Introduction

Purpose of the classification

The North American Product Classification System (NAPCS) Canada is a classification of products (goods and services) designed primarily for use in statistical programs. It is Statistics Canada's official standard for the collection, processing and dissemination of product statistics in its economic, business and trade statistics programs. This includes, for example, statistics on the value of exports and imports by type of product, the value of industry production and consumption by type of product, and industrial product price indices.

Statistical classifications are comprehensive structured lists of mutually exclusive categories. In practice, this means that there is always a category in the classification if the object falls within the scope of the classification, and that the object can be classified in only one category. The section titled "The underlying concepts" further discusses the object and scope of NAPCS Canada.

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. The section titled "The classification structure and coding system" discusses the structure of NAPCS Canada in greater detail.

The purpose of standard classifications is to support the integration of data obtained from multiple sources by organizing the documentation, collection, processing, presentation and analysis of data in a systematic manner. Classifications are essential elements of a coherent and efficient statistical system.

NAPCS Canada has been developed to support the integration of product statistics. NAPCS Canada 2017 was approved as the departmental standard on September 19, 2016. The next section provides an overview of the product statistics domain to give a sense of the potential applications of the classification.

Historical background

The first version of NAPCS Canada, known as version 0.1, was published in 2007. It was the first in a series of developments to re-organize the system used to classify product data in Statistics Canada's business and trade statistics programs.

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. 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 purpose of the NAICS project was to develop a standard that allowed comparisons of industry data among the three participating countries. The development of NAPCS was meant to serve the same purpose but for product statistics.

In the beginning, the trilateral project focused on developing a classification of service products. At that time, the national statistical systems produced much less information for services than for goods, and the development of a detailed standard classification for service products was seen as a necessary first step towards improving that component of the statistical system.

The first version of NAPCS Canada was largely based on unpublished trilateral work. The scope of the classification was limited to the products (outputs) of selected service-producing industries. Though presented as provisional, parts of the classification had been tested and used to collect product data in selected annual service industry surveys.Footnote 1 The classification also provided a basis to define service products in the Input-Output Commodity Classification (IOCC).Footnote 2 The simultaneous integration of NAPCS Canada in the collection system and the economic accounts made a significant contribution towards improving the coherence of product data.

At the time, NAPCS Canada (version 0.1) was complemented by several specific purpose classifications for the collection and publication of statistics concerning the supply and use of goods. Some of these classifications had the status of departmental standards, for instance the Annual Survey of Manufactures (ASM) - List of Goods, the Canadian Export Classification (CEC) and the Customs Tariff (CT). Others were not published as standard classification systems, yet were instrumental in the collection of product data. This included, for example, the classifications used to collect and organize data on the production of agricultural and mining products, and the classifications used to produce raw material price indices (RMPI) and industrial product price indices (IPPI).

The main weakness of the multi-classification system was the lack of integration between them. They had been developed at different points in time, sometimes on the basis of different criteria, to serve different purposes.

In particular, the lack of comparability between data on the domestic production of goods and the exports and imports of those same goods was seen as a significant shortcoming. The second phase in the development of NAPCS Canada addressed that issue.

NAPCS Canada 2007 was published in 2011. The scope of NAPCS Canada 2007 was limited to the universe of tradable goods, and it therefore complemented version 0.1 of NAPCS Canada whose scope was limited to selected services.

NAPCS Canada 2007 consisted of groups (3 digits) and classes (5 digits). The class level was developed to integrate the classifications used for production and international merchandise trade statistics. The approaches to integrate these classifications into NAPCS Canada had to differ however, due to constraints in their implementation.

In the case of international merchandise trade classifications, the approach consisted of using concordances. The classifications of exports and imports - the Canadian Export Classification (CEC) and the Customs Tariff (CT) - are derived from the Harmonized Commodity Description and Coding System (HS), a mandatory international classification maintained by the World Customs Organization (WCO). The concordance was developed between the classes of NAPCS Canada 2007 (5 digits) and those of the CEC and CT. This approach allowed for the presentation of import and export statistics on the basis of the HS as required by international agreement and on the basis of NAPCS as required for coherence of production and trade statistics within the Canadian statistical system.

The systems used to classify the domestic production of goods on the other hand are developed and maintained by Statistics Canada. The intent was to integrate those classifications as well as those used for industrial producer prices indices (IPPI) and raw material price indices (RMPI) at a level below the class level in a future version of NAPCS Canada.

The 5-digit classes of NAPCS Canada 2007 were aggregated into 3-digit groups. The group level was designed to serve two purposes:

  • Provide analytical groupings to publish selected statistics.
  • Provide a basis to define higher level categories of alternate structures or variants. The first variant was for the presentation of export and import statistics. The new higher level categories replaced the summary import groups (SIG) and the summary export groups (SEG) that had been in use for several decades.

International merchandise trade statistics were first published on the basis of NAPCS in October 2012.

NAPCS 2007 represented an important step towards the greater harmonization of product statistics. In addition to providing a framework to integrate existing production and international trade statistics, it established an approach to further develop and complete the system. The approach was fully implemented in NAPCS Canada 2012 (version 1.0), published in 2013.

The main accomplishment of NAPCS Canada 2012 was to merge previous versions of NAPCS Canada and program-specific classificationsFootnote 3 into a single system covering all goods and services. The classification system was designed to accommodate the needs and constraints of several business and trade statistics programs. The design of the classification is discussed in more detail in the section titled "The classification structure and coding system".

In addition to a traditional standard hierarchical structure, NAPCS Canada 2012 embedded a system to create variants of the standard classification for programs that required a more detailed classification (extension variants), or a different aggregation structure to meet different analytical needs (regrouping variants). The design of variants is discussed in more detail in the section titled "Classification variants".

Two updates to NAPCS Canada 2012 (versions 1.1 and 1.2) have been released, both in 2015. The updates were meant to improve the relevance and coherence of the classification. The most significant change was the addition of definitions for all categories, introduced in version 1.2. At the lowest level of the classification, definitions include a descriptive text, as well as illustrative examples, inclusions and exclusions where necessary. This finalized the development of NAPCS Canada into a complete standard statistical classification.

What is now renamed NAPCS Canada 2017 Version 1.0 was released on February 15, 2017, which constituted the first revision of the classification and was coordinated with the revision of North American Industry Classification System (NAICS).

Although NAPCS Canada revisions are planned to occur every five years, Statistics Canada needs to respond to the legalization of cannabis by measuring various aspects of the introduction of cannabis in the Canadian economy and society. An important part of measuring the economy and society is using statistical classifications. It is common practice with classifications that they are updated and revised as new industries, products, occupations and educational programs are introduced into the Canadian economy and society. The revision of NAPCS Canada became necessary to respond to the legalization of cannabis for non-medical use, which brings new products on market that will have an immediate impact in the Canadian economy and society. The new cannabis legal framework is planned to officially take effect on October 17, 2018.

NAPCS Canada 2017 Version 2.0 is being released so that statistical programs are ready for the new cannabis legal framework, and that users of NAPCS Canada have access to an updated product classification. At the same time, other parts of the classification were updated based on the needs to clarify some of the products in the classification (see Summary of changes).

The underlying concepts

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).Footnote 4

The SNA provides the set of definitions, classifications and accounting rules to support the production of internationally comparable economic accounts. The concepts underlying the production account are particularly relevant for product classifications. They are described in detail in Chapter 6 (The production account) of the 2008 System of National Accounts (SNA) manual. The sections that follow provide a brief overview and relevant excerpts from it.

The statistical unit

The following are relevant excerpts from the 2008 SNA manual concerning the concept of product in economic accounts:

"Products are goods and services (including knowledge-capturing products) that result from a process of production." (paragraph 6.14)
"Goods are physical, produced objects for which a demand exists, over which ownership rights can be established and whose ownership can be transferred from one institutional unit to another by engaging in transactions on markets. They are in demand because they may be used to satisfy the needs or wants of households or the community or used to produce other goods or services." (paragraph 6.15)
"Services are the result of a production activity that changes the conditions of the consuming units, or facilitates the exchange of products or financial assets. These types of services may be described as change effecting services and margin services respectively. Change-effecting services are outputs produced to order and typically consist of changes in the conditions of the consuming units realized by the activities of producers at the demand of the consumers. Change-effecting services are not separate entities over which ownership rights can be established. They cannot be traded separately from their production. By the time their production is completed, they must have been provided to the consumers.... Margin services result when one institutional unit facilitates the change of ownership of goods, knowledge-capturing products, some services or financial assets between two other institutional units." (paragraphs 6.17 and 6.21)
"Knowledge-capturing products concern the provision, storage, communication and dissemination of information, advice and entertainment in such a way that the consuming unit can access the knowledge repeatedly ... Whether characterized as goods or services, these products possess the essential common characteristic that they can be produced by one unit and supplied to another, thus making possible division of labour and the emergence of markets." (paragraph 6.22)

From these excerpts, the following elements emerge as fundamental to identify products:

  • 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 use of these criteria in combination excludes services produced for own use by households.

As is often the case, there are exceptions to the rules. NAPCS Canada includes a few products that do not result from production processes, namely recovered products such as recycled paper and plastics and used merchandise. These products result from a consumption process rather than a production process. They are however in demand and their inclusion allows for the measurement of significant transactions in selected surveys that use NAPCS Canada.

The scope of the classification

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.

"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.

In addition to the production of goods or services supplied to units other than their producers, the production boundary of the SNA includes the production of selected products for final consumption or capital formation by their producers, as well as the production of housing services by owner occupiers. This type of production is generally known as own account production.

NAPCS Canada does not separately identify products produced on own account. The inclusion of own account production in the production boundary of the SNA is more a matter of accounting than a matter of classification. From a classification point of view, products produced on own account can be classified in the same manner as those produced for others. For example, housing services produced by owner occupiers could be classified with housing services produced for market. The relevant category of NAPCS is class 76411 – Residential rents.

The inclusion or exclusion of assets is an issue often raised in discussions of the scope of product classifications. NAPCS Canada is a product classification, not an asset classification. As is the case in the SNA, assets and products are classified using different classifications in the Canadian system.

That said, most assets begin their life cycle as products resulting from a production process. These products later become assets by virtue of their use as capital in a production process. These are known in the SNA as non-financial produced assets, and they are products in NAPCS Canada. For example, this would include machinery and software.

