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

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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.

Introduction to the North American Industry Classification System (NAICS) Canada 2017 Version 3.0

Status

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

Purpose of NAICS

The North American Industry Classification System (NAICS) is 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 is based on supply-side or production-oriented principles, to ensure that industrial data, classified to NAICS, are suitable for the analysis of production-related issues such as industrial performance.

Economic statistics describe the behaviour and activities of economic transactors and of the transactions that take place among them. The economic transactors for which NAICS is designed are businesses and other organizations engaged in the production of goods and services. They include farms, incorporated and unincorporated businesses and government business enterprises. They also include government institutions and agencies engaged in the production of marketed and non-marketed services, as well as organizations such as professional associations and unions and charitable or non-profit organizations and the employees of households.

NAICS is a comprehensive system encompassing all economic activities. It has a hierarchical structure. At the highest level, it divides the economy into 20 sectors. At lower levels, it further distinguishes the different economic activities in which businesses are engaged.

NAICS is designed for the compilation of production statistics and, therefore, for the classification of data relating to establishments. It takes into account the specialization of activities generally found at the level of the producing units of businesses. The criteria used to group establishments into industries in NAICS are similarity of input structures, labour skills and production processes.

NAICS can also be used for classifying companies and enterprises. However, when NAICS is used in this way, the following caveat applies: NAICS has not been specially designed to take account of the wide range of vertically- or horizontally-integrated activities of large and complex, multi-establishment companies and enterprises. Hence, there will be a few large and complex companies and enterprises whose activities may be spread over the different sectors of NAICS, in such a way that classifying them to one sector will misrepresent the range of their activities. However, in general, a larger proportion of the activities of each complex company and enterprise is more likely to fall within the sector, subsector and industry group levels of the classification than within the industry levels. Hence, the higher levels of the classification are more suitable for the classification of companies and enterprises than are the lower levels. It should also be kept in mind that when businesses are composed of establishments belonging to different NAICS industries, their company- and enterprise-level data will show a different industrial distribution, when classified to NAICS, than will their establishment-level data, and the data will not be directly comparable.

While NAICS is designed for the classification of units engaged in market and non-market production, as defined by the System of National Accounts, it can also be used to classify own-account production, such as the unpaid work of households.

NAICS has been designed for statistical purposes. Government departments and agencies and other users that use it for administrative, legislative and other non-statistical purposes take responsibility for applying the classification in this manner.

Preface

The North American Industry Classification System (NAICS) represents a continuing cooperative effort among Statistics Canada, Mexico's Instituto Nacional de Estadística y Geografía (INEGI), and the Economic Classification Policy Committee (ECPC) of the United States, acting on behalf of the Office of Management and Budget, to create and maintain a common industry classification system. With its inception in 1997, NAICS replaced the existing classification of each country, the Standard Industrial Classification (1980) of Canada, the Mexican Classification of Activities and Products (1994), and the Standard Industrial Classification (1987) of the United States. Since 1997, the countries have collaborated in producing 5-year revisions to NAICS in order to keep the classification system current with changes in economic activities. This update of the classification is important as new industries are created to align with the legalization of cannabis for non-medical use.

The North American Industry Classification System is unique among industry classifications in that it is constructed within a single conceptual framework. Economic units that have similar production processes are classified in the same industry, and the lines drawn between industries demarcate, to the extent practicable, differences in production processes. This supply-based, or production-oriented, economic concept was adopted for NAICS because an industry classification system is a framework for collecting and publishing information on both inputs and outputs, for statistical uses that require that inputs and outputs be used together and be classified consistently. Examples of such uses include measuring productivity, unit labour costs, and capital intensity of production, estimating employment-output relationships, constructing input-output tables, and other uses that imply the analysis of production relationships in the economy. The classification concept for NAICS leads to production of data that facilitate such analyses.

