Foreign Service Post Indexes

Detailed information for January 2003

This survey has been designed for the computation of comparative indexes of retail prices and costs encountered by Canadian Government personnel stationed at foreign locations/posts.

• Questionnaire(s) and reporting guide(s)
• Description
• Data sources and methodology

Description

The Canadian government employs military and civilian expatriates in more than 300 locations throughout the world. Canada-based personnel who serve at these posts may experience considerably different living conditions from those at home. Among these differences are the prices they may have to pay for consumer goods and services. Higher price levels, fluctuating exchange rates and inflation at the post may mean that the purchasing power of their Canadian dollar is not as great as it would be in Ottawa.

The Federal government has developed a foreign service compensation system that is embodied in the Foreign Service Terms and Conditions of Employment Directives (FSDs) and the Queen's Regulations and Orders for the Canadian Forces (QR & O's).

One element of foreign service compensation is known as the Post Living Allowance (PLA), the level of which is regulated by the Post Index. Applied to salary bands, the Post Index equalizes the purchasing power of the portion of the employee's salary that is used to purchase the Post Index "basket" of goods and services.

The goods and services represented in the Post Index are weighted according to the relative importance of those commodities in the expenditures of consumers. These weights ensure that a 10% difference in the price of milk, for example, would have a greater impact in the Post Index than a 10% difference in the price of waxed paper. This is because Canadians as a whole spend a much larger share of their total expenditures on milk than on waxed paper.

Post Index basket weights are obtained from surveys of consumer expenditures relating to a specific year. The weights are currently based on 1997 consumer expenditure data.

Post Index surveys are conducted every 30 to 36 months. Once calculated they are subjected to a monthly review to ensure their validity in the face of exchange rate fluctuations and differences in the rate of inflation between the foreign location and Ottawa, the base location for these surveys. Because of the limited range of goods and services included in Post Index studies and access to certain tax-free or restricted shopping venues, interested users should contact Statistics Canada to ensure the use of these indexes is appropriate for their needs.

Collection period: Approximately two weeks

Subjects

• Intercity and international price comparisons
• Prices and price indexes

Data sources and methodology

Target population

The target population for the International Retail Prices and Costs Survey Individual Report Consumer Information questionnaire is federal government personnel and agents posted to foreign locations. The questionnaire should be completed by a representative of each family at the post. The survey reflects the purchasing habits of these employees in terms of the source of products at the specific location including those from restricted access outlets, e.g. diplomatic stores or tax-free sources and other locations used by these respondents.

The target population for the post Pricing Schedules is retail outlets normally patronized by foreign post employees and retail outlets in Ottawa, Canada (base city). The Ottawa retail outlets include a combination of those from the Consumer Price Index (CPI) sample and others for product types not included in the CPI sample.

The universe of commodities includes only those categories of products that have been agreed upon by the Canadian government and its employee associations.

The target population for the International Retail Prices and Costs Survey Individual Report Consumer Information (CIS) questionnaire is federal government personnel and agents posted to foreign locations. The questionnaire should be completed by a representative of each family at the post.

The target population for the post Pricing Schedule questionnaires is retail outlets normally patronized by foreign post employees and retail outlets in Ottawa-Gatineau, Canada (base city). Collection includes prices paid by post personnel for goods and services and identify the name of stores, outlets, or retailers where they shop. This includes restricted access outlets, e.g., diplomatic stores or tax-free sources and other locations used by these respondents. The Ottawa-Gatineau retail outlets include a combination of those from the Consumer Price Index (CPI) sample and others for product types not included in the CPI sample.

Only categories of products that have been agreed upon by the Canadian government and its employee associations are included on the questionnaire.

Instrument design

Questionnaires are subject to major revision when new weights are introduced, usually every four to five years. This permits the introduction of new products or additional specifications for categories of expenditure that are increasing in importance in a typical family expenditure pattern. Individual specifications may be revised annually to capture changing models, particularly those related to electronic products.

A program of visits to foreign locations is undertaken annually. The purpose of these visits is to explain the methodology and to gain first hand knowledge of the economic circumstances faced by Canadian expatriates. On-site discussion of the information requested in both the Individual Reports of Consumer Information and the price collection schedules serves to ensure that these questionnaires are relevant and elicit the data required to produce Post Indexes.

Sampling

This is a sample survey with a longitudinal design.

The target population is all Canada-based federal employees at a foreign location. The sample of retail outlets is a judgmental sample of available local retailers frequented by post personnel. Some 400 price specifications are included from the universe of retail items covering the specific basket of goods and services included in the survey. Some important criteria and considerations for designing a basket of goods and services are as follows: The item should be universally available at all locations because the same survey must be used at all posts. Availability may be a particularly constraining consideration in establishing baskets for international price comparisons because of the wide variation in markets, climates and products. The item should also be commonly purchased by Canadians and have some significance in their expenditure patterns. The item should be easy to identify and be amenable to reasonably precise description. Most of the price collection required in the conduct of a Post Index survey is undertaken by personnel at the post and not by trained price collectors. As a result, item specifications tend to be focused on basic items. Finally, items are neither included nor excluded on the basis of any moral or social judgments. They are included because they represent significant elements of reported average household expenditures.

Data sources

Responding to this survey is voluntary.

Data are collected directly from survey respondents.

Surveys are to be completed in a timely manner, subject to operational requirements of the Post being surveyed.

Collection dates are normally limited to a 1 to 2 week period during the month when a foreign location is scheduled for a survey. The general aim is for Post Index surveys to be carried out at each foreign post in sequence at about 30 to 36 month intervals. However, specific studies may be undertaken more or less frequently than this, depending on the volatility of retail price conditions in each particular country, the instability of exchange rates and the extent to which close monitoring of changes in the local retail price situation being faced by Canadian personnel can be achieved through reference to other statistical indicators.

Initial contact is made with Departmental headquarters, followed by confirmation from post administration. The surveys are distributed electronically for printing locally and the completed paper forms are returned by mail or through departmental channels. The collection is coordinated by post administration. Individual questionnaires, price schedules and supporting documentation are normally returned within one month of the survey being carried out. Direct follow up through the departmental headquarters and/or the post is undertaken by e-mail or telephone if the return of the survey is delayed. The same procedure is undertaken to obtain missing or delinquent portions of the survey when submitted in an incomplete fashion.

View the Questionnaire(s) and reporting guide(s).