So called non-financial non-produced assets however are out of scope for NAPCS Canada. The SNA describes these assets as "consisting of three categories: natural resources; contracts, leases and licences; and purchased goodwill and marketing assets". Though the assets are not in scope for NAPCS because they are not produced, the services of these assets are in scope since they are produced. For example, the services of natural resources assets are covered by NAPCS 6511121 - Licensing of rights to explore for or exploit renewable and non-renewable resources and the services of franchise assets are covered by NAPCS 6511114 - Franchising agreements.

Financial assets are also out of scope for NAPCS Canada.

The universe of NAPCS Canada can be summarized as follows:

Out of scope

  • Financial assets
  • Non-financial, non-produced assets (except the services related to them)

In scope

  • Non-financial, produced assets (as products, not as assets)
  • Market goods, intangible goods and services
  • Non-market public goods and services
  • Recovered and used products (even if not the result of production)

The classification criteria

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. The attribute used to create the most detailed categories of a classification must be observable and verifiable in the context of a statistical operation, or it must be possible to derive the information from a set of observed characteristics.

Some classifications are built by the systematic application of one or more criterion. The National Occupational Classification (NOC) is a good example of such a system. The NOC uses two attributes of jobs: the ten broad occupational categories are based on skill type and the categories within are largely based on skill level. The North American Industry Classification System (NAICS) also defines its most detailed categories on the basis of a single criterion whenever feasible; establishments are grouped into industries according to the similarity in the production processes used to produce goods and services.

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 universe of products is very diverse. NAPCS Canada recognizes close to 3,000 categories of goods and services at its most detailed level (7-digit) to represent that diversity. In theory though, it could include several times that number of detailed categories, but such a classification would not be sustainable in a statistical system. One of the challenges in building such a system is to develop useful criteria to identify a manageable number of detailed categories. Because the universe of products is so diverse, it is not possible to use a single criterion.

The criteria most commonly used to identify products in NAPCS Canada, separately or in combination, are:

  • Physical characteristic of the product – For example, live animals are classified by species, ores and concentrates by type of metal or mineral deposit, and crude oil by density.
  • Stage of processing – For example, unwrought metal products are distinguished from basic and semi-finished metal products, and pulp and paper products are distinguished from converted paper products.
  • Technology or process – For example, cold-rolled steel products are distinguished from hot-rolled steel products, transportation services are distinguished by mode, and advertising space and time and broadcasting distribution services are classified by mode of delivery (in print, cable or satellite television, online (Internet), etc.).
  • Purpose or intended use – For example, fresh potatoes are classified according to their intended use such as for table consumption, for processing or for seed; architectural and engineering services are classified according to the type of project into which they are embedded, education services by the nature of the program, and public administration services according to purpose served.
  • Function – For example, fixed telecommunication are distinguished from mobile telecommunications, management services are classified according to the type of advice provided, and personal and personal care services are classified according to the need being fulfilled.

The number of categories at the most detailed level of NAPCS Canada reflects the accumulated and learning experiences with the implementation of product classifications.

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.

This characteristic is inherited from classifications embedded into NAPCS Canada; many of these classifications had been developed to collect product data (outputs) for specific industries and the Supply and Use Classification of the Input-Output framework that underlies the class level of NAPCS Canada is very much based on an industry of origin model.

As a result, the presentation and organization of NAPCS Canada is similar to what is traditionally found used in industry classifications. The outputs of primary industries (agriculture, forestry and mining) appear at the beginning of the structure, followed by those of manufacturing industries, transportation services industries, trade industries, and other services producing industries.

The approach used in NAPCS Canada to create detailed categories and group them into analytical groupings is not unique. The United Nations Central Product Classification (CPC) and the Eurostat Standard Classification of Product by Activity (CPA) use a similar approach. The CPC and CPA are comparable to NAPCS Canada in purpose and in scope.

The classification structure and coding system

NAPCS Canada contains a standard classification structure and standard variants of that structure. The standard structure is intended for broad use, whereas each variant is designed to meet a specific user need.

The standard classification structure

The standard classification structure is hierarchical, that is, a structure where categories at the lower levels are aggregated into the next higher level. It comprises four levels; group, class, subclass and detail. The table below provides the number of categories within each of these levels.

Nomenclature and number of categories within each level of NAPCS Canada 2017 Version 2.0
Level Coding Number of categories
Group 3-digit code 158
Class 5-digit code 512
Subclass 6-digit code 1,470
Detail 7-digit code 2,893

The advantage of hierarchical classifications is that they enable the collection, dissemination and analysis of data at different levels of detail, in a standardized way. For example, a survey program may collect data using the most detailed level of the classification but publish data at a higher level to protect confidentiality.

NAPCS Canada is unique in that each level of the hierarchy has been designed with a particular use in mind. This approach was adopted in recognition that different product statistics programs can support a more or less detailed classification, and to facilitate the integration of different types of product data. The main purpose of each level of the classification is described below, from the most detailed to the most aggregated level.

The detail level (7-digit) of the classification was designed to be the most precise for which business statistics programs would collect and publish data on the outputs of industries. This level of the classification is most commonly used in annual industry surveys to collect data on revenues by type of goods or services produced.

The primary purpose of the subclass level (6-digit) is to support the production of price indices for the products defined in NAPCS. At the time of publishing NAPCS Canada 2017, this use was limited to the production of industrial product price indices (IPPI), raw material price indices (RMPI) and international merchandise trade price indices (IMTPI). The IPPI program measures price changes at the factory gate for products sold by Canadian manufacturers and the RMPI program measures price changes for raw materials purchased by Canadian industries for further processing. The universe of industrial products and raw materials represents about half of the subclasses of NAPCS. The IMTPI measures price changes for imported and exported goods.

The class level (5-digit) is the target level to produce coherent statistics in current and constant dollars on the supply and use of products, including the production, imports, exports and consumption of products. It is at the core level of the classification. As mentioned earlier in the introduction, the input-output accounts provide the framework to integrate product statistics into a coherent system that describes the supply and use of goods and services in our economy. For that reason, the Supply and Use Product Classification (SUPC) used for the production of input-output tables is largely embedded at the class level of NAPCS.

Finally, the group level (3-digit) provides higher level aggregates primarily for presentation and analytical purposes. This level is also the basis to define alternative aggregation structures, known as regrouping variants (discussed in the next section).

NAPCS Canada 2017 uses a traditional hierarchical coding system where the code of a child adds a digit to the code of the parent. The classification of crude oil and bitumen (group 141) shown below illustrates how the coding system works.

The classification of crude oil and bitumen (group 141)
Code Title
141 Crude oil and bitumen
14111 Conventional crude oil
141111 Conventional crude oil
1411111 Light and medium crude oil
1411112 Heavy crude oil
14112 Crude and diluted bitumen
141121 Crude and diluted bitumen
1411211 Crude bitumen
1411212 Diluted bitumen
14113 Synthetic crude oil
141131 Synthetic crude oil
1411311 Synthetic crude oil

The reader will note that a category at a lower level can be identical to a category at the next higher level; in the example above, synthetic crude oil is found at the detail (1411311), subclass (141131) and class (14113) levels. This approach ensures that the classification is comprehensive at every level.

In addition to codes and titles, NAPCS provides definitions to help users understand the intended scope of each category and facilitate implementation. The definitions are constructed based on a set of guidelines developed by the Neuchâtel group of the United Nations Economic Commission for Europe (UNECE);Footnote 5 and guidelines from the Generic Statistical Information Model (GSIM) – Statistical Classifications Model. The definition at the most detailed level includes:

  • A general description of the category
  • A list of illustrative examples
  • Where necessary, a list of borderline cases that belong to the category (inclusions)
  • Where necessary, a list of borderline cases that do not belong to the category with a reference to the classification codes to which the excluded cases belong (exclusions).

Classification variants

Standard classifications are essential components in a coherent statistical system. That said, it is impossible for a single classification to serve all analytical needs. This limitation of standard classifications is well recognized in the field and has been addressed by the development of standard classification variants, of which there are two types:

  • Extension variants add one or several levels below the most detailed level of the standard classification by splitting categories of the standard classification.
  • Regrouping variants add one or several levels above a level of the standard classification by regrouping categories of the standard classification.

Typically, classification variants are subject-specific and are narrower in scope than the complete standard classification. They are not meant to replace the standard, but rather to complement it by adding new categories where needed (extension variants), or enhancing the analytical usefulness of the classification by changing its organization (regrouping variants). Ideally, statistical programs that adopt a classification variant can also present data on the basis of the standard classification.

There are now eight variants of NAPCS Canada 2017 Version 2.0:

  • Agricultural goods (extension variant) - This variant adds two additional levels (8 and 9 digits) below the detailed categories of NAPCS Canada 2017 Version 2.0 covering farm and unprocessed fish products.
  • Capital expenditures (CAPEX) on non-residential construction (regrouping variant) - This variant defines two new high level aggregates (sections and divisions). The divisions result from the regrouping of standard classes (5-digit) of NAPCS Canada 2017 Version 2.0 covering non-residential buildings, civil engineering works (infrastructures), selected mining and oil and gas support services, and selected remediation services. The codes for the added sections and divisions are alphanumeric. The variant replaced a program specific classification in use since 1965.
  • Computer and peripherals price index - CPPI (extension variant) - This variant adds two additional levels (8 and 9 digits) below the detailed categories of NAPCS Canada Version 2.0 covering computers, computer peripherals and smartphones.
  • Farm Products Price Index - FPPI (regrouping variant) - This variant defines a new aggregate level (sections) by regrouping 3-digit categories of NAPCS Canada 2017 Version 2.0 covering farm products. Other aggregate levels were also created to regroup 5, 6 and 7 digits categories, where needed. An additional level of detail (8 digit) was kept as it is shared with the Agricultural goods extension variant. The coding for the new levels is alphanumeric.
  • Industrial Product Price Index - IPPI (regrouping variant) - This variant defines a new aggregate level (sections) by regrouping 3-digit categories of NAPCS Canada 2017 Version 2.0 covering products sold by Canadian manufacturers. The coding for the new sections is alphanumeric. The variant replaced a program specific classification (Principal Commodity Groups or PCG) in use since the early 1980s.
  • Manufacturing and Logging (extension variant) - This variant adds an extra 8-digit variant code (level 5), under the 7-digit standard classification's detail code (level 4). These extra digit variant codes essentially cover areas related to wood and lumber products for NAPCS Canada 2017 Version 2.0.
  • Merchandise import and export accounts (regrouping variant) - This variant defines two new high level aggregates (sections and divisions). The divisions result from the regrouping of standard groups (3-digit) of NAPCS Canada 2017 Version 1.0 covering imported and exported merchandise. The codes for the added sections and divisions are alphanumeric. The variant replaced the summary import groups (SIG) and summary export groups (SEG) that were in use for several decades.
  • Raw Materials Price Index - RMPI (regrouping variant) - This variant defines a new aggregate (sections) by regrouping 3-digit categories of NAPCS Canada 2017 Version 2.0 covering raw materials processed by Canadian manufacturers. The coding for the new sections is alphanumeric. The variant replaced a program specific classification (Principal Commodity Groups or PCG) in use since the early 1980s.