In the design of NAICS, attention was given to developing a production-oriented classification for (a) new and emerging industries, (b) service industries in general, and (c) industries engaged in the production of advanced technologies. These special emphases are embodied in the particular features of NAICS, discussed below. These same areas of special emphasis account for many of the differences between the structure of NAICS and the structures of industry classification systems in use elsewhere. NAICS provides enhanced industry comparability among the three North American Free Trade Agreement (NAFTA) trading partners, while also increasing compatibility with the two-digit level of the International Standard Industrial Classification (ISIC Rev.4) of the United Nations.

NAICS divides the economy into twenty sectors. Industries within these sectors are grouped according to the production criterion. Though the goods/services distinction is not explicitly reflected in the structure of NAICS, four sectors are largely goods-producing and sixteen are entirely services-producing industries.

A key feature of NAICS is the information and cultural sector that groups industries that primarily create and disseminate a product subject to copyright. This sector brings together those activities that transform information into a commodity that is produced and distributed, and activities that provide the means for distributing those products, other than through traditional wholesale-retail distribution channels. Industries included in this sector are telecommunications; broadcasting; newspaper, book, and periodical publishing; software publishing; motion picture and sound recording industries; libraries; Internet publishing and broadcasting; and other information services.

Another feature of NAICS is a sector for professional, scientific and technical services. It comprises establishments engaged in activities where human capital is the major input. The industries within this sector are each defined by the expertise and training of the service provider. The sector includes such industries as offices of lawyers, engineering services, architectural services, advertising agencies, and interior design services.

A sector for arts, entertainment and recreation groups facilities or services that meet the cultural, entertainment and recreational interests of patrons.

The health care and social assistance sector recognizes the merging of the boundaries of these two types of services. The industries in this sector are arranged in an order that reflects the range and extent of health care and social assistance provided. Some important industries are family planning centres, outpatient mental health and substance abuse centres, and community care facilities for the elderly.

In the manufacturing sector, the computer and electronic product manufacturing subsector brings together industries producing electronic products and their components. The manufacturers of computers, communications equipment, and semiconductors, for example, are grouped into the same subsector because of the inherent technological similarities of their production processes, and the likelihood that these technologies will continue to converge in the future. The reproduction of packaged software is placed in this sector, rather than in the services sector, because the reproduction of packaged software is a manufacturing process, and the product moves through the wholesale and retail distribution systems like any other manufactured product. NAICS acknowledges the importance of these electronic industries, their rapid growth over the past several years and the likelihood that these industries will, in the future, become even more important in the economies of the three NAICS partner countries.

The NAICS structure reflects the levels at which data comparability was agreed upon by the three statistical agencies. The boundaries of all the sectors of NAICS have been delineated. In most sectors, NAICS provides for comparability at the industry (five-digit) level. However, for real estate, and finance and insurance, three-country comparability will occur either at the industry group (four-digit) or subsector (three-digit) levels. For these sectors, differences in the economies of the three countries prevent full comparability at the NAICS industry level. For utilities, retail trade, wholesale trade, and public administration, the three countries' statistical agencies have agreed, at this time, only on the boundaries of the sector (two-digit level). Below the agreed upon level of comparability, each country may add additional detailed industries, as necessary to meet national needs, provided that this additional detail aggregates to the NAICS level.

Foreword

Statistics Canada, the Instituto Nacional de Estadistica y Geografía (INEGI) of Mexico and the United States Office of Management and Budget, through its Economic Classification Policy Committee, have jointly updated the system of classification of economic activities that makes the industrial statistics produced in the three countries comparable. The North American Industry Classification System (NAICS) revisions for 2017 are scheduled to go into effect for reference year 2017 in the United States and in Canada and 2018 in Mexico. NAICS was originally developed to provide a consistent framework for the collection, analysis, and dissemination of industrial statistics used by government policy analysts, by academics and researchers, by the business community, and by the public.

Revisions for 2017 were made to account for our changing economies. NAICS is the first industry classification system that was developed in accordance with a single principle of aggregation, the principle that producing units that use similar production processes should be grouped together. NAICS also reflects, in a much more explicit way, the significant changes in technology and in the growth and diversification of services in recent decades. Though NAICS differs from other international industry classification systems, the three countries continue to strive to create industries that do not cross two-digit boundaries of the United Nations' International Standard Industrial Classification of All Economic Activities (ISIC).

