Status
The variant of the North American Product Classification System (NAPCS) Canada 2017 for the Raw Materials Price Index (RMPI) was approved as a departmental standard on October 16, 2017. The new RMPI variant is based on NAPCS Canada 2017 Version 2.0, and replaces the previous RMPI variant based on NAPCS Canada 2012 Version 1.1.
Changes
The Raw Materials Price Index measures price changes for raw materials purchased by manufacturers in Canada for further processing. As our economy evolves, changes in our products must be reflected in the product classification used. Subsequent to the release of the updated NAPCS Canada 2017 Version 2.0, the variant for RMPI has been updated.
Changes to any variant may originate from modifications applied to the standard classification it is based on, as well as from revisions to the structure of the variant itself.
Changes to the standard classification are described in the introduction of each new version of NAPCS Canada. NAPCS Canada 2017 Version 2.0 mainly reflects the response to the legalization of cannabis for non-medical use. Additional to those major changes, some categories were merged, such as fuel wood and solid fuel products, and others were split, such as pulse crops and fresh vegetables. New categories were incorporated and more details were added to some categories, such as for maple syrup and other maple products. These changes improve relevancy to statistical programs and users. The structure of the RMPI variant was not affected by most of these changes, other than the addition of a new group under 213M created for cannabis seeds, vegetative plants and fresh flowering tops (including leaves), in bulk.
Background
In order to create a price index, price data is aggregated into distinct product classes. From the 1980s until 2013, the product classification system used by the RMPI was the Principal Commodity Groups. However, changes in the economy required periodic updates in the classification systems. Following the approval of NAPCS Canada 2012 as a departmental standard, the RMPI and the Industrial Product Price Index (IPPI) variants were approved as departmental standards on May 2013.
NAPCS is a product classification developed and updated jointly by Canada, Mexico and the United States. NAPCS Canada is the Canadian version and has a different structure than the trilateral NAPCS (for more details, see the introduction of NAPCS Canada 2017 V2.0). NAPCS Canada has been implemented by most Statistics Canada programs that have a “product” (goods and services) dimension. As new updated versions of NAPCS Canada are created, the RMPI is also updated.
The RMPI is produced and published together with the Industrial Product Price Index (IPPI). Both indexes are of value in analytical studies of price formation and historical comparisons. Both the RMPI and the IPPI are used to calculate the real Gross Domestic Product (GDP) by industry.
The RMPI is a regrouping variant, it introduces alternative aggregate levels by regrouping categories of NAPCS Canada, the base statistical classification. In the RMPI variant, NAPCS Canada is generally aggregated at the three-digit group level and, to a lesser extent, at the five-digit class level. The coding is alphanumeric and each variant has its own codes at the section and/or group levels. For example, in the RMPI, a letter and two digits are used for the 6 section codes (i.e., M11 to M61).
One of the purposes of the six-digit subclass level in NAPCS Canada 2017 is to support the RMPI and the IPPI programs. There are 1,470 subclasses at the six-digit level of NAPCS Canada version 2.0, of which 103 are included in the RMPI and 671 in the IPPI.
Hierarchical structure
The structure of the NAPCS Canada 2017 Version 2.0 variant for RMPI is hierarchical. It is composed of five levels:
- level 1: section (three-character alphanumeric codes)
- level 2: group (three-digit standard codes and four-character alphanumeric codes)
- level 3: class (five-digit standard codes and six-character alphanumeric codes)
- level 4: subclass (six-digit standard codes)
- level 5: detail (seven-digit standard codes)