Relationship to other classifications

North American Industry Classification System (NAICS) Canada

NAICS Canada is the official standard to group Canadian establishments into industries. It supports the collection, processing and dissemination of industry-based statistics.

The introduction of the NAICS manual describes the classification as "...an industry classification system developed by the statistical agencies of Canada, Mexico and the United States. Created against the background of the North American Free Trade Agreement, it is designed to provide common definitions of the industrial structure of the three countries and a common statistical framework to facilitate the analysis of the three economies."

NAICS Canada and NAPCS Canada are fundamentally different in that they have their own purpose, underlying concepts and scope. The table below outlines the basic characteristics of the two systems to illustrate those differences.

Basic characteristics of NAICS Canada and NAPCS Canada
Characteristics of the classification NAICS Canada NAPCS Canada
Statistical unit (or object classified) Establishments (producers) Products (goods and services)
Classification criteria Similarity of production process(es) Similarity in a physical characteristic, stage of processing, technology, purpose or function
Scope or universe Establishments operating within Canada Products produced in Canada and consumed in Canada or elsewhere, or produced elsewhere and consumed in Canada
Statistical domain Industry statistics (e.g., industrial outputs, and intermediate, labour and capital consumption) Product statistics (e.g., industry outputs and inputs by type, exports and imports by type, price indices)
Examples of analysis supported by related data Changes in industrial structure or productivity over time Total supply and demand, market share analysis, shifts in consumption behaviour

Though different, these systems are complementary in that they provide the underlying classification frameworks for the country's production accounts.

Though it is the case that many products are entirely or mostly produced by one industry, it is not always so. For example, meals are mostly produced and consumed in food services establishments, but are also produced in hotels, cinemas, supermarkets and schools. It is also worth noting that product classifications are used outside the scope of industry statistics; for some uses, knowing the industrial origin of products is neither useful, nor desirable.

Supply and Use Product Classification (SUPC)

In the first section of the introduction, the purpose of NAPCS Canada is described as supporting the integration of product data obtained from multiple sources by organizing the documentation, collection, processing, presentation and analysis of data.

In practice, the source for integrated product data is the Input-Output Account (IO) of the Canadian System of Macroeconomic Accounts (CSMEA). The IO provides the set of definitions, classifications and accounting rules necessary to produce balanced industry and commodity accounts which highlight the sources of supply and demand in the economy. The Supply and Use Product Classification (SUPC) is the basis for the commodity accounts. Making the SUPC an integral part of NAPCS Canada was a necessary condition to achieve the stated objective.

The SUPC has been integrated into NAPCS Canada at the class level (5-digit) where conceptually and practically feasible, and the SUPC has been adapted to conform to NAPCS Canada where possible. There are, however, a small number of conceptual and practical constraints that prevent embedding the SUPC into NAPCS entirely. The most significant differences are conceptual in nature.

The first conceptual difference concerns the scope of the two classifications.

The SUPC includes a number of imputed, non-market, fictive and primary input (e.g., labour and capital) commodities that are out-of-scope for NAPCS. The inclusion of these commodities in the SUPC is required to implement SNA accounting concepts.

NAPCS includes a number of intellectual property products that are out of scope for the SUPC, namely intellectual property produced on own account for sale with all-attendant rights. The inclusion of these commodities in NAPCS results from trilateral agreement. The rationale for inclusion is that these types of intellectual properties are produced by one unit and supplied to another. The data to fully implement this part of the classification are not available.

The second conceptual difference concerns the use of different classification criteria.

In finance and education services in particular, NAPCS Canada uses criteria agreed to in trilateral development work. These criteria are thought to be more representative of the specific services than reflecting the institutional organization delivering the services, as found in the existing classification. To date, the data to fully implement NAPCS are not available. As well some of the NAPCS detail in finance services is not consistent with CSMEA concepts.

Though these differences are real, the goal of integrating the SUPC into NAPCS has largely been achieved. More than 80% of the remaining categories of NAPCS classes coincide with those of SUPC, and the remaining 20% or so are splits or groupings of SUPC categories.

Central Product Classification (CPC)

The CPC is an international standard to classify all goods and services. It is published by the Statistics Division of the Department of Economic and Social Affairs of the United Nations.

The CPC is very similar to NAPCS Canada in concept, purpose and scope. The introduction of the CPC manual describes it as follows:

"The Central Product Classification (CPC) constitutes a complete product classification covering all goods and services. It serves as an international standard for assembling and tabulating all kinds of data requiring product detail, including statistics on industrial production, domestic and foreign commodity trade, international trade in services, balance of payments, consumption and price statistics and other data used within the national accounts. It provides a framework for international comparison and promotes harmonization of various types of statistics related to goods and services."Footnote 6

The similarity extends to the general organization of the classification. Like NAPCS Canada, the CPC is a four level hierarchical classification that contains a similar number of detailed categories.

NAPCS Canada is not fully compatible with the CPC. In order to do so, it would have been necessary for the most detailed categories of NAPCS Canada to coincide with, be grouped or be subset of, the most detailed categories of the CPC. This would have required changes to the national classification not possible at this time.

It is the intent to develop and publish a concordance between the two systems that will assist users in understanding the similarities and differences between them.

Harmonized Commodity Description and Coding System (HS)

The HS is the international standard used by more than 200 countries, including Canada, to classify and measure international merchandise trade. Like NAPCS Canada, the HS is a product-based system, but its universe is limited to transportable goods. These HS goods are mostly covered by groups 111 to 482 of NAPCS Canada.

The HS is a more detailed classification than NAPCS Canada; at its most detailed level (sub-heading or 6-digit), it recognizes more than 5,000 goods. The HS generally classifies detailed goods on the basis of the following attributes: component material, degree or stage of processing, and use or function.

The structure of the HS is different than the structure of NAPCS Canada and no attempt was made to integrate it into NAPCS Canada. Doing so would have made it more difficult to achieve the main objective of NAPCS Canada, that of integrating several Canadian classifications into a single standard classification. That said, the class level (5-digit) of NAPCS Canada is by design a bridge level between various classifications, and the most detailed categories of the HS map well to the class level of NAPCS Canada.Footnote7

Extended Balance of Payments Services Classification (EBOPS) 2010

The EBOPS is the international standard to classify and measure international trade in services. It can be seen as a complement to HS for the classification and measurement of international trade in goods and services.Footnote 8 A version of EBOPS is used in the Canadian Balance of Payments Accounts.

At its highest level, the 2010 version of EBOPS recognizes twelve broad service categories, which are further sub-divided into a small number of detailed categories.

For the most part, the EBOPS is a product based classification system. For those categories that are product based, it is theoretically possible to create a concordance between EBOPS and more detailed product classifications like NAPCS Canada. Such a concordance has already been developed between the Central Product Classification (CPC) of the United Nations and EBOPS,Footnote 9 and the CPC is similar to NAPCS Canada in concept, purpose and scope.

However, there are three broad categories that are defined on the basis of the entity engaged in the trade activity or the mode of consumption, rather than on the basis of the type of service traded. These categories are travel, construction and government goods and services. The use of different classification criteria in these cases makes it difficult to develop a concordance between the classifications systems. This is especially true for the travel category, which includes traveller expenses on a range of goods and services. There is a need for convergence of product classifications of industry and trade for comparative purposes.

Trilateral North American Product Classification System (NAPCS)

The trilateral NAPCS 2017 is a six-level hierarchical structure consisting of 24 sections, 61 subsections, 172 divisions, 276 groups, 497 subgroups, and 1,167 trilateral productsFootnote 10. At this time, the trilateral NAPCS structure is a reference classification system for beta testing. The development of the trilateral version of NAPCSFootnote 11 has had a significant influence on the development of NAPCS Canada.

As part of their common classification development work, the three national statistical agencies reconsidered the traditional approaches in the organization of industry and product classifications. In particular, there were numerous discussions regarding the relevant classification criteria for each type of classification.Footnote 12 In the case of the product classification, the conclusion was that the analytical needs of users of product data would be better served if the aggregation structure emphasized demand-based attributes of products rather than supply-based attributes of products. This is a departure from the existing practice of emphasizing the industry of origin of products, clearly a supply-based attribute. The new structure emphasizes attributes such as the substitutability of products, the complementary nature of products, or the similarity in markets being served by the products.

NAPCS Canada does not embed the new approach. Doing so would have been too disruptive and would have complicated the task of moving from a multi-to-single product classification system. Instead, NAPCS Canada uses a more traditional aggregation structure, more or less based on the industry of origin of products.

That said, the approach adopted for the trilateral NAPCS is a useful exercise. The most detailed categories of NAPCS Canada have been defined so as to permit mapping into the most detailed trilateral categories. This means that the Canadian detailed categories can be re-organized using the trilateral aggregation structure. In effect, the trilateral aggregation structure becomes a regrouping variant of the Canadian aggregation structure, with few exceptions. The availability of data at the most detailed level of NAPCS Canada will continue to influence the extent of the trilateral work.

Summary of changes from NAPCS Canada 2017 Version 1.0 to NAPCS Canada 2017 Version 2.0

NAPCS Canada 2017 Version 2.0 was needed mainly in response to the legalization of cannabis for non-medical use. Other parts of the classification were updated based on specific requests from within Statistics Canada and in consultation with external clients in the case of research and experimental development (see "Decomposition of classification items" below). Some categories were added, others were split, transferred or merged. The Generic Statistical Information Model (GSIM) is used to identify the types of changes made to the classification. Real changes are those affecting the scope of the existing classification items or categories, whether or not accompanied by changes in the title, definition and/or the coding. Virtual changes are those made in coding, titles and/or definitions, while the meaning or scope of the classification item remains the same. The "real changes" are the most important ones for analysis.