The actual classification reveals only the tip of the work carried out by staff from INEGI, Statistics Canada, and U.S. statistical agencies. It is through their regular efforts, analysis, and co-operation that NAICS has emerged as a harmonized international classification of economic activities in North America.

Historical background

Over the years, Statistics Canada has developed and used a number of industrial classification systems. In 1948, the first Canadian Standard Industrial Classification (SIC) was developed. This was done to meet the government's need to establish a more comprehensive and fully-integrated system of economic reporting, in support of the key objectives of its post-war reconstruction programme outlined in the 1945 White Paper (on employment and income). The 1948 SIC brought together different industry descriptions in use at the time, each of which was applied to data about different aspects of the economy based on different definitions. It facilitated data comparability, by providing a framework of common concepts, terminology and groupings of industries. The introduction to the 1948 SIC manual stated that it was designed for the classification of the establishment but a precise definition was not provided.

In the major revision of the SIC in 1960, the importance of the need for a standard unit of observation was emphasized by the provision of a standard definition of the establishment. The variables needed to assemble the "basic industrial statistics" required for the analysis of the different sectors of the economy were specified and the establishment became the smallest unit capable of reporting that set of variables. The 1970 revision updated the industry groupings to reflect changes in the industrial structure of the economy.

The 1980 revision of the SIC was again a major one. This revision more directly linked the SIC to the System of National Accounts (SNA). It specified the universe of production to be as defined for the production accounts of the SNA. It drew a picture of all the variables that needed to be collected from or allocated to the establishment, in order to calculate value added by establishment for the Input Output accounts and Real Domestic Product by industry. It gave more emphasis to the role of "ancillary" activities in the collection of an integrated system of economic statistics and emphasized the difference between technical and ancillary activities and the role of ancillary units in accounting for total production. By using available statistics, it more explicitly used measures of specialization and coverage to delineate manufacturing industries. It recommended the use of the 1980 SIC for the classification of establishments and the compilation of production statistics.

In 1980, a separate classification, the Canadian Standard Industrial Classification for Companies and Enterprises, was produced for the compilation of financial statistics related to companies and enterprises. This classification took account of vertically-integrated companies and enterprises and created special classes for them at the lowest level of the classification. The higher levels of the classification cut across the traditional groupings of industrial classifications based on separating primary, secondary and tertiary activities in the economy and created sector groupings that drew together single and vertically-integrated companies and enterprises engaged in the production of similar product groups.

It was customary to revise the SIC at ten-year intervals; however, by 1990 not all the economic statistics programs of Statistics Canada had implemented the 1980 SIC. It was decided to postpone the revision and to take into account the statistical needs of the North American Free Trade Agreement signed in January 1994. The needs were met by developing NAICS, an industrial classification common to Canada, Mexico and the United States. The first version, NAICS 1997, was released in March 1998.

NAICS was revised for 2002 to achieve increased comparability among the three countries in selected areas and to identify additional industries for new and emerging activities. To that end, the construction sector was revised and comparability achieved, for the most part, at the industry (five-digit) level. Industries were created for Internet services providers and web search portals, and Internet publishing and broadcasting.

Changes to Canadian and world economies continue to impact on classification systems. NAICS was revised for 2007 to reflect these changes. In particular, the information sector was once again updated. The updates took into account the rapid changes within this area, including the merging of activities. As a result, Internet publishing and broadcasting and web search portals have been combined, as have Internet service providers and data processing, hosting, and related services. Telecommunications resellers and other telecommunications have also been merged.

The 2012 NAICS revision was undertaken to achieve one main goal: to modify or create industries to reflect new, emerging, or changing activities and technologies. New industries were created for video game publishers and designers, and small clothing manufacturing industries were rolled up to a higher classification level. In addition, new guidelines for the coding of units that outsource production of goods were written into the sector definitions for 31-33 Manufacturing and 41 Wholesale trade.

