Latest Developments in the Canadian Economic Accounts
An overview of revisions to the Financial and Wealth Accounts, 1990 to 2023

Overview

The Canadian System of Macroeconomic Accounts (CSMA) is a source of invaluable information for businesses, governments and citizens. These accounts provide users with important insights into the inner-workings of the economy, current economic trends and interactions between the various sectors of the economy. In order for these accounts to remain relevant, the underlying concepts, methods, classification systems and data sources need to be periodically updated.

Statistical revisions are carried out regularly in the CSMA to incorporate the most current information available. Generally, these revisions are limited to the months or quarters within a given reference year, or, on an annual basis, to the preceding two to three years.

Periodically, comprehensive revisions are conducted, which generally entail revisions beyond the scope of the standard revision window. These provide an opportunity to enhance estimation methods and incorporate improved data sources and concepts.

This paper presents an overview of recent changes to the Financial and Wealth Accounts (FWA) for the third quarter of 2023. The FWA represents an integrated set of accounts within the larger CSMA and is comprised of the National Balance Sheet Accounts (NBSA), the Financial Flow Accounts (FFA), and the Other Changes in Assets Account (OCAA). Notable changes are presented below, but more minor revisions due to the incorporation of benchmark source data and other data improvements were also implemented.

A primary objective of these revisions was to increase the interpretability and consistency of estimates while better aligning to international guidelines^Note . A secondary goal was to align estimates across different programs to ensure coherence among concepts and statistical outputs.

Mutual fund sector

The mutual fund sector is an important source of household wealth. The estimates of fund assets were reviewed, and more detailed transaction information was incorporated. This exercise included the integration of third-party data on the transactions of exchange traded funds. Several benchmarks were constructed from mutual fund industry data to provide a better indication of the net purchases of exchange traded fund unit holders. This resulted in notable revisions to the net transactions of households as they recorded greater investment inflows into mutual funds (Chart 1).

Currently, the FWA assumes that most mutual fund purchases, sales, and holdings are either with households or within the mutual fund sector (i.e., funds composed of other funds). However, there is likely a larger role played by other sectors including those representing institutional investors, such as pension funds. Future work is needed to investigate our treatment of non-traditional funds and the amount of funds held by other sectors within the Canadian economy. This may result in future revisions to the allocation of mutual fund activity and holdings.

Data table for Chart 1



Data table for chart 1
Table summary
This table displays the results of Data table for chart 1 Net transactions of mutual funds, current and Net transactions of mutual funds, Previous, calculated using billions of dollars units of measure (appearing as column headers).

	Net transactions of mutual funds, current	Net transactions of mutual funds, previous
	billions of dollars
2014
Q1	29.995	21.930
Q2	18.055	18.019
Q3	24.283	14.812
Q4	20.745	20.670
2015
Q1	43.205	40.156
Q2	31.351	29.484
Q3	23.718	21.500
Q4	50.622	46.816
2016
Q1	27.232	22.756
Q2	17.968	14.534
Q3	16.460	15.728
Q4	37.511	35.262
2017
Q1	29.245	24.933
Q2	25.862	18.264
Q3	9.377	6.860
Q4	36.219	30.264
2018
Q1	32.109	25.390
Q2	11.570	8.975
Q3	7.805	3.242
Q4	25.285	20.329
2019
Q1	16.237	12.531
Q2	11.837	6.034
Q3	12.335	7.474
Q4	47.275	35.187
2020
Q1	19.445	3.090
Q2	20.718	13.705
Q3	17.775	7.929
Q4	57.780	49.102
2021
Q1	74.284	59.621
Q2	59.086	40.191
Q3	46.624	36.033
Q4	84.095	76.630
2022
Q1	46.546	30.516
Q2	-15.164	-21.314
Q3	-13.425	-18.233
Q4	15.723	-2.916
Source: Statistics Canada, "An overview of revisions to the Financial and Wealth Accounts, 1990 to 2023", Latest Developments in the Canadian Economic Accounts (13-605-X), 2023.