A complete list of all changes is released as a separate reference document. The list of changes can also be obtained upon request, in Excel format, from Statistics Canada at: statcan.napcs-consultation-scpan-consultation.statcan@statcan.gc.ca.

Here are some examples of real changes:

Creation of new classification items

Close to 70 classification items or categories were added as "new" in NAPCS Canada 2017 Version 2.0. To introduce new cannabis products into the classification, a number of classification items or categories were created:

  • to cover for agricultural and manufactured cannabis goods (see new group 213 - Cannabis products) and new detail product (see 6814191 - Cannabis products manufacturing services);
  • to cover for wholesale (see new class 55121 - Cannabis products, at wholesale); and
  • to cover for retail sale (see new class 56113 - Cannabis products, at retail).

Also added were a new subclass for "prefabricated plastic and concrete buildings and buildings of other non-wood material, and components thereof" (see code 471112) with its detail level (see code 4711121) and a new detail classification item for "battery chargers for electric automobiles" (see code 4752316).

Combination of classification items

Combinations consist of mergers and take-overs among classification items. Essentially, new groupings were created with the intent to re-arrange the classification of non-residential buildings by adding new classes for commercial buildings (see new class 62212) and institutional buildings (see new class 62213), and realigning existing classification items under these classes.

Decomposition of classification items

About 224 classification items or categories are a result of either a breakdown or a split. The majority of the "real changes" were decompositions. The most important changes, in terms of the number of categories affected is related NAPCS Canada group 642 - Research and experimental development (R&D). In anticipation of a new classification of R&D being developed in partnership between Statistics Canada and Government of Canada's granting agencies and councils,Footnote 13 NAPCS Canada has been revised to align with the Frascati Manual 2015Footnote 14 for the classification of R&D by fields of research. This includes the "broad classification" (6 categories converted into NAPCS Canada 5-digit classes), and "second-level classification" (42 categories converted into NAPCS Canada 6-digit subclasses and 7-digit detailed levels) from the Frascati Manual 2015.

Other examples of decomposition-type changes are related to the addition of more detailed classification items for:

  • maple products (see class 11513);
  • low alcohol beers, wines, ciders and other fermented drinks (see class 19311);
  • other manufactured goods such as:
    • cigar, chewing and smoking tobacco (see group 212);
    • asphalt (see class 26211);
    • aromatic hydrocarbon gases and liquefied refinery gases (see class 26321);
    • other inorganic and organic chemicals (see class 27113);
    • nitric acid, ammonia and ammonium compounds (see class 27211);
    • polyethylene resins (see class 28111); and
    • cement (see class 46511);
  • retail sale, decompositions include:
    • separate classification items covering goods for infants, such as cloth diapers, vestments, costumes and unisex clothing (see class 56121);
    • unmanned aircraft or drones (see class 56152);
    • household heating fuels (see class 56161); and
    • incontinence products (see class 56172);
  • construction, public security facilities were broken down in more details (see class 62233).

Transfer of classification items or their parts

Low alcohol beers, wines, ciders and other fermented drinks were transferred from NAPCS group 211 - Alcoholic beverages to NAPCS group 193 - Carbonated and non-carbonated drinks (including low alcohol fermented drinks), bottled water and ice.

Battery chargers were transferred from NAPCS class 38125 - Other electrical equipment and components to NAPCS class 47523 - Batteries and battery chargers.

Mining buildings were transferred from NAPCS class 62361 - Mining engineering works to NAPCS class 62211 - Industrial buildings, with their own 6-digit subclass 622114 - Mining buildings.

Virtual changes

More than 430 classification items were modified as a result of a virtual change where changes were made to codes, titles and definitions without affecting the scope or meaning of the existing classification items. These types of changes are important for clarification and making necessary updates or corrections. For example, some titles and definitions were modified for agricultural products to ensure the standard classification aligns well with the variant for agriculture goods; the definitions of "unmanned aircraft (drones)" (see classes 42111 and 47532) and "synthetic crude oil" (see class 14113) were revised and the titles and definitions were updated for the types of constructions in NAPCS Canada's groups 471 - Prefabricated buildings and components thereof, 621 - Residential buildings, 622 - Non-residential buildings and 623 - Civil engineering works. The definitions of the types of constructions are similar to those of Eurostat's Classification of types of constructions (1997) and new variables created and recently approved as recommended standards for "building" and "building unit" by Statistics Canada.

Finally, all changes made (real or virtual) can potentially have an impact on the content of the classification index file, which contains inclusions, illustrative examples and exclusions. More than 8,000 inclusions and illustrative examples and more than 800 exclusions have been either added, deleted or edited in this 2.0 version of NAPCS Canada 2017. The classification index file supports coding of products and fosters fluidity when reading or using the classification.

Changes in NAPCS Canada 2017 Version 2.0 relative to NAPCS Canada 2017 Version 1.0

Net count of categories by level
Level NAPCS Canada 2017 Version 2.0 NAPCS Canada 2017 Version 1.0 Added Eliminated Net difference
3-digit level (Group) 158 157 1 0 +1
5-digit level (Class) 512 506 10 4 +6
6-digit level (Subclass) 1,470 1,409 63 2 +61
7-digit level (Detail) 2,893 2,737 156 0 +156
Total 5,033 4,809 230 6 +224

Product data in the Canadian statistical system

Product statistics can be described as those that inform on different aspects of the supply and use of goods and services in the economy, such as the value and quantity of goods and services produced by industries, the value and quantity of goods and services consumed by industries and households, the value and quantity of imports and exports of goods and services, and price changes at different points in the distribution chain. These statistics are collected by various surveys or obtained from administrative sources, and integrated into the country's economic accounts.

Product statistics are ubiquitous in the statistical system. The few examples below are by no means exhaustive; the purpose is to provide the reader a sense of the variety of statistical programs collecting and producing such statistics, and identify those that are using NAPCS Canada or are planning to do so at the time of publishing NAPCS Canada 2017.

Statistics Canada's business and trade statistics programs are the main sources of product statistics. They administer hundreds of monthly, quarterly, annual and ad hoc programs, most of which collect product data.

Among these many programs are so-called industry surveys; they are designed to measure the contribution of specific industries to the Canadian economy. Industry surveys typically collect data on the revenues, expenses and employment characteristics of establishments, and the revenue and expense components of these surveys generally gather data by type of goods or services produced and used. The majority of industry surveys are part of the agency's Integrated Business Statistics Program (IBSP) and use, or plan to use, NAPCS to classify revenues by type of goods or services produced. The following are a few examples of surveys that fall in this broad category:

  • The Annual Survey of Manufacturing and Logging Industries (2103)
  • The Annual Wholesale Trade Survey (2445)
  • Annual Survey of Service Industries: Software Development and Computer Services (2410)
  • Annual Survey of Service Industries: Amusement and Recreation (2425)

The business and trade statistics programs also comprise several programs designed specifically to gather product data. Two of these programs are large in scope and based on NAPCS, albeit in very different ways:

  • The Retail Commodity Survey (2008)
  • Canadian International Merchandise Trade (2201 and 2202)

The retail commodity survey collects data on retail sales for more than 100 categories of commodities from Canadian retailers. The classification of commodities used for collection is compatible with NAPCS.

The Canadian international merchandise trade program is based primarily on administrative data obtained from the Canadian Border Services Agency (CBSA) and the U.S. Customs Border Protection (via the U.S. Census Bureau). By virtue of an international agreement, the coding of Canadian exports and imports must be based on the Harmonized Commodity Description and Coding System (HS) maintained by the World Customs Organization (WCO). The relationship between the HS and NAPCS is defined by concordances; a more detailed description of this approach is provided in the section titled "The methods for implementing the classification".

In addition to the retail commodity survey and the Canadian international merchandise trade statistics program, business and trade statistics programs include several surveys that collect data (value and/or quantity) on the production, disposition, consumption or sales of specific goods. Though these surveys were not designed on the basis of NAPCS, they often are NAPCS compatible, at least in part. The following are a few examples of surveys that fall in this category:

  • Fruits and Vegetables Survey (3407)
  • Maple Products (3414)
  • Monthly Refined Petroleum Products (2150)
  • Crude Oil and Natural Gas (2198)
  • Annual Industrial Consumption of Energy Survey (5047)

Price indices are core product statistics. Statistics Canada tracks the movements of prices in a variety of markets with more than thirty statistical programs. Three major price programs have adopted NAPCS to produce their indices:

  • Industrial Product Price Index Program (IPPI) (2318). The IPPI measures price changes at the factory gate for commodities sold by manufacturers in Canada.
  • Raw Material Price Index Program (RMPI) (2306). The RMPI measures price changes for raw materials purchased by industries in Canada for further processing.
  • International Merchandise Trade Price Index (IMTPI) (2203). The IMTPI measures price changes for imported and exported goods.

The remaining price programs, including the Consumer Price Index (CPI), use program specific classifications not based on NAPCS, though some are NAPCS compatible.

The business and trade statistics programs also comprise a number of programs that do not, strictly speaking, measure an aspect of the supply and use of goods and services, but that do have a product dimension. The two best known ones are:

  • Annual Survey of Research and Development in Canadian Industry (RDCI) (4201)
  • Annual Capital and Repair Expenditures Survey (CAPEX) (2803)

Though NAPCS Canada was not primarily designed for this type of application, it is possible in some instances to develop NAPCS compatible classifications for use in such programs. For instance, the component of the RDCI that measures research and development expenditures by field of science is compatible with NAPCS, as is the component of the CAPEX that measures capital expenditures on non-residential construction.

While product statistics are common in business and trade statistics programs, they are rare in household statistics programs. The one major exception is the Survey of Household Spending (3508). It collects household expenditures on the basis of a detailed survey specific classification that was designed prior to the introduction of NAPCS.

The various product statistics described above are of interest by themselves, but their full analytical value resides in their integration into a coherent accounting framework. That is the role of the Canadian System of National Accounts (CSNA).