Revision of NAICS Canada for 2017 (Version 1.0)

A public consultation was launched on Statistics Canada's website on July 30th, 2013 through a call for proposals for changes to the 2012 NAICS version. The deadline for receipt of proposals was July 31st, 2014. Review of the proposals and consultations within Statistics Canada and with our Mexican and American counterparts were undertaken starting in 2013 and ending in 2015. NAICS Canada revisions for 2017 (Version 1.0) were finalized early in 2016.

Various kinds of changes are brought into NAICS for 2017 (Version 1.0). Many changes involve clarification of the definition and boundary of classes through changes to the descriptive text of the definition; the illustrative examples; the exclusions; and titles of industries. Some changes involve the reduction of industry detail, while other industries are detailed further.

Outsourcing of manufacturing

Units that outsource the transformation process for manufactured goods – will continue to be classified consistent with the treatment in International Standard Industrial Classification of All Economic Activities (ISIC) Revision 4. The units will be classified to manufacturing if the units own the material inputs to production. Otherwise the units will be classified to wholesale trade.

Telecommunications

The telecommunications industries were revised in recognition of the structure of telecommunications companies. Telecommunications carriers integrate all technologies, including wired and wireless. The corresponding NAICS change is a merging of 517111 Wired telecommunications carriers (except cable), 517112 Cable and other program distribution and 517210 Wireless telecommunications carriers (except satellite) into 517310 Wired and wireless telecommunications carriers. Telecommunications resellers are split out as 517911 Telecommunications resellers.

Oil and gas extraction

The oil and gas extraction industries were expanded to better reflect the structure of the Canadian industry. New 6-digit industries were created: 211141 In-situ oil sand extraction and 211142 Mined oil sands extraction.

Arts, sports and recreation

In order to better align the classification of arts, sports and recreation industries with user needs, new 6-digit industries were created in subsectors 711 Performing arts, spectator sports and related industries and 713 Amusement, gambling and recreation industries. These new industries are 711214 Other racing facilities and related activities, 711215 Independent athletes performing before a paying audience, 711217 Sports teams and clubs performing before a paying audience and supporting activities, 711411 Agents and managers for artists, entertainers and other public figures, 711412 Sports agents and managers, 713991 Sports clubs, teams and leagues performing before a non-paying audience, 713992 Other sports facilities and 713999 All other amusement and recreation industries.

Rental industries

In recognition of changes in rental industries and the small or diminishing size of some rental industries, 532220 Formal wear and costume rental, 532230 Video tape and disc rental and 532290 Other consumer goods rental were merged into 532280 Other consumer goods rental.

Record production and distribution

The industries 512210 Record production and 512220 Integrated record production/distribution were merged into 512250 Record production and distribution. This regrouping was initiated in response to the small size of the industries.

NAICS Canada 2017 Version 2.0

NAICS Canada 2017 Version 2.0 was released in March 2017. This version was created to meet urgent classification needs prior to the next scheduled NAICS revision in 2022.

Internet-only publishing

The principle change for NAICS Canada 2017 Version 2.0 consists of moving Internet-only publishing activities out of 519130 Internet publishing and broadcasting and web search portals (which becomes 519130 Internet broadcasting and web search portals) and into the corresponding publishing industries. Affected publishing industries are 511110 Newspaper publishers, 511120 Periodical publishers, 511130 Book publishers, 511140 Directory and mailing list publishers, 511190 Other publishers, 511211 Software publishers (except video game publishers), 511212 Video game publishers, and 512230 Music publishers.

Marijuana cultivation

A change was made to the list of examples to clarify the treatment of marijuana cultivation for medicinal purposes. The growing of medicinal marijuana under cover is classified to 111419 Other food crops grown under cover.

NAICS Canada 2017 Version 3.0

NAICS Canada 2017 Version 3.0 was released in September 2018. This version was created to meet classification needs prior to the next scheduled NAICS revision in 2022.

Cannabis industries

The principle change for NAICS Canada 2017 Version 3.0 consists of creating new cannabis-related industries in agriculture, manufacturing, wholesale trade and retail trade. The new industries are 111412 Cannabis grown under cover, 111995 Cannabis grown in open fields, 312310 Cannabis product manufacturing, 413410 Cannabis merchant wholesalers and 453993 Cannabis stores. In addition, new examples for cannabis wholesale by business-to-business electronic markets and cannabis products wholesale agents and brokers have been added to 419110 Business-to-business electronic markets and 419120 Wholesale trade agents and brokers, respectively. Cannabis cultivation for medicinal purposes has been moved from 111419 Other food crops grown under cover to 111412 Cannabis grown under cover.