Debt security liabilities

Statistics Canada produces information on securities statistics through the Monthly and Quarterly Securities programs. This includes debt securities, such as bonds and commercial paper, and equities, such as shares listed on public exchanges. To ensure alignment between the FWA and Securities Statistics program, information from the latter is incorporated into the quarterly FWA estimates at both market and nominal value. However, there are remaining areas where coherence between these two programs is still being strengthened. In the FWA, certain sectors were found to contain financing vehicles with securities liabilities that were already consolidated in the trusteed pension plan sector. The affected entities were found within financial auxiliaries, security and derivative dealers, and captive financial institutions and money lenders. However, revisions from reclassifying these entities did not completely offset within the affected sectors as estimates from the Securities Statistics program had not yet been fully incorporated for those valid security issuers that remained.

Data table for Chart 2



Data table for chart 2
Table summary
This table displays the results of Data table for chart 2 Revision to selected financial corporation's security liabilties and Revision to trusteed pension plan sector's security liabilties, calculated using billions of dollars units of measure (appearing as column headers).

	Revision to selected financial corporation's security liabilties	Revision to trusteed pension plan sector's security liabilties
	billions of dollars
2012
Q1	-29.886	3.430
Q2	-28.603	3.113
Q3	-33.994	3.918
Q4	-36.372	3.551
2013
Q1	-38.773	3.192
Q2	-36.268	3.597
Q3	-37.732	3.480
Q4	-39.737	3.300
2014
Q1	-42.131	3.370
Q2	-41.589	4.117
Q3	-42.770	4.118
Q4	-43.480	4.722
2015
Q1	-43.910	4.797
Q2	-42.203	4.628
Q3	-42.249	4.650
Q4	-42.866	4.185
2016
Q1	-45.896	4.458
Q2	-49.034	4.326
Q3	-50.664	5.562
Q4	-52.746	6.407
2017
Q1	-57.796	6.240
Q2	-54.954	8.020
Q3	-58.236	10.137
Q4	-59.120	10.598
2018
Q1	-61.686	10.632
Q2	-64.944	13.270
Q3	-65.754	13.081
Q4	-68.170	14.716
2019
Q1	-70.624	14.916
Q2	-70.349	18.199
Q3	-72.404	20.522
Q4	-74.371	21.609
2020
Q1	-55.898	23.338
Q2	-55.978	31.189
Q3	-59.199	36.537
Q4	-57.665	37.215
2021
Q1	-62.495	37.782
Q2	-64.036	41.218
Q3	-67.220	45.832
Q4	-69.528	47.151
2022
Q1	-64.360	44.534
Q2	-67.856	48.981
Q3	-66.768	46.651
Q4	-67.885	49.561
Source: Statistics Canada, "An overview of revisions to the Financial and Wealth Accounts, 1990 to 2023", Latest Developments in the Canadian Economic Accounts (13-605-X), 2023.

Pensions

Pension wealth is a critical and growing component of household net worth. A comprehensive review of the methodologies used to estimate pension inflows and outflows, funded status, pension entitlements, and pension wealth is currently underway. These current revisions are related to the measurement of the funded status of defined benefit plans within the non-financial corporations sector.

For the third quarter release of the National Balance Sheet Accounts, the series “claims of pension funds on pension managers” has been revised to incorporate updated information on pension fund entitlements (i.e., liabilities to pensioners) and funded status. This series represents an asset of the trusteed pension plan sector if plans are underfunded (i.e., claims of pension funds on pension managers) or a liability of this same sector if plans are overfunded (i.e., claims of pension managers on pension funds). These funding statuses are fluid as pension plans seek to eliminate any large discrepancies between their assets and liabilities through a variety of mechanisms including improving investment returns, increasing contributions, or requiring top-up payments.

Data table for Chart 3



Data table for chart 3
Table summary
This table displays the results of Data table for chart 3 Underfunded amount (current), Underfunded amount (previous), Overfunded amount (current) and Overfunded amount (previous), calculated using billions of dollars units of measure (appearing as column headers).