The CSNA has several accounts designed to "measure activities associated with the production of goods and services, the sales of goods and services in final markets, the supporting financial transactions, and the resulting wealth positions."Footnote 15 Among these, the input-output accounts provide the framework to integrate product statistics from a variety of sources into a system that describes the supply and use of goods, services and production factors in our economy. The supply and use product classification (SUPC)Footnote 16 underlies that framework; several versions have been developed over time. In order to achieve the objective of improving the coherence of product-level data in the Canadian statistical system, the SUPC has been incorporated into NAPCS Canada where feasible, starting with the 2009 version of the SUPC. It is the intent to maintain this integration in the future.

There are a number of conceptual and practical constraints that prevent embedding the SUPC into NAPCS entirely. That said, the integration of the classifications used for the collection and assembly of product data and the classification used to create input-output tables in a single classification is a key feature of NAPCS Canada, the feature that will contribute most to improving coherence.

The development of NAPCS Canada was a progress of process done over a period of time. The next section provides an overview of its development and implementation history.

The methods for implementing the classification

There are three main methods for implementing NAPCS Canada: by integrating the relevant components of the classification in survey instruments, by coding on the basis of descriptions supplied by respondents, and by forced concordances.

The integration of the classification in survey instruments is a method commonly used in industry surveys to collect revenue by type of good or service produced (sold) as well as in surveys dedicated to the collection of commodity data. Since these two types of surveys target homogeneous populations, it is possible to identify the relevant components of NAPCS at the time of their design. For example, a survey targeting accounting firms would embed the products of NAPCS classes 77121 - Accounting, tax preparation, bookkeeping and payroll services and 77511 - Management consulting services since the products of these classes represent the most likely sources of revenues of these firms. For the same reason, a survey targeting retailers would embed the products of NAPCS group 561 - Retail services (except commissions) and selected products from groups 571 - Repair and maintenance services (except for buildings and motor vehicles) and 581 - Rental and leasing (except rental of real estate).

This is the most commonly used method for implementing NAPCS. The main challenge with this method is to develop reporting guides that support a consistent interpretation of the classification by respondents.

Coding on the basis of descriptions supplied by respondents is very common for industry and occupation statistics, but not so for product statistics. This is very much a function of the source of information for coding.

Industry coding is largely based on business activity descriptions from administrative records and occupation coding is largely based on descriptions supplied by individuals participating in broad scope surveys such as the Labour Force Survey or the Census of Population. In both cases, the coding exercise requires choosing among all the available codes of the relevant classification. In the product statistics domain, coding is mostly done by respondents to industry and commodity surveys; coding based on descriptions supplied by respondents is generally restricted to unallocated revenues in those surveys.

Automated and computer assisted coding are commonly used for this type of coding exercise. It consists of comparing respondents' supplied descriptions to a bank of coded descriptions. The main challenge with this method is to obtain sufficiently rich information from respondents to assign codes at the most detailed level of the classification.

As discussed earlier, the implementation of NAPCS Canada in the international merchandise trade statistics program is achieved by forced concordances. Each of the most detailed categories the Canadian Export Classification (CEC) and the Customs Tariff (CT) is linked to one of the five-digit classes of the standard classification. The CEC and CT are derived from the Harmonized Commodity Description and Coding System (HS), the mandatory classification for the coding and declaration of goods imported into Canada or exported from Canada.

The forced concordance approach is only viable if the systems being linked are based on similar concepts and are sufficiently comparable. The HS and NAPCS have been developed independently to serve different purposes and not always compatible. That said, because the concordances are done at the relatively aggregated class level of NAPCS, most of the inconsistencies between the HS based systems and NAPCS are eliminated.

At the time of publishing NAPCS Canada 2017 Version 2.0, this was the only application of the forced concordance method.

Notes

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Impacts on Statistics Canada travel and tourism data resulting from replacement of E311 declaration cards with Primary Inspection Kiosks

Prepared by Tourism and Centre for Education Statistics Division and Household Survey Methods Division, Statistics Canada

Version 1.0

September 10, 2018

Introduction

Data for Statistics Canada's Frontier Counts (FC) program are produced using administrative data received from the Canada Border Services Agency (CBSA) on all international travellers who have been cleared for entry or re-entry into Canada. This includes residents of Canada, the United States and overseas entering Canada from abroad.

In March 2017, the CBSA began introducing the electronic Primary Inspection Kiosk (PIK) system at major airports in Canada to collect information from commercial air travellers arriving in Canada. In the airports where it is deployed, the PIK system replaces the paper E311 Declaration Cards that are completed by international travellers to Canada and submitted to airport border services officers upon arrival in Canada.

This guide is intended for users of travel and tourism data. It provides an overview of how the change in data collection, with PIK replacing E311 cards, has resulted in changes to individual travel statistics. It contains information on how to use and interpret the PIK-based data as well as how to compare the current data with historical data that were based on the E311 cards.

Definitions and concepts

Data collection and processing

Overall, the paper E311 cards and electronic PIK represent different means of collecting a similar set of information on international travellers entering Canada by air.

The E311 cards are normally distributed in-flight to travellers arriving in Canada, who complete the form before submitting them to airport border services officers. In comparison, travellers reporting using PIK do so upon arrival in Canada at the touch-screen kiosks in the airport before proceeding to border services officers. Some travellers make use of CBSA's eDeclaration mobile app that allows them to prepare declaration information in advance and load it when arriving at the kiosks, but these currently represent a small minority. Whether using the kiosk or the eDeclaration app, travellers who report using PIK follow instructions on a series of screens to input their information.

All completed E311 cards are forwarded to Statistics Canada for processing, data capture, and quality evaluation. Given the high number of cards received on a yearly basis prior to PIK (more than 22 million) and resource and time constraints, a sample design was developed for processing the cards and arriving at estimates of international traveller counts. For PIK, electronic data files representing all completed PIK declarations are forwarded to Statistics Canada, therefore no sampling of PIK data files is required.

Data on international travellers received from CBSA, including both E311 cards and PIK, are distributed by Statistics Canada into categories of flows which are:

  • Canadian residents returning to Canada from the United States,
  • Canadian residents returning to Canada from countries other than the United States (direct or via the United States),
  • United States residents entering Canada,
  • Residents of countries other than the United States entering Canada (direct or via the United States), and
  • "Other" travellers, which consist of a) foreign and resident crew members, and b) diplomats, military personnel, immigrants and former residents.

As with other administrative data received from CBSA, the E311 and PIK data are verified, validated, and integrated into the Frontier Counts system. Several edits and verifications are performed, E311 cards are weighted where a sampling design was conducted, and estimates are produced for each port of entry by combining these data with other sources covering the target population of international travellers (E63, NEXUS, CANPASS) at the airports.

For more information regarding Frontier Counts data sources and methodology, please consult the Definitions, data sources and methods, 5005 – Frontier Counts.

Deployment of PIK

The following is a list of the 19 airports from which Statistics Canada has been receiving and processing E311 Declaration Cards and, where applicable, the dates when PIK was deployed.

  • Gander
  • St. John's
  • Halifax (PIK deployed October 24, 2017)
  • Québec City (PIK deployed December 11, 2017)
  • Montréal (PIK deployment started November 7, 2017)
  • Mirabel
  • Mont-Tremblant
  • Ottawa (PIK deployed March 17, 2017)
  • London
  • Toronto Terminal 1 (PIK deployment forthcoming)
  • Toronto Terminal 3 (PIK deployed June 21, 2017)
  • Toronto Island (PIK deployed May 8, 2018)
  • Winnipeg (PIK deployed June 12, 2018)
  • Saskatoon
  • Regina
  • Edmonton (PIK deployed September 12, 2017)
  • Calgary (PIK deployment forthcoming)
  • Vancouver (PIK deployed April 19, 2017)
  • Victoria

Sources of difference between E311- and PIK-based results

Between alternate methods of collecting data to measure a given subject, differences in the nature and accuracy of data can result from a variety of reasons, many of which apply to the switch from paper E311 cards to electronic PIK kiosks. There are two sets of sources for these differences. First, they can originate from changes in wording or concept, changes in the format of the questions or the questionnaire (e.g., paper vs electronic), changes in who is reporting the information, and changes in interpretation on the part of the respondent. Second, differences can originate from changes in sample design, coverage and accuracy of data processing.

This document focuses on the changes to individual concepts measured by the Frontier Counts that originate from the first set of sources. With regards to sample design, where the census of PIK information replaces samples of E311 cards, the resulting PIK-based data will necessarily be more statistically accurate. However, due to high sampling proportions, E311-based estimates were already accurate, with coefficients of variation (CV) varying from less than 1% to 5%. Similarly, data processing methods are not expected to be an important source of difference between E311 and PIK. The degree of processing error associated with E311 cards is assumed to be negligible given the safeguards and analyses that are already in place, while a similar or greater degree of processing accuracy is assumed to exist with PIK data, as there is no processing required to capture and convert it into electronic form.

Coverage error, however, is recognized as an overall source of difference between E311-based estimates and PIK-based counts. Prior to the deployment of PIK, coverage error associated with E311 cards was considered to be insignificant because travellers were obligated to hand in their E311 cards/printouts to Canada Border Services Agency (CBSA) officers. Since the start of PIK, CBSA has identified that some travellers at PIK airports may bypass both PIK and E311 (unaccompanied minors, travellers with a non-machine-readable travel document, foreign representatives and their families, travellers who arrive during a kiosk outage) and make their declarations directly to border services officers. These declarations are not currently recorded, however CBSA estimates the total amounts to be in the range of one to two percent or less. Statistics Canada is currently working with CBSA to account for travellers who undergo this form of in-person processing.

Response error occurs when a respondent reports an incorrect response, often from misunderstanding the question being asked. Changes in respondent behaviour are known to occur when the mode of collection changes, such as from a paper to an electronic format in the case of E311 to PIK. Indeed, comparison of data from the E311 cards and the PIK indicates that there are changes in the degree of response error in certain categories of travel questions. These changes in response error occurred because of the differences in question format and wording, and whether the information was provided by the traveller, the border services officer or another administrative source. The degree of response error associated with E311 cards and PIK cannot be calculated.

With the change from E311 to PIK there is also an important change in the environment in which the traveller completes the declaration as well as the change in data collection mode. In general, travellers completing their E311 cards during their flight can be assumed to have more time to read and consider the questions than travellers at an airport PIK kiosk who are wanting to advance to the border services officers, possibly with line-ups of people waiting behind them.

The main highlights of this assessment are presented below.

Response error

Arriving from

Both E311 cards and PIK require the travellers to declare where they are arriving from using the following response categories (presented in order):

  • U.S. only
  • Other country direct
  • Other country via U.S.

