Status

The variant of the North American Product Classification System (NAPCS) Canada 2012 for capital expenditures on non-residential construction was approved as a departmental standard on June 16, 2014. The variant is based on NAPCS Canada 2012 Version 1.1.

Transition from asset types to NAPCS Canada 2012

As with any capital expenditure, assets are grouped into distinct classes in order to make it possible to aggregate expenditure data. Since 1965, the classification system used for capital expenditures on non-residential construction has been a program-specific classification. Changes in the economy require that classification systems be updated periodically. The capital expenditures program is adopting NAPCS, developed by Canada, the United States and Mexico. Moreover, NAPCS has been adopted by most Statistics Canada programs that have a product dimension.

There are several benefits to converting to NAPCS:

1. Most Statistics Canada programs having a product dimension will adopt NAPCS. As a result, Statistics Canada data will be coherent and consistent.
2. Some products produced in Canada today did not exist in the 1960's, when the classification system used for capital expenditures was created. Converting to a new classification system will allow products to be classified more accurately.
3. Statistical programs in the United States and Mexico may also release data on the basis of NAPCS. If so, this will allow easier international comparisons of product data.

NAPCS variant for capital expenditures on non-residential construction

Information on capital spending provides a useful indication of market conditions both in the economy at large and in particular industries. Since such expenditures account for a large and relatively variable proportion of gross domestic expenditures, the size and content of the investment program provides significant information about demands that have been placed upon the productive capabilities of the economy during a specific period. In addition, information on the relative size of the capital expenditures program planned, both in total and for individual industries, gives an indication of the views management hold on the future market demands in relation to present productive capacity. The information is used by the Canadian System of National Accounts for the measurement of the Gross Domestic Product and the Balance of Payments, as well as by federal and provincial governments and agencies, trade associations, universities and international organizations for policy development and as a measure of regional activity.

The NAPCS variant for capital expenditures on non-residential construction includes all categories of NAPCS 622 Non-residential buildings and 623 Infrastructures (except buildings), most categories of 671 Mining and oil and gas support services, and the remediation services categories of 782 Water, sewer and waste management services.

This NAPCS variant adds two levels (section and division) to the standard classification structure; the division level is largely defined in terms of standard classes (five-digit). The variant also aggregates NAPCS standard categories of the six-digit subclass and seven-digit detail levels, but to a much lesser extent. It does not use any categories of the standard three-digit group level. In order to accommodate a system of NAPCS variants, the coding is alphanumeric. The variant for capital expenditures on non-residential construction has its own codes at the section and division levels; for example, one alpha and two digits are used for the twelve section codes (i.e., X11 to X91).

Hierarchical structure

The structure of the NAPCS 2012 variant for capital expenditures on non-residential construction is hierarchical. It is composed of five levels.

level 1: section (three-character alphanumeric codes)
level 2: division (four- or five-character alphanumeric codes)
level 3: class (five-digit standard codes, and six-character alphanumeric codes)
level 4: subclass (six-digit standard codes, and seven-character alphanumeric codes)
level 5: detail (seven-digit standard codes)

Status

Variants of the North American Product Classification System (NAPCS) Canada 2012 for the Industrial Product Price Index (IPPI) and the Raw Materials Price Index (RMPI) were approved as departmental standards on May 27, 2013. The variants are based on NAPCS Canada 2012 Version 1.1.

Transition from Principal Commodity Groups (PCG) to NAPCS Canada 2012

As with any index, prices are grouped into distinct classes in order to make it possible to aggregate price data. Since the 1980s, the product classification system used by the IPPI has been the Principal Commodity Groups (PCG). Changes in the economy require that classification systems be updated periodically. The IPPI and RMPI are adopting NAPCS, developed by Canada, the United States and Mexico. Moreover, NAPCS has been adopted by most Statistics Canada programs that have a product dimension.

There are several benefits to converting to NAPCS:

1. Most Statistics Canada programs having a product dimension will adopt NAPCS. As a result, Statistics Canada data will be coherent and consistent.
2. Some products produced in Canada today did not exist in the 1980s, when the PCG system was created. Converting to a new classification system will allow products to be classified more accurately.
3. Statistical programs in the United States and Mexico may also release data on the basis of NAPCS. If so, this will allow easier international comparisons of product data.

NAPCS variants for IPPI and RMPI

One of the purposes of the six-digit subclass level in NAPCS Canada 2012 is to support the IPPI and RMPI programs. There are 1,411 subclasses at the six-digit level of NAPCS, of which 665 are included in the IPPI and 90 are included in the RMPI.

IPPI measures price changes for major commodities sold by manufacturers in Canada. The prices collected are for goods sold at the factory gate. The IPPI variant is of value in analytical studies of price formation and historical comparisons. It is also used to calculate the real Gross Domestic Product (GDP) by industry.

RMPI measures price changes for raw materials purchased by manufacturers in Canada for further processing. The RMPI is produced and published together with the IPPI as it meets the same interest and needs. Like the IPPI variant, the RMPI variant is also of value in analytical studies of price formation and historical comparisons. It is also used in the calculation of real GDP by industry.

In the IPPI and RMPI variants, NAPCS is generally aggregated at the three-digit group level and, to a lesser extent, at the five-digit class level. In order to accommodate a system of NAPCS variants, the coding is alphanumeric. Each variant has its own codes at the section and/or group levels. For example, in the IPPI, an alpha and two digits are used for the 21 section codes (i.e., P11 to P92).

Hierarchical structure

The structure of the NAPCS 2012 variants for IPPI and RMPI is hierarchical. It is composed of five levels.

level 1: section (three-character alphanumeric codes)
level 2: group (three-digit standard codes, and four-character alphanumeric codes)
level 3: class (five-digit standard codes, and six-character alphanumeric codes)
level 4: subclass (six-digit standard codes)
level 5: detail (seven-digit standard codes)