strike a balance between having a timely or relevant classification and maintaining historical data series, in particular from a National Accounts perspective.

We will continue to look at the best way to communicate to the public about revisions not affecting the structure or scope of NAICS categories between revision cycles (e.g., adding new activities to help for coding or identification of their placement in the classification, clarifying the texts/explanatory notes, etc.).

Nature and content of proposals

Respondents are invited to provide their comments, feedback, and suggestions on how to improve the NAICS content. They must outline their rationale for proposed changes.

No restrictions have been placed on content. Respondents may propose virtual (not affecting the meaning of a classification item) and real changes (affecting the meaning of a classification item, whether or not accompanied by changes in naming and/or coding). Examples of real changes, those that affect the scope of the classification items or categories (with or without a change in the codes), are: the creation of new classification items, the combination or decomposition of classification items, as well as the elimination of classification items. A classification item (sometimes referred to as a "class") represents a category at a certain level within a statistical classification structure. It defines the content and the borders of the category, and generally contains a code, title, definition/description, as well as exclusions where necessary. For NAICS, classifications items are: Sectors (2-digit), Subsectors (3-digit), Industry group (4-digit) and Industry (5-digit), and Canadian industry (6-digit).

Key dates for NAICS Canada 2027 revision process

Here are key dates for the NAICS Canada 2027 revision process:

  • Official public consultation period for changes proposed for inclusion in NAICS Canada 2027: Ongoing to the end of June 2025. Beyond 2027, the cut-off date to incorporate approved changes from proposals into the new classification version will be around a year and half before the release date of the next version of NAICS Canada based on the 5-year revision cycle.
  • Completion of trilateral negotiations: September 2025.
  • Public notice containing proposals in consideration for changes in NAICS Canada: November 2025.
  • Public notice containing the final approved proposal for changes in NAICS Canada: February 2026.
  • Public release of NAICS Canada 2027 Version 1.0: January 2027.

The next revised version of NAICS Canada will be called NAICS Canada 2027 Version 1.0.

Individuals and organizations wishing to submit proposals for changes in NAICS Canada may do so at any time, in accordance with the permanent consultation process adopted by Statistics Canada with regards to NAICS Canada.

Submitting Proposals

Proposals for NAICS Canada revisions must contain the contact information of those submitting the change request:

  1. Name
  2. Organization (when an individual is proposing changes on behalf of an organization)
  3. Mailing address
  4. Email address
  5. Phone number

Should additional information or clarification to the proposal be required, participants might be contacted.

Proposals must be submitted by email to statcan.naics-consultation-scian-consultation.statcan@statcan.gc.ca.

Consultation guidelines for submitting proposals for change in NAICS Canada

Individuals or organizations are encouraged to follow the guidelines below when developing their proposals.

Proposals should:

  • clearly identify the proposed addition or change to NAICS; this can include the creation of entirely new classes, or modifications to existing classes;
  • outline the rationale and include supporting information for the proposed change;
  • if possible, describe the empirical significance (i.e. revenue, expenses, value-added, employment) of proposed changes, and especially changes affecting the scope of existing classification items/categories;
  • new industries could be subjected to tests of empirical significance with respect to revenue, value added, employment, and number of establishments;
  • be consistent with classification principles (e.g., mutual exclusivity, exhaustiveness, and homogeneity within categories)
  • be relevant, that is
    • describe the present analytical interest;
    • enhance the usefulness of data;
    • base the proposal on appropriate statistical research or subject matter expertise.

Please consider the questions below when preparing your input for the consultation on the revision of NAICS Canada:

  • Are there socioeconomic activities for which you cannot find a satisfactory NAICS code?
  • Are there classification items that you find difficult to use because their descriptions are vague or unclear?
  • Are there pairs of classification items you find difficult to distinguish from each other? Are there boundaries that could be clarified?
  • Are there socioeconomic activities that you think should have their own NAICS category? Please indicate at which level and why, with the support documentation about the activities (see guidelines above for a proposal).
  • Are there activities that you are able to locate in NAICS, but you would like to have them located in a different sector or industry?
  • Is the language or terminology used in NAICS in need of updating to be consistent with current usage?

Note that submissions do not need to cover every topic; you can submit your comments on your particular area(s) of concern only.

The following criteria will be used to review the proposals received:

  • consistency with classification principles such as mutual exclusivity, exhaustiveness, and homogeneity of activities and output (products) within categories;
  • have empirical significance as an industry
  • data be collectable and publishable;
  • proposal can be linked to a funded program for data collection;
  • be relevant, that is, it must be of analytical interest, result in data useful to users, and be based on appropriate statistical research and subject-matter expertise;
  • be consistent with the Canadian System of National Accounts;
  • special attention will be given to specific industries, including:
    • new or emerging activities
    • activities related to new production processes.

NAICS Classification Structure

NAICS has a 6-digit, 5-level classification structure, consisting of 2-digit sectors, 3-digit sub-sectors, 4-digit industry groups, 5-digit industries and 6-digit national industries. Changes may be proposed for any level, but changes to the 2-digit to 5-digit levels will be subject to trilateral negotiation and approval. Changes to the 6-digit national industry level are at the discretion of each trilateral partner (i.e., Statistics Canada makes the final decision about changes to 6-digit industries in NAICS Canada).

North American Industry Classification System (NAICS) Canada 2022 Version 1.0 is the latest version of the classification for the participants of this consultation to base their input on. In the context of a permanent consultation process, persons or organizations proposing a change should always make sure they refer to the latest available version of NAICS Canada.

Costs associated with proposals

Statistics Canada will not reimburse respondents for expenses incurred in developing their proposal.

Treatment of proposals

Statistics Canada will review all proposals received. Statistics Canada reserves the right to use independent consultants or government employees, if deemed necessary, to assess proposals.

If deemed appropriate, a representative of Statistics Canada will contact respondents to ask additional questions or seek clarification on a particular aspect of their proposal.

Please note that a proposal will not necessarily result in changes to NAICS Canada.

Official languages

Proposals may be written in either of Canada's official languages – English or French.

Confidentiality

Statistics Canada is committed to respecting the privacy of consultation participants. All personal information created, held or collected by the Agency is protected by the Privacy Act. For more information on Statistics Canada's privacy policies, please consult the Privacy notice.

Thank You

We thank all participants for their continued interest and participation in the various NAICS engagement activities.

Enquiries

If you have any enquiries about this process, please send them to statcan.naics-consultation-scian-consultation.statcan@statcan.gc.ca.

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