Results of this question are important primarily for identifying the proper category of 'flow' for returning Canadian travellers and visiting overseas travellers. For Canadian travellers it allows Statistics Canada to distinguish between those who are returning from the United States and those who are returning from a trip to another country – either direct or after transiting in the United States. Travellers from overseas countries entering Canada by air are also disaggregated by whether they arrived direct or via the United States. For all travellers, whether they are residents of Canada, United States or overseas countries is determined by their response to the Country of residence question, and not by the Arriving from question.

The Arriving from question is known to be unclear for certain flows of travellers. Some overseas residents who enter Canada following a flight from the United States after a visit in the United States are unsure whether to select 'U.S. only' or 'Other country via U.S.', particularly if they were travelling in the United States as well. Canadian residents who return from overseas trips on flights from the United States also have a tendency to select 'U.S. only' when they should be selecting 'Other country via U.S.' A frequent correction seen on E311 cards was for the first category to be scratched out and the third category selected.

For overseas travellers, a mistaken selection of the first category instead of the third is inconsequential, as both will be recorded as 'Residents of countries other than United States entering Canada by air via the United States.' However, for Canadian travellers, the mistake results in overreporting of 'Canadian residents returning from the United States' and underreporting of 'Canadian residents returning from countries other than the United States.'

Analysis of the PIK-based versus E311-based results indicates that there has been an increase in the number of Canadian residents who reported returning from the United States when reporting using PIK, and a consequent decrease in the numbers who reported returning from countries other than the United States. The assumption is that travellers who are reporting on E311 forms in-flight are generally under less pressure to complete the form than travellers standing at a PIK kiosk who must complete this step before proceeding to border services officers, and possibly with a line-up of travellers behind them. The E311 travellers are therefore more likely to read and consider all three response categories before making a selection. Furthermore, the categories on the E311 card that are presented vertically are also closer together than the horizontally-presented buttons on the PIK screen, suggesting greater possibility of the third category being overlooked before the traveller hits the 'Continue' button to advance to the next screen. As a result, Canadian travellers returning from an overseas trip via the United States and reporting at a PIK kiosk will be more likely to select the first entry that appears to apply to their situation, and less likely to see or consider the category 'Other country via U.S.'

As a result of this change in respondent behaviour, users are advised to use caution when comparing 2018 PIK-based numbers of Canadians travelling to the United States or overseas with similar E311-based figures from previous years. Direct comparisons of the amount of increase or decrease between the two time periods are not advised.

Country of Residence

On E311 cards, international travellers arriving in Canada by air are asked to self-report their home address, including city/town, province/state if applicable, and country of residence. With PIK, international travellers are asked a less-detailed set of information on their place of residence. First, travellers are presented a screen titled 'Residency' with the categories 'Canada', 'U.S.' or 'Other'. Based on their selection, one of three additional screens will appear: (1) a screen for Canadian residents to report their province or territory of residence, (2) a screen for US travellers to select their state of residence, or (3) a screen for overseas travellers to declare their country of residence. In all three cases, travellers select their entry from a drop-down list; travellers cannot type in their selection. For overseas travellers, the list of countries presented corresponds to the 'Nationality' element of the International Civil Aviation Organization (ICAO) 9303 compliant travel document. The language of the list varies depending on the language the user selected to complete the PIK session, with up to 15 language options at some airports.

With E311 cards, the country of residence is coded by Statistics Canada according to the set of countries that represent the most disaggregated dissemination categories. For E311 cards that were received for flights arriving after January 1, 2018, the list of countries corresponds to Statistics Canada's Standard Classification of Countries and Areas of Interest (SCCAI 2016). For the small number of responses that are insufficiently specific (e.g., 'Caribbean'), these are imputed based on citizenship, where possible. Other specific routines were developed to handle some commonly occurring situations. For example, responses similar to 'France – St. Pierre and Miquelon' or 'France (Guadeloupe)' would be coded to St. Pierre and Miquelon and Guadeloupe, respectively.

Based on analyses of PIK-based results with historical trends, the data from PIK appear to be comparable with E311-based figures on major source countries of travellers to Canada (with the possible exception of Taiwan). Noted differences in data patterns between PIK and E31 involve mainly smaller source countries – particularly territories associated with other countries – and suggest a number of possible reasons:

  • French territories – there have been noticeable decreases in the numbers of arrivals from St. Pierre and Miquelon, Guadeloupe, Martinique, Réunion. As noted above, respondents who provided both pieces of information on E311 cards would be coded to the more detailed level. With the long drop-down list provided in PIK, respondents who may have provided more detail in the past were content to select the broader response category that travellers were certain would appear, or that appeared higher on the list, saving them additional time spent scrolling.
  • US territories – there have been increases in numbers of arrivals from Puerto Rico, American Samoa, the US Virgin Islands and Guam. The hypothesis is that many border services officers reviewing E311 cards from these travellers select a box on the E311 card for CBSA use only which indicates that the travellers were US visitors. This box is used by Statistics Canada in E311 processing to identify fields to capture. Since these cards would be identified as having been completed by US travellers, their responses to country of residence on the card would be neither captured nor reviewed.
  • Change in classification system – the more detailed list of countries used since January 1, 2018 (SCCAI 2016) to accommodate PIK has resulted in some new categories being created (e.g., Sint Maarten, Curaçao) and the elimination of other aggregated categories (e.g., Dutch West Indies) formerly used by the Frontier Counts.
  • Other territories – other territories and areas associated with larger countries (such as Macao) have seen changes in response that may be partly attributed to differences in reporting behaviour between a write-in field and a drop-down list in the degree of detail that is reported.

Apart from the cases identified above, results from E311 and PIK are considered comparable for counts of travellers from overseas countries.

Immigrants and Other Travellers

There is a difference in the manner in which immigrants are recorded between E311 Declaration cards and PIK, which has led to significant overreporting of the numbers of immigrants from PIK-based estimates.

With E311 Declaration Cards, a traveller does not self-report as having arrived in Canada with the intention of immigrating; this identification is made in the CBSA-only portion of the card by the border services officer once the traveller is questioned during primary or secondary inspection. The categories of Purpose of Trip available to the traveller on the E311 are restricted to study, personal and business.

In PIK, however, it is the traveller who self-reports as intending to immigrate by selecting 'immigrate' from the following Purpose of trip categories: visit/in-transit, study, work and immigrate. Selecting 'immigrate' in PIK leads to questioning by the border services officer following submission of the on-screen declaration. In cases where the border services officer concludes that the traveller has misunderstood the question or its intended purpose and selected 'immigrate' in error, this value is not corrected by the officer in the PIK database.

This change in question format has resulted in overreporting of immigrants arriving at PIK airports in the months of January to May 2018 compared with the same reference months of previous years. Users are advised to not rely on Frontier Counts figures of immigrants arriving at PIK airports since the deployment of PIK.

Crew

With the switch from E311 to PIK, there have been increased numbers of flight crew members reported. Counts of the more numerous Canadian crew members have increased the most in terms of numbers but, as a percent increase, the change has been greatest for crews from countries other than Canada or the United States.

With E311 cards, the identification as a member of the crew of the aircraft is made by a border services officer in the CBSA-only portion of the card. With PIK, a crew identifier flag is automatically applied in the PIK database for members of the crew. The flight manifest submitted to CBSA by the airline provides the source of the crew members' names.

A hypothesis to explain the increase in crew members from countries other than Canada or the United States is that long-haul flights that may have employees work in shifts during the flight, or that off-duty airline employees may be flying to a destination to work a flight originating from that destination. With E311, crew members who are off duty at the end of a flight may be in plainclothes and not appear as crew to border services officers. As a result, the officers would be less likely to identify them as crew members on the E311. In comparison, the flight manifest submitted by the airline company may record all airline staff on the flight. Further investigation is required to confirm or disprove this hypothesis.

Calibration Groups for the Visitor Travel Survey

Table 1
Calibration Groups for American Visitors
Mode Number of groups
Automobile, same day 23
Automobile, overnight 29
Plane commercial 14
Plane private, same day 11
Plane private, overnight 11
Bus, same day 9
Bus, overnight 9
Train 8
Boat commercial 9
Boat private, same day 11
Boat private, overnight 11
Other methods 9
Total 154
Table 2
Calibration Groups for Overseas Visitors
Mode Number of groups
Directly from Overseas 27
Via the United States by land 27
Via the United States by other modes 27
Total 81

National Travel Survey: C.V.s for Visit-Expenditures by Duration of Visit, Main Trip Purpose and Country or Region of Expenditures, Q1 2018

C.V.s for Visit-Expenditures by Duration of Visit, Main Trip Purpose and Country or Region of Expenditures, Q1 2018 in Thousands of Dollars (x 1,000)
Table summary
This table displays the results of C.V.s for Visit-Expenditures by Duration of Visit, Main Trip Purpose and Country or Region of Expenditures. The information is grouped by Duration of trip (appearing as row headers), Main Trip Purpose, Country or Region of Expenditures (Total, Canada, United States, Overseas) calculated using Visit-Expenditures in Thousands of Dollars (x 1,000) and c.v. as units of measure (appearing as column headers).
Duration of Visit Main Trip Purpose Country or Region of Expenditures
Total Canada United States Overseas
$ '000 C.V. $ '000 C.V. $ '000 C.V. $ '000 C.V.
Total Duration Total Main Trip Purpose 19,096,748 A 8,222,912 A 5,325,440 A 5,548,397 A
Holiday, leisure or recreation 11,041,599 A 3,192,885 A 3,800,935 A 4,047,779 A
Visit friends or relatives 3,760,031 A 2,299,837 A 524,808 B 935,386 B
Personal conference, convention or trade show 256,055 B 176,464 B 65,056 C 14,535 E
Shopping, non-routine 630,477 B 480,839 B 147,089 B 2,549 E
Other personal reasons 737,267 B 541,742 B 76,870 D 118,655 D
Business conference, convention or trade show 1,129,782 B 569,223 B 397,199 B 163,360 C
Other business 1,541,538 B 961,923 B 313,483 B 266,133 C
Same-Day Total Main Trip Purpose 3,215,346 A 2,870,169 A 329,932 B 15,245 D
Holiday, leisure or recreation 1,140,641 B 961,165 B 164,563 C 14,913 D
Visit friends or relatives 820,486 B 791,662 B 28,822 C 2 E
Personal conference, convention or trade show 82,850 D 77,940 D 4,910 E .. ..
Shopping, non-routine 486,799 B 393,940 B 92,858 B .. ..
Other personal reasons 288,618 B 275,832 B 12,515 E 270 E
Business conference, convention or trade show 99,456 C 91,448 C 8,008 E .. ..
Other business 296,497 B 278,182 B 18,255 D 60 E
Overnight Total Main Trip Purpose 15,881,402 A 5,352,742 A 4,995,509 A 5,533,151 A
Holiday, leisure or recreation 9,900,958 A 2,231,720 A 3,636,372 A 4,032,866 A
Visit friends or relatives 2,939,545 A 1,508,175 A 495,986 B 935,384 B
Personal conference, convention or trade show 173,205 B 98,524 B 60,146 C 14,535 E
Shopping, non-routine 143,678 C 86,898 C 54,231 C 2,549 E
Other personal reasons 448,649 B 265,909 B 64,355 D 118,385 D
Business conference, convention or trade show 1,030,326 B 477,775 B 389,191 B 163,360 C
Other business 1,245,041 B 683,741 B 295,228 B 266,073 C
..
data not available