The Development of NAICS

NAICS was developed by Statistics Canada, Mexico's Instituto Nacional de Estadística y Geografía (INEGI) and the Economic Classification Policy Committee (ECPC) of the United States Office of Management and Budget.

The three countries agreed upon the conceptual framework of the new system and the principles upon which NAICS was to be developed.

  1. NAICS would be based on a production-oriented or supply-based conceptual framework. This means that producing units using similar production processes would be grouped together in NAICS.
  2. Special attention would be given to developing production-oriented classifications for (a) new and emerging industries (b) service industries in general and (c) industries engaged in the production of advanced technologies.
  3. Time-series continuity would be maintained to the extent possible. However, changes in the economy and proposals from data users would be considered. In addition, in order to create a common system for all three countries, adjustments would be made where the United States, Canada and Mexico had incompatible definitions.
  4. In the interest of a wider range of international comparisons, the three countries would strive for greater compatibility with the International Standard Industrial Classification of All Economic Activities (ISIC Revision 3) by minimizing the extent to which the lowest levels of NAICS crossed the boundaries of the 2-digit level of ISIC Revision 3.

To help with the development of NAICS, a user committee meeting was called in November 1994 and extensive consultation was undertaken in Canada with federal and provincial government departments and agencies, business and trade associations, economic analysts and the advisory committees of Statistics Canada.

A co-ordinating committee and subcommittees, which covered agriculture, mining and manufacturing, construction, distribution networks (retail and wholesale trade, transportation, communications and utilities), finance, insurance and real estate, business and personal services and health, social assistance and public administration, were responsible for developing the proposed structure of NAICS, in co-operation with representatives from INEGI and the U.S. statistical agencies. Proposals from all three countries concerning individual industries were considered for acceptance, if the proposed industry was based on the production-oriented concept of the system. The structure of NAICS was developed in a series of three-country meetings and formally accepted by the senior representatives of the ECPC, INEGI and Statistics Canada.

The final structure of NAICS was accepted by the heads of Statistics Canada, INEGI and the Office of Management and Budget of the United States on December 10, 1996.

Conceptual framework of NAICS

NAICS is based on a production-oriented, or supply-based conceptual framework in that establishments are grouped into industries according to similarity in the production processes used to produce goods and services. The production process refers to the combination of inputs (capital, labour, energy, materials and services – KLEMS) used in producing a certain quantity of outputs. A production-oriented industry classification system ensures that statistical agencies in the three countries can produce information on inputs and outputs, industrial performance, productivity, unit labour costs, employment, and other statistics that reflect structural changes occurring in the three economies.

Producing units are grouped into industries according to similarities in their production processes as defined earlier. The boundaries between industries demarcate, in principle, differences in input structures and production technologies. This means that, in the language of economics, producing units within an industry have similar production functions that differ from those of producing units in other industries.

The unit of observation of the industrial classification is the producing unit or establishment, and the industrial classification groups producing units, not products. Groupings of producing units permit the collection of data on inputs and outputs on a comparable basis. Because establishments each produce a number of products in different combinations and using different technologies, it is hardly possible to group all the establishments producing a particular product. It is more useful to use a production-oriented approach to bring together, into industries, establishments with common input structures, and to compile data on their outputs. This permits the compilation of comprehensive data on the total output of each product by industry and across all industries.

In contrast, the various versions of the Canadian SIC and of the International Standard Industrial Classification of All Economic Activities (ISIC) of the United Nations have used mixed criteria to create the industries of the classification.

Use of the North American Product Classification System (NAPCS)

The needs of analysts to study market shares and the demand for products can more effectively be met by compiling data relating to the products produced by industries and using a product classification based on demand-oriented criteria to group products by markets served. Users of NAICS may want to consider and evaluate whether the classification they require is industry-based or product-based and whether a product classification would best suit their needs.