	Underfunded amount (current)	Underfunded amount (previous)	Overfunded amount (current)	Overfunded amount (previous)
	billions of dollars
2004
Q4	32.772	32.772	0.564	0.564
2005
Q1	33.803	33.803	0.941	1.087
Q2	34.872	34.872	1.588	1.610
Q3	36.096	36.096	2.235	2.133
Q4	37.155	37.155	2.880	2.654
2006
Q1	39.386	37.502	3.946	4.198
Q2	37.494	37.762	5.012	5.742
Q3	35.634	38.054	6.078	7.286
Q4	33.767	38.339	7.141	8.828
2007
Q1	32.658	36.621	7.142	9.009
Q2	31.547	34.901	7.143	9.190
Q3	30.400	33.145	7.144	9.371
Q4	29.251	31.385	7.141	9.551
2008
Q1	31.284	33.655	6.774	9.187
Q2	33.379	35.987	6.407	8.823
Q3	35.449	38.294	6.040	8.459
Q4	37.519	40.599	5.672	8.092
2009
Q1	38.494	39.552	4.965	6.546
Q2	39.446	38.482	4.258	5.000
Q3	40.396	37.410	3.551	3.454
Q4	41.346	36.340	2.845	1.910
2010
Q1	42.357	42.011	2.430	1.728
Q2	43.373	47.687	2.015	1.546
Q3	44.390	53.364	1.600	1.364
Q4	45.406	59.037	1.180	1.179
2011
Q1	49.075	67.686	0.886	0.885
Q2	52.605	76.196	0.592	0.591
Q3	56.135	84.706	0.298	0.297
Q4	59.661	93.214	0.217	0.000
2012
Q1	61.624	93.611	0.466	0.474
Q2	65.701	96.148	0.600	0.600
Q3	68.412	97.306	0.572	0.572
Q4	71.499	98.841	0.356	0.356
2013
Q1	66.137	86.791	1.471	0.979
Q2	59.264	73.268	2.595	1.611
Q3	53.524	60.859	3.713	2.237
Q4	46.990	47.656	4.865	2.897
2014
Q1	47.883	52.420	4.390	2.595
Q2	49.919	58.341	3.890	2.268
Q3	50.338	62.638	3.394	1.945
Q4	52.173	68.352	2.894	1.619
2015
Q1	51.091	66.127	3.880	2.149
Q2	48.908	62.805	4.828	2.641
Q3	45.038	57.794	5.748	3.105
Q4	41.117	52.730	6.695	3.599
2016
Q1	44.510	55.296	6.470	3.498
Q2	44.062	57.311	6.303	3.419
Q3	44.833	58.900	6.129	3.351
Q4	42.863	57.748	5.987	3.313
2017
Q1	41.740	57.154	7.255	3.889
Q2	41.186	57.129	8.494	4.484
Q3	38.572	55.044	9.780	5.102
Q4	39.010	56.014	11.023	5.678
2018
Q1	37.572	54.932	10.741	5.821
Q2	35.531	53.247	10.550	6.105
Q3	33.418	51.490	10.337	6.342
Q4	32.179	50.607	9.939	6.397
2019
Q1	34.356	55.131	10.540	6.356
Q2	36.569	59.939	11.157	6.387
Q3	37.383	63.224	11.805	6.421
Q4	39.109	67.420	12.480	6.480
2020
Q1	36.493	65.506	13.306	7.269
Q2	38.104	71.006	13.956	7.956
Q3	38.225	71.712	14.718	8.718
Q4	39.400	74.963	15.476	9.476
2021
Q1	32.482	62.520	18.870	12.410
Q2	29.380	54.013	22.330	15.505
Q3	26.115	45.248	26.609	19.362
Q4	20.019	31.544	31.224	21.890
2022
Q1	16.187	41.790	33.453	20.229
Q2	14.502	38.321	34.324	23.334
Q3	13.184	36.516	33.490	24.342
Q4	8.328	32.361	34.114	24.786
Source: Statistics Canada, "An overview of revisions to the Financial and Wealth Accounts, 1990 to 2023", Latest Developments in the Canadian Economic Accounts (13-605-X), 2023.