Estimates contained in this table have been assigned a letter to indicate their coefficient of variation (c.v.) (expressed as a percentage). The letter grades represent the following coefficients of variation:

A
c.v. between or equal to 0.00% and 5.00% and means Excellent.
B
c.v. between or equal to 5.01% and 15.00% and means Very good.
C
c.v. between or equal to 15.01% and 25.00% and means Good.
D
c.v. between or equal to 25.01% and 35.00% and means Acceptable.
E
c.v. greater than 35.00% and means Use with caution.

National Travel Survey: C.V.s for Person-Trips by Duration of Trip, Main Trip Purpose and Country or Region of Trip Destination, Q1 2018

C.V.s for Person-Trips by Duration of Trip, Main Trip Purpose and Country or Region of Trip , Q1 2018
Table summary
This table displays the results of C.V.s for Person-Trips by Duration of Trip, Main Trip Purpose and Country or Region of Trip Destination. The information is grouped by Duration of trip (appearing as row headers), Main Trip Purpose, Country or Region of Trip Destination (Total, Canada, United States, Overseas) calculated using Person-Trips in Thousands (× 1,000) and C.V. as a units of measure (appearing as column headers).
Duration of Trip Main Trip Purpose Country or Region of Trip Destination
Total Canada United States Overseas
Person-Trips (× 1,000) C.V. Person-Trips (× 1,000) C.V. Person-Trips (× 1,000) C.V. Person-Trips (× 1,000) C.V.
Total Duration Total Main Trip Purpose 65,796 A 56,320 A 6,174 A 3,302 A
Holiday, leisure or recreation 21,307 A 16,015 A 2,977 A 2,315 A
Visit friends or relatives 26,930 A 25,072 A 1,179 B 679 B
Personal conference, convention or trade show 1,065 B 953 B 103 C 8 E
Shopping, non-routine 4,208 A 3,250 A 954 B 5 E
Other personal reasons 4,798 A 4,509 B 194 C 95 D
Business conference, convention or trade show 2,216 B 1,824 B 309 B 83 C
Other business 5,272 B 4,697 B 458 B 117 C
Same-Day Total Main Trip Purpose 41,676 A 39,132 A 2,544 A .. ..
Holiday, leisure or recreation 11,582 A 10,693 A 889 B .. ..
Visit friends or relatives 16,972 A 16,586 A 386 B .. ..
Personal conference, convention or trade show 683 B 641 B 42 E .. ..
Shopping, non-routine 3,945 A 3,076 A 869 B .. ..
Other personal reasons 3,805 B 3,685 B 120 C .. ..
Business conference, convention or trade show 989 C 960 C 30 D .. ..
Other business 3,700 B 3,491 B 209 C .. ..
Overnight Total Main Trip Purpose 24,120 A 17,188 A 3,630 A 3,302 A
Holiday, leisure or recreation 9,725 A 5,322 A 2,088 A 2,315 A
Visit friends or relatives 9,958 A 8,486 A 793 B 679 B
Personal conference, convention or trade show 382 B 312 B 62 C 8 E
Shopping, non-routine 263 B 174 C 85 C 5 E
Other personal reasons 993 B 824 B 74 C 95 D
Business conference, convention or trade show 1,227 B 864 B 280 B 83 C
Other business 1,572 B 1,206 B 249 B 117 C
..
data not available

Estimates contained in this table have been assigned a letter to indicate their coefficient of variation (c.v.) (expressed as a percentage). The letter grades represent the following coefficients of variation:

A
c.v. between or equal to 0.00% and 5.00% and means Excellent.
B
c.v. between or equal to 5.01% and 15.00% and means Very good.
C
c.v. between or equal to 15.01% and 25.00% and means Good.
D
c.v. between or equal to 25.01% and 35.00% and means Acceptable.
E
c.v. greater than 35.00% and means Use with caution.

North American Product Classification System (NAPCS) Canada 2017 Version 2.0

Release date: October 11, 2018 Updated: April 12, 2019

What We Heard Report, NAPCS Canada 2022 Consultation April 20, 2021

Status

This standard was approved as a departmental standard on October 16, 2017.

NAPCS Canada 2017 Version 2.0

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CSV Format

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Concordances

Variants of NAPCS Canada 2017 Version 2.0

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Concordance: North American Industry Classification System (NAICS) Canada 2017 Version 3.0 to North American Industry Classification System (NAICS) Canada 2017 Version 2.0

The concordance table presented here shows the relationship between NAICS Canada 2017 Version 3.0 (first three columns: NAICS 2017 Version 3.0 Code, NAICS 2017 Version 3.0 Title, Status Code) and NAICS Canada 2017 Version 2.0 (next three columns: Part of NAICS 2017 Version 2.0 Class, NAICS 2017 Version 2.0 Code, NAICS 2017 Version 2.0 Title) only for those areas of the classification which have changed in terms of structure and content.

R - NAICS 2017 Version 2.0 code reused but with different content; N - new NAICS class for 2017 Version 3.0

Concordance: North American Industry Classification System (NAICS) Canada 2017 Version 3.0 to North American Industry Classification System (NAICS) Canada 2017 Version 2.0
NAICS 2017 Version 3.0 Code NAICS 2017 Version 3.0 Title Status Code Part of NAICS 2017 Version 2.0 Class NAICS 2017 Version 2.0 Code NAICS 2017 Version 2.0 Title Explanatory Notes
111412 Cannabis grown under cover N Yes 111419 Other food crops grown under cover Marijuana, grown under cover example is now a legalized industry
111419 Other food crops grown under cover R Yes 111419 Other food crops grown under cover Except cannabis grown under cover
111995 Cannabis grown in open fields N No Not applicable Not applicable Cannabis legalized in October 2018
312310 Cannabis product manufacturing N No Not applicable Not applicable Cannabis legalized in October 2018
413410 Cannabis merchant wholesalers N No Not applicable Not applicable Cannabis legalized in October 2018
419110 Business-to-business electronic markets R No 419110 Business-to-business electronic markets Cannabis legalized in October 2018, example of Cannabis products, business to business (B2B) electronic markets, wholesale has been added
419120 Wholesale trade agents and brokers R No 419120 Wholesale trade agents and brokers Cannabis legalized in October 2018, example of Cannabis products wholesale trade agents and brokers has been added
453993 Cannabis stores N No Not applicable Not applicable Cannabis legalized in October 2018

Sampling Methodology Updates to the Industrial Consumption of Energy Survey

I. Introduction

As part of a corporate initiative to improve data coherence across the economic survey program, the annual industrial consumption of energy survey (ICE) has been incorporated into the new economic survey model, which is called the Integrated Business Statistics Program (IBSP).Note1

This report has two main objectives. The first is to inform ICE data users and other program stakeholders of the sampling changes that have been implemented to date as part of the transition to the IBSP. These changes will take effect when data for the reference year 2014 are released, in November 2015. The second objective is to provide context on how the program changes will impact data outputs.

The document is organized into three parts. Following the introduction, Part II highlights the key methodological changes resulting from the integration of the ICE survey into the IBSP framework and expected impacts on the data. Part III presents the conclusions.

II. Sampling methodological changes to the ICE survey under the IBSP

The IBSP provides a common survey framework for the various business surveys conducted at Statistics Canada. The integration of the ICE survey into the IBSP framework, which started with the reference year 2014 cycle, resulted in the following changes to the sampling methodology.

  1. Sampling Unit

Prior to reference year 2014, the sampling unit for the ICE survey was based on the business establishment.  As the IBSP adopts the business enterprise as the sampling unit, the sampling methodology for the ICE survey was updated towards using the enterprise as the sampling unit.

In this new scheme, when an enterprise is selected as in-scope for the ICE survey sample, all the in-scope establishments under that enterprise will be included in the sample. Given that the majority of ICE sample units represent the so-called simple single businesses consisting of a single business establishment, the impact of this change is not very significant. As of reference year 2018 the sampling unit is the establishment.

  1. Random sampling method.

The IBSP uses the Bernouilli sampling method, while a simple random sampling method (SRS) was used for the ICE survey, before reference year 2014.

The major difference introduced by this new method is that, within each sampling stratum, the sample size is no longer a predetermined number. Given the fairly large overall sample size and the mini-censuses in many strata of the ICE survey, the general impact is not expected to be significant.

  1. Change of stratification method.

The previous Lavallée-Hidiroglou stratification algorithm used by the ICE survey has now been replaced by a general geometric stratification. This may lead to minor differences in calculating boundaries between sample strata. Overall, the general impact on the data is not expected to be significant.

In addition to the changes identified above, Statistics Canada’s Business Register, which provides the population frame for the ICE survey, is updated on a regular basis. These continuous improvements may impact the ICE survey from time to time. For instance, the determination of annual business revenue for each company/enterprise is currently being modified. Given the important role played by business revenue in the sampling process, this will result in some changes to the ICE survey sample.

The IBSP methodological and analytical approaches take into account core IBSP objectives, including reducing response burden, maintaining data quality, and maximizing the use of administrative data.

III. Conclusion

The change in methodology over the years may result in some data variability from previous years in non census industries. For example, establishments belonging to the same enterprise may have a stronger tendency to consume similar energy products. This is not expected to have a large impact as many of the ICE sample units are simple single businesses where there is only one establishment per enterprise. Revenue updates in the BR and possible boundary changes to the strata may also result in minor data changes for the non census industries.