The North American Product Classification System (NAPCS) is a classification that organizes goods and services throughout the economy in a systematic fashion. It is a departmental standard classification for goods and services. A description of NAPCS is available at the following link: Standard product classifications.

Structure of NAICS

The structure of NAICS is hierarchical. The numbering system that has been adopted is a six-digit code, of which the first five digits are used to describe the NAICS levels that will be used by the three countries to produce comparable data. The first two digits designate the sector, the third digit designates the subsector, the fourth digit designates the industry group and the fifth digit designates the industry. The sixth digit is used to designate national industries. A zero as the sixth digit indicates that there is no further national detail.

NAICS agreements define the boundaries of the twenty sectors into which the classification divides the economies of the three countries. Although, typically, agreement has been reached that comparable data will be made available for Canada, Mexico and the United States up to the five-digit industry level of NAICS, differences in the organization of production in the economies of the three countries necessitated certain exceptions. For some sectors, subsectors and industry groups, three-country agreement was reached only on their boundaries rather than on detailed industry structures.

In general, the use of the same code across the three countries indicates that the class is comparable, even if the title is not identical because of differences in the use of language.

NAICS with Canadian detail is designated NAICS Canada while NAICS with the United States' and Mexico's own six-digit detail are designated NAICS United States and Sistema de Clasificación Industrial de América del Norte (SCIAN) México, respectively.

Comparability among the three countries is indicated by superscripts at the end of class titles. The abbreviation "CAN" indicates a Canadian-only class, "MEX" indicates that the Canadian and Mexican classes are comparable, and "US" indicates that the Canadian and United States classes are comparable. When no superscript appears, the Canadian, Mexican and United States classes are comparable.

NAICS Canada 2017 Version 3.0 structure

NAICS Canada 2017 Version 3.0 consists of 20 sectors, 102 subsectors, 324 industry groups, 710 industries and 928 Canadian industries, and replaces NAICS Canada 2017 Version 2.0. The following summary table shows the counts of subsectors, industry groups, industries, and Canadian industries for each of the NAICS sectors.

2017 NAICS Canada 3.0 Structure
Code Sectors Sub-sectors Industry groups Industries Canadian industries Total
11 Agriculture, forestry, fishing and hunting 5 19 41 52 117
21 Mining, quarrying, and oil and gas extraction 3 5 11 30 49
22 Utilities 1 3 6 10 20
23 Construction 3 10 28 29 70
31-33 Manufacturing 21 87 182 252 542
41 Wholesale trade 9 27 73 73 182
44-45 Retail trade 12 27 58 75 172
48-49 Transportation and warehousing 11 29 42 58 140
51 Information and cultural industries 6 11 25 28 70
52 Finance and insurance 5 11 28 52 96
53 Real estate and rental and leasing 3 8 17 20 48
54 Professional, scientific and technical services 1 9 35 41 86
55 Management of companies and enterprises 1 1 1 2 5
56 Administrative and support, waste management and remediation services 2 11 29 34 76
61 Educational services 1 7 12 12 32
62 Health care and social assistance 4 18 30 37 89
71 Arts, entertainment and recreation 3 9 23 38 73
72 Accommodation and food services 2 6 10 18 36
81 Other services (except public administration) 4 14 30 38 86
91 Public administration 5 12 29 29 75
Total 102 324 710 928 2064

Definition of the establishment

NAICS is a classification system for establishments. The establishment is defined as the smallest operating entity for which records provide information on the cost of inputs - capital, labour, energy, materials and services - employed to produce the units of output. The output may be sold to other establishments and receipts or sales recorded, or the output may be provided without explicit charge, that is, the good or service may be "sold" within the company itself.

The establishment in NAICS Canada is generally a single physical location, where business is conducted or where services or industrial operations are performed (for example, a factory, mill, store, hotel, movie theatre, mine, farm, airline terminal, sales office, warehouse, or central administrative office).

