Introduction
This document describes the results from a consultation initiated in August, 2023 concerning updates to the North American Product Classification System (NAPCS) Canada. The purpose of the consultation was to solicit input from users of NAPCS Canada on revisions for the classifications. The revised classification will be NAPCS Canada 2027 Version 1.0. Statistics Canada invited 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 NAPCS Canada.
NAPCS Canada is Statistics Canada's primary classification for products and is widely used throughout business programs at Statistics Canada. It can also be used in other governmental organizations, in academia, and in business.
Statistics Canada updates NAPCS Canada on a 5-year revision cycle. The next version of this classification is scheduled to be released in February, 2027.
The consultation was conducted electronically through public announcements that described the upcoming NAPCS Canada revisions, listed the types of inputs sought, provided a timeline for the consultation and gave contact information for users to make submissions and contact Statistics Canada with questions and comments. The announcements were disseminated through the Statistics Canada's website (Consulting Canadians and DDSM), and Facebook, LinkedIn, Twitter, and Reddit, as well as GCXchange.
In addition to soliciting proposals from external users and stakeholders outside of Statistics Canada, one of the key parts of the consultation on the revision of NAPCS Canada is the on-going interactions within the Agency. The statistical standards development unit consulted numerous statistical programs and the System of National Accounts during the consultation and revision process.
This report summarizes the feedback received from the consultation. The consultation process and period are described below.
Background
NAPCS Canada is a 7-digit classification, grouped in a 4-level structure: groups formed by 3-digits, classes formed by 5-digits, subclasses by 6-digits and 7-digit details.
The first version of NAPCS Canada, known as provisional version 0.1, was published in 2007. The development of the classification started a few years earlier as a joint project of the national statistical agencies of Canada, Mexico and the United States (U.S.). The NAPCS project followed the adoption by the three countries of a common industry classification, the North American Industry Classification System (NAICS) in 1997. The development of NAPCS was meant to serve the same purpose for product statistics.
Since the creation of this product classification, NAPCS Canada, has been revised on a 5-year cycle, in 2012, 2017 and 2022.
Following the decision of Statistics Canada's Economic Standards Steering Committee (ESSC) on April 28, 2023 to institute a permanent consultation process for NAPCS Canada, proposals for changes to NAPCS Canada may be submitted and reviewed on an ongoing basis. Only a cut-off date for considering proposed changes to be included in a new version of NAPCS Canada will be instituted moving forward. For example, for NAPCS Canada 2027, the deadline for changes to be included was set to the end of June 2025. For revisions beyond 2027, such a cut-off date will be maintained at about one and a half years prior to the release date of the new classification version based on the 5-year revision cycle.
What we asked
Statistics Canada invited 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 Product Classification System (NAPCS) Canada (See Invitation to participate in the revision of the North American Product Classification System (NAPCS) Canada).
Changes could be proposed for any level, however changes to the 3, 4 and 5-digit levels have the most impact on the existing statistical programs using NAPCS Canada (national accounts, price indexes for businesses, international trade statistics, retail trade statistics, agriculture statistics, manufacturing statistics, etc.), and also on the correspondence to be maintained with Trilateral NAPCS. Changes might include changes to the structure of the classification (i.e. addition of classes or deletion of classes), changes to the wording of definitions, and changes to examples, inclusions and exclusions.
The North American Product Classification System (NAPCS) 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 must always make sure they refer to the latest available version of NAPCS Canada.
What we heard
Staff from the Centre for Statistical Standards and Geomatics (formerly Centre for Statistical and Data Standards) at Statistics Canada manage the responses to the public consultation announcement. These responses were all received by e-mail.
The proposal received included a proposal from concerning animal agriculture and the terminology used to refer to farm animals, a proposal concerning potatoes and the creation of new detailed classes, a proposal concerning agrifood and seafood and the creation of new classes, and a proposal concerning lighting products and the creation of new examples for new lighting products.
We also received requests for changes to NAPCS that were generated internally or in consultation with our American and Mexican partners. These included changes to the treatment of parts for electric vehicles, including batteries, mined lithium products, energy storage, space ports and products related to the bioeconomy.
What we did so far
Following receipt of proposals for changes we investigated the changes with respect to the criteria set out for evaluating changes, which included the rationale for the proposed changes, the empirical significance of any new classes, consistency with classification principles (e.g. mutual exclusivity, exhaustiveness, and homogeneity within categories) and relevant to present analytical interest and data. We consulted with our subject matter experts and the system of national accounts on the changes. As well, we followed and explored updates to the United Nations’ Central Product Classification (CPC), to learn how those changes might help inform the changes ghat we are making. Revision for the CPC affected, among other areas, intermediation services activities, financial services, forestry, fishery, fertilizer, and pesticide products, and energy products.
Next steps
The task team is currently reviewing all proposals in accordance with the statistical classification principles, the underlying concepts, and the classification criteria for NAPCS, as outlined in the Appendix of this report. Following this review, Statistics Canada will issue a public notice in spring 2026 outlining the final approved proposals for inclusion in NAPCS 2027 V1.0, with the public release of NAPCS 2027 V1.0 scheduled for February 2027.