Notes

  1. For additional information, please see the Integrated Business Statistics Program Overview (68-515-X)

Concordance: North American Industry Classification System (NAICS) Canada 2017 Version 2.0 to North American Industry Classification System (NAICS) Canada 2017 Version 3.0

The concordance table presented here shows the relationship between NAICS Canada 2017 Version 2.0 (first three columns: NAICS 2017 Version 2.0 Code, NAICS 2017 Version 2.0 Title, Status Code) and NAICS Canada 2017 Version 3.0 (next three columns: Part of NAICS 2017 Version 3.0 Class, NAICS 2017 Version 3.0 Code, NAICS 2017 Version 3.0 Title) only for those areas of the classification which have changed in terms of structure and content.

R - NAICS 2017 Version 2.0 code reused, but with different content; NU - NAICS 2017 Version 2.0 code not reused

Concordance: North American Industry Classification System (NAICS) Canada 2017 Version 2.0 to North American Industry Classification System (NAICS) Canada 2017 Version 3.0
NAICS 2017 Version 2.0 Code NAICS 2017 Version 2.0 Title Status Code Part of NAICS 2017 Version 3.0 Class NAICS 2017 Version 3.0 Code NAICS 2017 Version 3.0 Title Explanatory Notes
111419 Other food crops grown under cover R Yes 111419 Other food crops grown under cover Except cannabis grown under cover
  Yes 111412 Cannabis grown under cover Marijuana grown under cover is now a legalized industry
Not applicable Not applicable   No 111995 Cannabis grown in open fields Cannabis legalized in October 2018
Not applicable Not applicable   No 312310 Cannabis product manufacturing Cannabis legalized in October 2018
Not applicable Not applicable   No 413410 Cannabis merchant wholesalers Cannabis legalized in October 2018
419110 Business-to-business electronic markets R Yes 419110 Business-to-business electronic markets Cannabis legalized in October 2018, example of Cannabis products, business to business (B2B) electronic markets, wholesale has been added
419120 Wholesale trade agents and brokers R No 419120 Wholesale trade agents and brokers Cannabis legalized in October 2018, example of Cannabis products wholesale trade agents and brokers has been added
Not applicable Not applicable   No 453993 Cannabis stores Cannabis legalized in October 2018

Integrated Business Statistics Program (IBSP)

This guide is designed to assist you as you complete the Annual Capital Expenditures Survey

Preliminary Estimate for 2018 and Intentions for 2019. If you need more information, please call the Statistics Canada Help Line at the number below.

Help Line: 1-877-604-7828

Table of contents

Reporting period information

For the purpose of this survey, please report information for your 12 month fiscal period for which the Final day occurs on or between April 1, 2018 – March 31, 2019.

  • May 1, 2017 – April 30, 2018
  • June 1, 2017 – May 31, 2018
  • July 1, 2017 – June 30, 2018
  • August 1, 2017 – July 31, 2018
  • September 1, 2017 – August 31, 2018
  • October 1, 2017 – September 30, 2018
  • November 1, 2017 – October 31, 2018
  • December 1, 2017 – November 30, 2018
  • January 1, 2018 – December 31, 2018
  • February 1, 2018 – January 31, 2019
  • March 1, 2018 – February 28, 2019
  • April 1, 2018 – March 31, 2019

Here are other examples of fiscal periods that fall within the required dates:

  • September 18, 2017 to September 15, 2018 (e.g., floating year-end)
  • June 1, 2018 to December 31, 2018 (e.g., a newly opened business)

Dollar amounts

  • all dollar amounts reported should be rounded to thousands of Canadian dollars (e.g., $6,555,444.00 should be rounded to $6,555);
  • exclude sales tax;
  • your best estimates are acceptable when precise figures are not available;
  • if there are no capital expenditures, please enter '0'.

Definitions

What are Capital Expenditures?

Capital Expenditures are the gross expenditures on fixed assets for use in the operations of your organization or for lease or rent to others.

Include:

  • Cost of all new buildings, engineering, machinery and equipment which normally have a life of more than one year and are charged to fixed asset accounts
  • Modifications, acquisitions and major renovations
  • Capital costs such as feasibility studies, architectural, legal, installation and engineering fees
  • Subsidies
  • Capitalized interest charges on loans with which capital projects are financed
  • Work done by own labour force
  • Additions to work in progress

How to Treat Leases

Include:

  • assets acquired as a lessee through either a capital or financial lease;
  • assets acquired for lease to others as an operating lease.

Exclude

  • assets acquired for lease to others, either as a capital or financial lease.

Information for Government Departments

The following applies to government departments only:

Include

  • all capital expenditures without taking into account the capitalization threshold of your department;
  • Grants and/or subsidies to outside entities (e.g., municipalities, agencies, institutions or businesses) are to be excluded;
  • Departments are requested to exclude from reported figures budgetary items pertaining to any departmental agency and proprietary crown corporation as they are surveyed separately;
  • Federal departments are to report expenditures paid for by the department, regardless of which department awarded the contract;
  • Provincial departments are to include any capital expenditures on construction (exclude outlays for land) or machinery and equipment, for use in Canada, financed from revolving funds, loans attached to revolving funds, other loans, the Consolidated Revenue Fund or special accounts.

Industry characteristics

Report the value of the projects expected to be put in place during the year. Include the gross expenditures (including subsidies) on fixed assets for use in the operations of your organization or for lease or rent to others. Include all capital costs such as feasibility studies, architectural, legal, installation and engineering fees as well as work done by your own labour force. Include all additions to work in progress.

New Assets, Renovation, Retrofit, includes both existing assets being upgraded and acquisitions of new assets

The following explanations are not applicable to government departments:

  • include - Capitalized interest charges on loans with which capital projects are financed
  • exclude - If you are capitalizing your leased fixed assets as a lessee in accordance with the Canadian Institute of Chartered Accountants' recommendations, please exclude the total of the capitalization of such leases during the year from capital expenditures

Purchase of Used Canadian Assets

Definition: Used fixed assets may be defined as existing buildings, structures or machinery and equipment which have been previously used by another organization in Canada that you have acquired during the time period being reported on this questionnaire.

Explanation: The objective of our survey is to measure gross annual new acquisitions to fixed assets separately from the acquisition of gross annual used fixed assets in the Canadian economy as a whole.

Hence, the acquisition of a used fixed Canadian asset should be reported separately since such acquisitions would not change the aggregates of our domestic inventory of fixed assets, it would simply mean a transfer of assets within Canada from one organization to another.

Imports of used assets, on the other hand, should be included with the new assets (Column 1) because they are newly acquired for the Canadian economy.

Work in Progress

Work in progress represents accumulated costs since the start of capital projects which are intended to be capitalized upon completion.

Typically capital investment includes any expenditure on an asset in which its' life is greater than one year. Capital items charged to operating expenses are defined as expenditures which could have been capitalized as part of the fixed assets, but for various reasons, have been charged to current expenses.

Land

Capital expenditures for land should include all costs associated with the purchase of the land that are not amortized or depreciated.

Residential Construction

Report the value of residential structures including the housing portion of multi-purpose projects and of townsites with the following Exceptions:

  • buildings that have accommodation units without self-contained or exclusive use of bathroom and kitchen facilities (e.g., some student and senior citizen residences)
  • the non-residential portion of multi-purpose projects and of townsites
  • associated expenditures on services

The exceptions should be included in the appropriate construction (e.g., non-residential) asset.

Non-Residential Building Construction (excluding land purchase and residential construction)

Report the total cost incurred during the year of building and engineering construction (contract and by own employees) whether for your own use or rent to others. Include also:

  • the cost of demolition of buildings, land servicing and of site-preparation
  • leasehold and land improvements
  • townsite facilities, such as streets, sewers, stores, schools

Non-residential engineering construction

Report the total cost incurred during the year of engineering construction (contract and by own employees) whether for your own use or rent to others. Include also:

  • the cost of demolition of buildings, land servicing and of site-preparation
  • oil or gas pipelines, including pipe and installation costs
  • all preconstruction planning and design costs such as engineer and consulting fees and any materials supplied to construction contractors for installation, etc.
  • communication engineering, including transmission support structures, cables and lines, etc.
  • electric power engineering, including wind and solar plants, nuclear production plants, power distribution networks, etc.

Machinery and Equipment

Report total cost incurred during the year of all new machinery, whether for your own use or for lease or rent to others. Any capitalized tooling should also be included. Include progress payments paid out before delivery in the year in which such payments are made. Receipts from the sale of your own fixed assets or allowance for scrap or trade-in should not be deducted from your total capital expenditures. Any balance owing or holdbacks should be reported in the year the cost is incurred.

Include:

  • automobiles, trucks, professional and scientific equipment, office and store furniture and appliances
  • computers (hardware and software), broadcasting, telecommunication and other information and communication technology equipment
  • motors, generators, transformers
  • any capitalized tooling expenses
  • progress payments paid out before delivery in the year in which such payments are made
  • any balance owing or holdbacks should be reported in the year the cost is incurred

Software

Capital expenditures for software should include all costs associated with the purchase of software.

Include:

  • Pre-packaged software
  • Custom software developed in-house/own account
  • Custom software design and development, contracted out

Research and Development

Research and experimental development (R&D) comprise creative and systematic work undertaken in order to increase the stock of knowledge – including knowledge of humankind, culture and society – and to devise new applications of available knowledge.

For an activity to be an R&D activity, it must satisfy five core criteria:

  1. To be aimed at new findings (novel);
  2. To be based on original, not obvious, concepts and hypothesis (creative);
  3. To be uncertain about the final outcome (uncertainty);
  4. To be planned and budgeted (systematic);
  5. To lead to results to could be possibly reproduced (transferable/ or reproducible).

The term R&D covers three types of activity: basic research, applied research and experimental development. Basic research is experimental or theoretical work undertaken primarily to acquire new knowledge of the underlying foundations of phenomena and observable facts, without any particular application or use in view. Applied research is original investigation undertaken in order to acquire new knowledge. It is, however, directed primarily towards a specific, practical aim or objective. Experimental development is systematic work, drawing on knowledge gained from research and practical experience and producing additional knowledge, which is directed to producing new products or processes or to improving existing products or processes.

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