There are cases where records identify distinct and separate economic activities performed at a single physical location (e.g., shops in a hotel). These retailing activities, operated out of the same physical location as the hotel, are identified as separate establishments and classified in retail trade while the hotel is classified in accommodation. In such cases, each activity is treated as a separate establishment provided that: no one industry description in the classification includes such combined activities; separate reports can be prepared on the number of employees, their wages and salaries, sales or receipts, and expenses; and employment and output are significant for both activities.

Exceptions to the single location exist for physically dispersed operations, such as construction, transportation, and telecommunications. For these activities the individual sites, projects, fields, networks, lines, or systems of such dispersed activities are not normally considered to be establishments. The establishment is represented by those relatively permanent main or branch offices, terminals, stations, and so forth, that are either (1) directly responsible for supervising such activities, or (2) the base from which personnel operate to carry out these activities.

Although an establishment may be identical with the enterprise (company), the two terms should not be confused. An enterprise (company) may consist of more than one establishment. Such multi-unit enterprises may have establishments in more than one industry in NAICS. If such enterprises have a separate establishment primarily engaged in providing headquarters services, these establishments are classified in NAICS Sector 55, Management of companies and enterprises.

Although all establishments have output, they may or may not have receipts. In large enterprises, it is not unusual for establishments to exist to solely serve other establishments of the same enterprise (auxiliary establishments). In such cases, these units often do not collect receipts from the establishments they serve. This type of support activity is found throughout the economy and involves goods producing activities as well as services. Units that carry out support activities for the enterprise to which they belong are classified, to the extent feasible, according to the NAICS code related to their own activity. This means that warehouses providing storage facilities for their own enterprise will be classified as warehouses.

Determining the Industry Classification of an establishment

An establishment is classified to an industry when its principal activity meets the definition for that industry. This is a straightforward determination for establishments engaged in a single activity, but where establishments are engaged in more than one activity, it is necessary to establish procedures for identifying its principal activity.

In cases where there is more than one activity, the industry code is assigned based on the relative share of value-added. The activity with the largest value-added is identified as the establishment's principal activity, and the establishment is classified to the industry corresponding to that activity. For example, if the value added within an establishment consists of 40% from manufacturing dishwashers, 30% from manufacturing airspeed instruments and 30% from assembling clocks, it will be classified to NAICS 335223, Major kitchen appliance manufacturing. The assignment of the industry code is performed at the 6-digit level of the classification.

In most cases, when an establishment is engaged in more than one activity, the activities are treated independently. However, in some cases, the activities are treated in combination. There are two types of combined activities that are given special attention in NAICS. They are vertical integration and joint production (horizontal integration).

These combined activities have an economic basis and occur in both goods-producing and services-producing sectors. In some cases, there are efficiencies to be gained from combining certain activities in the same establishment. Some of these combinations occur so commonly or frequently that their combination can be treated as a third activity in its own right and explicitly classified in a specific industry.

One approach to classifying these activities would be to use the primary activity rule, that is, whichever activity is largest. However, the fundamental principle of NAICS is that establishments that employ the same production process should be classified in the same industry. If the premise that the combined activities correspond to a distinct third activity is accepted, then using the primary activity rule would place establishments performing the same combination of activities in different industries, thereby violating the production principle of NAICS. A second reason for NAICS recognizing combined activities is to improve the stability of establishment classification, both over time and among the various parties that implement the classification. An establishment should remain classified in the same industry unless its production process changes; and different parties should code the same establishment or type of establishment in the same way. A consistent treatment of establishments with combined activities is more likely if they are classified to a single industry.

Vertical integration involves consecutive stages of fabrication or production processes in which the output of one step is the input of the next. In general, establishments will be classified based on the final process in a vertically-integrated production environment, unless specifically identified as classified in another industry. For example, paper may be produced either by establishments that first produce pulp and then consume that pulp to produce paper or by those establishments producing paper from purchased pulp. NAICS specifies that both of these types of paper-producing processes should be classified in NAICS 32212, Paper mills rather than in NAICS 32211, Pulp mills. In other cases, NAICS specifies that vertically-integrated establishments be classified in the industry representing the first stage of the manufacturing process. For example, steel mills that make steel and also perform other activities such as producing steel castings are classified in NAICS 33111, Iron and steel mills and ferro-alloy manufacturing, the first stage of the manufacturing process.