In contrast, some pension plans are non-trusteed and unfunded (i.e., pay as you go); however, a pension entitlement (i.e., liability) is still estimated in the NBSA for these plans. Within the provincial government sector, these unfunded pension liabilities were reviewed using publicly available public accounts data to supplement the government finance statistics data, which starts in the second quarter of 2008. These plans were measured based on the national accounting standards for the actuarial measures of pension liabilities to arrive at a more accurate estimate of these unfunded liabilities within the NBSA. Overall, this improved distinction for funded status will more accurately portray the financial position of pension plans in Canada.

Data table for Chart 4



Data table for chart 4
Table summary
This table displays the results of Data table for chart 4 Provincial government unfunded pension liabilities, current and Provincial government unfunded pension liabilities, previous, calculated using billions of dollars units of measure (appearing as column headers).

	Provincial government unfunded pension liabilities, current	Provincial government unfunded pension liabilities, previous
	billions of dollars
2004
Q4	61.616	61.616
2005
Q1	62.075	62.075
Q2	62.713	62.713
Q3	63.419	63.419
Q4	64.054	64.054
2006
Q1	64.937	64.937
Q2	65.569	65.569
Q3	66.692	66.692
Q4	67.367	67.367
2007
Q1	67.968	67.968
Q2	68.660	68.660
Q3	69.517	69.517
Q4	70.251	70.251
2008
Q1	71.285	71.285
Q2	90.174	72.174
Q3	90.844	72.844
Q4	90.879	73.422
2009
Q1	91.440	74.371
Q2	92.114	75.031
Q3	92.788	75.704
Q4	93.461	76.355
2010
Q1	94.307	78.317
Q2	95.239	79.398
Q3	96.170	80.503
Q4	97.102	81.317
2011
Q1	98.012	75.046
Q2	98.943	82.887
Q3	99.872	83.703
Q4	100.800	84.522
2012
Q1	102.257	80.610
Q2	103.623	86.302
Q3	104.990	87.072
Q4	106.356	87.796
2013
Q1	108.030	88.680
Q2	109.688	89.316
Q3	111.346	90.394
Q4	113.001	91.354
2014
Q1	113.779	92.480
Q2	114.520	93.191
Q3	115.260	94.106
Q4	116.000	94.988
2015
Q1	116.080	95.893
Q2	116.148	96.998
Q3	116.215	98.009
Q4	116.281	98.928
2016
Q1	118.933	105.415
Q2	121.560	100.714
Q3	124.186	101.424
Q4	126.813	102.127
2017
Q1	127.241	102.969
Q2	127.713	108.927
Q3	128.184	109.845
Q4	128.654	110.822
2018
Q1	127.652	111.561
Q2	126.595	112.216
Q3	125.536	112.900
Q4	124.480	113.594
2019
Q1	126.991	114.408
Q2	129.531	115.183
Q3	132.071	116.141
Q4	134.610	116.924
2020
Q1	135.578	117.675
Q2	136.498	118.349
Q3	137.418	119.415
Q4	138.338	120.180
2021
Q1	137.933	121.092
Q2	137.656	121.931
Q3	137.379	122.872
Q4	137.104	123.658
2022
Q1	136.984	124.521
Q2	136.729	125.518
Q3	136.473	126.715
Q4	136.218	127.681
Source: Statistics Canada, "An overview of revisions to the Financial and Wealth Accounts, 1990 to 2023", Latest Developments in the Canadian Economic Accounts (13-605-X), 2023.

Real estate

The value of real estate has been an important topic over the last few years given the changes in affordability and the pace of mortgage borrowing. With the third quarter release of the NBSA, annual benchmark data has been incorporated from the Property Values Program for residential real estate. The impact of integrating these benchmarks can be seen in Chart 5.

Data table for Chart 5



Data table for chart 5
Table summary
This table displays the results of Data table for chart 5 Value of residential real estate, current and Value of residential real estate, previous, calculated using billions of dollars units of measure (appearing as column headers).

