Annual Capital Expenditures Survey Preliminary Estimate for 2015 and Intentions for 2016

Integrated Business Statistics Program (IBSP)

Reporting Guide

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

Preliminary Estimate for 2015 and Intentions for 2016. If you need more information, please call the Statistics Canada Help Line at the number below.

Help Line: 1-877-604-7828 or 1-800-972-9692

Your answers are confidential.

Statistics Canada is prohibited by law from releasing any information it collects which could identify any person, business, or organization, unless consent has been given by the respondent or as permitted by the Statistics Act.

Table of contents

Data-sharing agreements
Record linkages
Reporting period information
Definition
Industry characteristics

Data sharing Agreements

To reduce respondent burden, Statistics Canada has entered into data-sharing agreements with provincial and territorial statistical agencies and other government organizations, which have agreed to keep the data confidential and use them only for statistical purposes. Statistics Canada will only share data from this survey with those organizations that have demonstrated a requirement to use the data.

 

Section 11 of the Statistics Act provides for the sharing of information with provincial and territorial statistical agencies that meet certain conditions. These agencies must have the legislative authority to collect the same information, on a mandatory basis, and the legislation must provide substantially the same provisions for confidentiality and penalties for disclosure of confidential information as the Statistics Act. Because these agencies have the legal authority to compel businesses to provide the same information, consent is not requested and businesses may not object to the sharing of the data.

For this survey, there are Section 11 agreements with the provincial and territorial statistical agencies of Newfoundland and Labrador, Nova Scotia, New Brunswick, Quebec, Ontario, Manitoba, Saskatchewan, Alberta, British Columbia, and the Yukon.

The shared data will be limited to information pertaining to business establishments located within the jurisdiction of the respective province or territory.

Section 12 of the Statistics Act provides for the sharing of information with federal, provincial or territorial government organizations. Under Section 12, you may refuse to share your information with any of these organizations by writing a letter of objection to the Chief Statistician and returning it with the completed questionnaire. Please specify the organizations with which you do not want to share your data and mailing it to the following address: and mailing it to the following address:

Chief Statistician of Canada
Statistics Canada
Care of Roland Boudreau
Enterprise Statistics Division
150 Tunney’s Pasture Driveway
Ottawa, ON
K1A 0T6

You may also contact us by email at Roland.Boudreau@statcan.gc.ca or by fax at 613-951-6583.For this survey, there are Section 12 agreements with the statistical agencies of Prince Edward Island, the Northwest Territories and Nunavut as well as National Engery Board, Natural Resources Canada and Environment Canada.

For agreements with provincial and territorial government organizations, the shared data will be limited to information pertaining to business establishments located within the jurisdiction of the respective province or territory.

Record linkages

To enhance the data from this survey, Statistics Canada may combine it with information from other surveys or from administrative sources.

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, 2015 - March 31, 2016 for 2015 and April 1, 2016- March 31, 2017 for 2016.

May 2014 - April 2015 (04/15)
June 2014 - May 2015 (05/15)
July 2014 - June 2015 (06/15)
Aug. 2014 - July 2015 (07/15)
Sept. 2014 - Aug. 2015 (08/15)
Oct. 2014 - Sept. 2015 (09/15)
Nov. 2014 - Oct. 2014 (10/15)
Dec. 2014 - Nov. 2014 (11/15)
Jan. 2015 - Dec. 2014 (12/15)
Feb. 2015 - Jan. 2016 (01/16)
March 2015 - Feb. 2016 (02/16)
April 2015 - March 2016 (03/16)

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

  • September 18, 2014 to September 15, 2015 (e.g., floating year-end)
  • June 1, 2015 to December 31, 2015 (e.g., a newly opened business)

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 not to be included;
  • 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.

New Assets, Renovation, Retrofit (Column 1), 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 (Column 2)

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 development (R&D) comprise creative work undertaken on a systematic basis in order to increase the stock of knowledge, including knowledge of man, culture and society, and the use of this stock of knowledge to devise new applications. Basic and applied research is experimental or theoretical work undertaken primarily to acquire new knowledge of the underlying foundation of phenomenon and observable facts. Experimental development is systematic work, drawing on existing knowledge gained from research and/or practical experience, which is directed to producing new materials, products or devices, installing new process, systems and services, or improving substantially those already produced or installed.

Capacity Utilization (Manufacturing Companies only)

Capacity use (utilization) is calculated by taking the actual production level for an establishment (production can be measured in dollars or units) and dividing it by the establishment’s capacity production level.

Capacity production is defined as maximum production attainable under normal conditions.

To calculate capacity production, follow the establishment’s operating practices with respect to the use of productive facilities, overtime, workshifts, holidays, etc. For example, if your plant normally operates with one shift of eight hours a day five days a week then capacity will be calculated subject to these conditions and not on the hypothetical case of three shifts a day, seven days a week.

Example:
Plant “A” normally operates one shift a day, five days a week and given this operating pattern capacity production is 150 units of product “A” for the month. In that month actual production of product “A” was 125 units. The capacity utilization rate for plant “A” is (125/150) * 100 = 83%

Now suppose that plant “A” had to open a shift on Saturdays to satisfy an abnormal surge in demand for product “A”. Given this plant’s normal operating schedule, capacity production remains at 150 units. Actual production hasgrown to 160 units, so capacity utilization would be (160/150) * 100 = 107%.

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