The joint production of goods or services represents the second type of combined activities. In some cases, these combined activities have been assigned to a specific NAICS industry. For example, establishments that both engage in the sale of new cars and also provide repair services are coded to NAICS 44111, new car dealers. In other cases, specific industries have been identified for these combined activities, such as NAICS 44711, Gasoline stations with convenience stores.

In some complex businesses, there are units that exclusively produce services in support of other units within the same company or enterprise. Examples of such units are transportation units, central administrative units and head offices. Such units are known as ancillary units and are classified according to the NAICS code related to their own activity. This means that a warehouse providing storage facilities for its own company or enterprise will be classified as a warehouse. Similarly, a head office providing headquarters services for its own company or enterprise will be classified to the head office industry.

The Relationship of NAICS Canada and ISIC Revision 4

Recognizing that economic statistics are substantially more useful if they are also internationally comparable, the Economic and Social Council of the United Nations (UN) first adopted an International Standard Industrial Classification of All Economic Activities (ISIC) in 1948. Since then, ISIC has been revised in 1958, 1968, 1989, and, most recently, in 2008. This 2008 version of the classification is referred to as ISIC Revision 4. With these various revisions, the Council has recommended that member states adopt, as soon as possible, the latest version of the classification, with such modifications as necessary to meet national requirements, without disturbing the framework of the classification.

Similar to NAICS, ISIC was designed primarily to provide a classification for grouping activities (rather than enterprises or firms), and the primary focus for the ISIC classification system is the kind of activity in which establishments or other statistical entities are engaged. Whereas the main criteria employed in delineating the divisions, groups and classes of ISIC are: (a) the character of the goods and services produced; (b) the uses to which the goods and services are put; and (c) the inputs, the process and technology of production, it is the third criterion of ISIC that corresponds to the conceptual basis of NAICS.

ISIC Rev. 4 groups economic activity into 21 broad sections, 88 divisions, 238 groups, and 419 classes. In the coding system, sections are distinguished by the letters A through U and the divisions, groups, and classes are identified as the two-digit, three-digit, and four-digit groupings, respectively. As was the case with NAICS, the most recent revision of ISIC also focused on improvements to the detail in services sections.

In the development and subsequent revision of NAICS industries, the statistical agencies of the three countries strove to create industries that did not cross ISIC two-digit boundaries. The 2007 revision of NAICS and revision 4 of ISIC increased comparability beyond previous levels. The 2012 and 2017 NAICS revisions maintains the same level of comparability with ISIC Rev. 4.

The third and fourth versions of ISIC put increased emphasis on harmonization with other activity classifications. ISIC Rev. 4 in particular was intended to have improved comparability with NAICS. The ISIC Rev. 4 revision process spanned several years and involved contributions from classification experts and users around the world, including NAICS experts. The revised ISIC structure is more detailed than the previous version, especially in the area of services. As well, to improve comparability explanatory notes have been extended to provide additional detail. This improved comparability reflects ISIC's central role in international comparison and analysis of industry statistics.

In addition to working to maintain coherence between NAICS and ISIC, international efforts have also focused on moving towards greater coherence between NAICS, ISIC and the Statistical Classification of Economic Activities in the European Community (NACE, Nomenclature statistique des activités économiques dans la Communauté européenne). NACE is very similar to ISIC, so improved convergence of NAICS with ISIC benefits convergence with NACE as well.

Classification Structure

The Classification Structure displays the codes and titles of the sectors, subsectors, industry groups, industry, and national industries of NAICS Canada. In general, comparable sectors, subsectors, industry groups, industries carry the same code in NAICS Canada, NAICS Mexico and NAICS United States.

The superscript symbols at the end of NAICS class titles used to signify comparability are:

CAN
Canadian industry only
MEX
Canadian and Mexican industries are comparable
US
Canadian and United States industries are comparable
[Blank]
[No superscript symbol] Canadian, Mexican and United States industries are comparable.
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