Appendix : Governing principles and underlying concepts and criteria
Statistical Classification Principles
Principle 1: Follow internationally accepted practices and principles on how to classify products (also see Introduction to the North American Product Classification System (NAPCS) Canada 2022 Version 1.0). Because the purpose of NAPCS Canada is primarily to provide a framework to support consistent statistical information on Canadian products, it is important to specify the scope of each category in the classification. Principle 1 supports the production and dissemination of consistent and sound statistics. The NAPCS Canada team and the Trilateral steering committee on NAPCS use this information to evaluate whether proposed changes are properly placed in the classification structure.
Principle 2: Respect of the internationally recognized principles of well-described statistical classifications, being:
- well defined universe: categories at each level of the classification structure must reflect a well-defined universe or scope;
- classification is exhaustive: it covers all possible elements in the universe even if all examples of such universe are not provided in the publication;
- categories are mutually exclusive: no overlapping in the scope of each classification item or category (to avoid double counting);
- classification structure is hierarchical: lower categories are dependent of their higher categories;
- classification structure is rectangular: the classification has a code represented at every level across its whole structure, regardless of the scope of each category;
- classification is comparable to other classifications (of the same domain);
- classification categories are empirically significant;
- classification is organized around one or few concepts (e.g., industry, economic activity);
- classification contains groupings meaningful to users;
- classification is widely adopted.
Principle 3: The classification is related to data that is collectible and publishable (collectability and reportability): whether data can be collected and reported on the product class. For a detailed product to be included in NAPCS Canada and expecting statistics to come out of it, Statistics Canada must be able to collect and report data, otherwise, categories will not provide opportunities to produce relevant statistics. Statistics Canada is responsible for producing data across a broad range of products and product-related classes.
Principle 4: The classification supports the maintenance of time series continuity to the extent possible; that is, the ability to maintain data series over time without interruption due to classification changes. To the extent possible, new product classes proposed for the current version of NAPCS Canada and beyond should be easily linked by appropriate correspondence to previous version the NAPCS Canada (e.g., NAPCS Canada 2022 to NAPCS Canada 2017).
Guidelines developed by Statistics Canada provided for the launch of the permanent consultation process for NAPCS Canada will assist users and the NAPCS Canada team and working groups in consistently making changes to NAPCS Canada.
Principle 5: The classification continues to be relevant, that is, it must be of analytical interest, result in data useful to users, and be based on appropriate statistical research, subject-matter expertise and administrative relevance aligned with statistical classification principles and needs.
Principle 6: The prevalence of classification principles and statistical needs: NAPCS Canada is designed primarily for statistical purposes. Although there can be various uses of NAPCS Canada for non-statistical purposes (e.g., for administrative, regulatory, or policy functions), the requirements of government agencies or private users that choose to use NAPCS Canada for non-statistical purposes are responsible for such use of the classification. As a result, the NAPCS Canada team reviews comments and develops its recommendations based on established statistical classification principles and guidelines. Making changes for strictly administrative rather than classification purposes is not supported. Similarly, the volume of comments does not determine what the recommendations will be, and just submitting a request for a change does not automatically result into a change in NAPCS Canada.
Underlying Concepts and Classification Criteria of the NAPCS Canada
Unit of observation, scope of classification and grouping criteria
Statistical classifications are built around three basic concepts: the object classified or statistical unit, the scope or universe of the classification, and the criteria used to group statistical units in standard categories. In the case of NAPCS Canada, two of these concepts – the statistical unit and the scope of the classification - are modelled on concepts of the 2008 System of National Accounts (SNA).
From the 2008 SNA the following elements emerge as fundamental to identify products as statistical units:
- they are goods and services that result from production processes;
- they are in demand to satisfy the needs of households or the community, or used to produce other goods or services;
- they are produced by one unit and supplied to another; and
- they are transacted (bought, sold, transferred or placed in inventory).
The SNA concepts underlying the production accounts were also used to determine the scope of NAPCS Canada. It is modelled on one of the five elements that define the production boundaries of the SNA. From the 2008 SNA manual:
"The production of all goods or services that are supplied to units other than their producers, or intended to be so supplied, including the production of goods or services used up in the process of producing such goods or services". (paragraph 6.27a)
This concept embodies both market and non-market goods and services.
The classification criteria refer to the attribute(s) of the statistical unit used to create the most detailed categories of the classification and to group them into analytical aggregates.
Some classifications are built by the systematic application of one or more criterion. Other classifications use mixed criteria to create detailed categories and groupings. NAPCS Canada falls into this category, in part, as a result of the nature of the classification, and in part as a result of characteristics inherited from classification systems embedded into it.
The criteria most commonly used to identify products in NAPCS Canada, separately or in combination, are:
- Physical characteristic of the product
- Stage of processing
- Technology or process
- Purpose or intended use
- Function
The organization of detailed categories into higher level groupings is not based on a unique criterion either, but there is a dominant principle of organization nested in NAPCS Canada, the industry of origin. The presentation and organization of NAPCS Canada is similar to what is found in industry classifications.
Statistical purposes
NAPCS Canada is a classification of products (goods and services) designed primarily for use in statistical programs to support the integration of product statistics. It is Statistics Canada’s official standard for the collection, processing and dissemination of product statistics in its economic, business and trade programs. This includes, for example, statistics on the value of export and imports by type of product, the value of industry production and consumption by type of product, and industrial product prices indices.
The structure of NAPCS Canada is hierarchical. This type of classification system enables the collection, analysis and publication of data at different levels of detail, in a standardized way.