	Value of residential real estate, current	Value of residential real estate, previous
	billions of dollars
2020
Q1	6,376	6,345
Q2	6,611	6,547
Q3	6,882	6,779
Q4	7,359	7,105
2021
Q1	8,062	7,753
Q2	8,333	7,916
Q3	8,841	8,263
Q4	9,487	8,818
2022
Q1	9,834	9,141
Q2	9,345	8,686
Q3	8,983	8,350
Q4	8,868	8,242
Source: Statistics Canada, "An overview of revisions to the Financial and Wealth Accounts, 1990 to 2023", Latest Developments in the Canadian Economic Accounts (13-605-X), 2023.

For the period from 1990 to 2000, the residential real estate series, consisting of dwellings and land underlying dwellings, was previously understated due to a back-casting method that lacked complete coverage of dwellings to value the land underlying dwellings in Canada. The previous dwelling count used in the National Balance Sheet Account calculation represented only a subset of the 1991 census dwelling count (the dwelling count itself has not changed). The estimate for the value of land has been revised to capture all dwellings and linked to the rest of the time series. The level change over this period reflects a smaller increase in the implied price of the stock of residential real estate in Canada compared with what was originally published.

Data table for Chart 6



Data table for chart 6
Table summary
This table displays the results of Data table for chart 6 Value of residential land, current and Value of residential land, previous, calculated using billions of dollars units of measure (appearing as column headers).

	Value of residential land, current	Value of residential land, previous
	billions of dollars
1990
Q1	670.451	290.516
Q2	646.471	299.924
Q3	648.678	308.442
Q4	641.975	310.829
1991
Q1	668.810	319.635
Q2	677.210	320.355
Q3	674.180	325.145
Q4	688.977	332.314
1992
Q1	700.996	345.484
Q2	711.219	350.209
Q3	721.504	370.949
Q4	733.200	382.823
1993
Q1	740.492	397.471
Q2	744.851	407.422
Q3	758.057	415.871
Q4	761.230	432.946
1994
Q1	758.263	450.867
Q2	768.187	460.125
Q3	775.230	474.071
Q4	760.267	483.657
1995
Q1	751.856	485.301
Q2	752.855	492.019
Q3	755.575	504.251
Q4	752.540	515.989
1996
Q1	753.139	526.004
Q2	761.243	539.859
Q3	765.760	544.884
Q4	758.614	560.809
1997
Q1	762.175	575.897
Q2	771.365	601.568
Q3	771.228	612.092
Q4	756.940	620.525
1998
Q1	758.693	635.527
Q2	761.160	654.844
Q3	759.632	660.254
Q4	759.646	678.094
1999
Q1	772.935	696.602
Q2	781.928	723.959
Q3	784.278	738.787
Q4	786.339	755.425
2000
Q1	803.438	775.866
Q2	787.985	787.985
Q3	798.126	798.126
Q4	810.405	810.405
Source: Statistics Canada, "An overview of revisions to the Financial and Wealth Accounts, 1990 to 2023", Latest Developments in the Canadian Economic Accounts (13-605-X), 2023.



Appendix A: Taxonomy of revisions

CSMA comprehensive revisions normally encompass six types of revisions: conceptual revisions, methodological revisions, classification revisions, statistical revisions, presentational revisions and content revisions.

• Conceptual revisions reflect changes in what is being measured. For example, key concepts in the macroeconomic accounts include the concept of a production boundary, consumption, institutional units, etc. Any change to these definitions or the addition of a new concept would be considered a conceptual revision.
• Methodological revisions reflect changes in how things are measured or the methods used to compile the accounts. For example, methods often used in macroeconomic accounting include deflation, seasonal adjustment, benchmarking and modeling. Any change to these techniques or the development of new techniques would be considered a methodological revision.
• Classification revisions occur when the classification systems (assets, industries, products, consumption, etc.) underlying the macroeconomic accounts are updated. Classification revisions are required to ensure that the presentation of the macroeconomic accounts reflect the current economic and social structure.
• Statistical revisions occur when new (generally higher quality) source data are integrated into the macroeconomic accounts.
• Presentational revisions occur when the way data are presented or the terms used to describe the data are updated, or additional data is provided. These revisions are generally made to align with international terminology or to make the data more intuitive for the users.
• Content revisions reflect changes in the amount of detail presented for a given account or set of macroeconomic statistics.