Canadian International Merchandise Trade (Customs Basis)

Detailed information for September 2006

This activity is conducted to provide statistical information and analysis of the value of Canada's merchandise exports and imports by commodity and by partner country.

Data release - November 9, 2006

• Description
• Data sources and methodology
• Data accuracy

Description

This activity is conducted to provide statistical information and analysis of the value of Canada's merchandise exports and imports by commodity and by partner country.

Information on imports and exports are inputs into the Canadian System of National Accounts, particularly in the Balance of Payments and Gross Domestic Product, and are used in the formulation of trade and budgetary policies. Governments, importers, exporters, manufacturers and shipping companies use trade statistics to monitor import penetration and export performance, monitor commodity price and volume changes and examine transport implications.

Reference period: Month

Collection period: Calendar month

Subjects

• Balance of international payments
• Economic accounts
• International trade
• Merchandise exports
• Merchandise imports

Data sources and methodology

Instrument design

This methodology does not apply.

Sampling

This methodology does not apply.

Data sources

Data are extracted from administrative files.

Canadian trade statistics are compiled according to the "General" system of trade as defined by the United Nations Statistical Office. The general trade system, in principle, presents all goods entering the country (imports) and all goods leaving the country (exports). It differs from the "Special" system of trade in the treatment of imported goods into Customs bonded warehouses. Under the special trade system, these goods are counted only if and when they are withdrawn from Customs warehouses for home consumption. They are not counted in export statistics unless they have first cleared Customs.

The closing of the statistical month for imports and exports is defined as the last calendar day of the month based as closely as practicable on the date of clearance from Customs.

Import data are captured by the Canadian Border Services Agency (CBSA or Customs) from B3 forms and from electronic import transaction entries. Data for Canadian exports to countries other than United States are compiled by the International Trade Division from B-13A forms received via the CBSA and from Summary Reports and Canadian Automated Export Declarations (CAED) submitted directly to Statistics Canada.

Canadian exports to the United States are compiled using United States import statistics (from the U.S. Customs Service via the U.S. Census Bureau) and account for over 80% of the value of Canada's export trade. This procedure is used for all Canadian exports to the United States except exports of natural gas and electricity. These two commodities are recorded directly from Canadian sources in both Canadian and U.S. customs data, as the Canadian sources are viewed as more accurate than U.S. import data for these series.

Error detection

Validation, combination, unit value and 'reasonableness' edits are performed on both imports and exports data during the edit and imputation process. Validity checks ensure that a reported variable respects its defined characteristics, e.g., numeric variables are reported as numeric, valid codes have been provided, etc. Combination edits include commodity/country, commodity/trader and commodity/province. Unit value lows and highs are calculated for each Harmonized System (HS) code. Data that fall within this range are accepted while those that fail are rejected.

Imputation

Both manual and automated imputations are performed on imports and exports data. If manual corrective action is required, often a link to the electronic invoice will suffice to obtain the necessary information. Otherwise, a follow-up with the importer, exporter or their representative, the broker is carried out.

Data that fail the edits and are below a value threshold are automatically imputed. In the case of a unit value failure the quantity is the variable automatically imputed. Quantity is imputed by randomly selecting a unit value between a high and a low unit value range.

Estimation

Import and export values are disseminated in Canadian dollars and can require conversion from reported currencies. Foreign currencies are converted using the Bank of Canada monthly average based on the daily noon rates.

There are two currency conversion processes involved in Canada's export transactions to the U.S. Imports must be reported to the U.S. Customs agency in U.S. dollars for accounting. In turn, these data (in U.S. dollars) are transmitted to the USCB which converts them to Canadian dollars prior to transmitting to Statistics Canada.

Export data for natural gas and electricity are estimated for the current and previous months as this information is not received from source in time.

Quality evaluation

Transaction-level data are aggregated and subjected to month over month and year over year analysis to detect errors and explain observed movements.

The models used to seasonally adjust are reviewed annually by the Economic Statistics Methods Division of Statistics Canada.

Disclosure control

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. Various confidentiality rules are applied to all data that are released or published to prevent the publication or disclosure of any information deemed confidential. If necessary, data are suppressed to prevent direct or residual disclosure of identifiable data.

The Canadian International Merchandise Trade Program (CIMTP) of Statistics Canada is similar to most other countries in its use of administrative data derived from Customs sources to produce merchandise trade data and its use of the 'passive suppression' approach for confidentiality. Passive suppression is based on the principle that confidential data will not knowingly be released. It requires that appropriate measures be taken only at the request of importers or exporters who feel that their interests would be harmed by the dissemination of data. The onus of notifying CIMTP of suspected instances of the release of confidential data rests with the affected companies.

Revisions and seasonal adjustment

Revisions - In general, merchandise trade data are revised on an ongoing basis for each month of the current year. Customs basis data are revised for the previous data year each quarter.

Factors influencing revisions include late receipt of import and export documentation, incorrect information on customs forms, replacement of estimates with actual figures, changes in classification of merchandise based on more current information, and changes to seasonal adjustment factors.

Seasonal Adjustment - Both export and import statistics show large monthly fluctuations. In order to isolate turning points or trends in the basic data, it is necessary to eliminate this effect of seasonal movement. Statistics Canada uses the X-11-ARIMA (Dagum, 1975 and 1979) method to remove seasonal fluctuations from time series.

A full description on seasonal adjustment is provided in the attached document.

• Additional documentation

Data accuracy

The administrative data used to compile trade statistics is considered to be complete and accurate. Any anomalies or inconsistencies detected are verified with the source, and where necessary, adjustments are made to reconcile data with the conceptual framework of the series. The administrative agencies used are considered to be the best source available.

It is not unusual for the accuracy of export statistics to be adversely affected by undercoverage and/or country misallocation. While Statistics Canada does not have a direct measure of undercoverage, a monthly estimated adjustment is included within balance of payments based data. Country misallocation occurs when the country of final destination is inaccurately reported on the Customs documentation. This occurs most frequently when goods are routed through an intermediary country before continuing to their final destination with the intermediary country being reported as the final destination of the goods.