National Income and Expenditure Accounts
Detailed information for fourth quarter 2000
Status:
Active
Frequency:
Quarterly
Record number:
1901
The National Income and Expenditure Accounts (IEA) give a comprehensive statistical picture of Canadian economic developments.The Income and Expenditure Accounts are the centre of macroeconomic analysis and policy-making in Canada.
Data release - February 28, 2001
Description
The Income and Expenditure Accounts are the centre of macroeconomic analysis and policy-making in Canada. They are used in a broad assortment of applications by a wide range of persons and groups in society. They are a means by which Canadians can view and assess the performance of the national and provincial economics. The accounts provide both a planning framework for governments and a report card on the results of the plans that governments carry out.
The National Income and Expenditure Accounts (IEA) give a comprehensive statistical picture of Canadian economic developments. The focus is on Canada's Gross Domestic Product (GDP) and four major sectors of the economy: households, businesses, governments and non-residents including such components as consumer spending, business investment, exports, labour income, corporation profits, farm income, government spending and prices. Provincial distributions are provided for several aggregates and there is a thorough financial statement for the various levels of government in Canada.
The income-based estimates show factor incomes (that is, earnings accruing to labour and capital) generated as part of the production process. The largest source of factor income is wages, salaries and supplementary labour income, accounting for over half of GDP. The other income components are corporation profits before taxes, interest and miscellaneous investment income, the accrued net income of farm operators from farm production, net income of non-farm unincorporated business, including rent, and the inventory valuation adjustment. Together these six aggregates add up to Net Domestic Income at Factor Cost. GDP at Factor Cost is derived by adding capital consumption allowances, and GDP at Market Prices is calculated by adding indirect taxes (such as sales and excise taxes) less subsidies (such as payments to farmers) and the statistical discrepancy.
In the expenditure-based estimates, GDP is broken down into the categories of final purchases of goods and services. The major aggregate is personal expenditure on consumer goods and services, accounting for close to 60% of GDP. Government current expenditure on goods and services is a second component and government and business investment spending is a third. The sum of these components of the summary expenditure account is referred to as final domestic demand. To move from final domestic demand to GDP, the value of physical change in inventories, net exports of goods and services (that is, exports minus imports) and one-half of the statistical discrepancy are added.
Estimates are available on a nominal basis and in constant dollars (using the Lapseyres index formula).
Statistical activity
The Canadian System of National Accounts (CSNA) provides a conceptually integrated statistical framework for studying the state and behavior of the Canadian economy. The accounts are centered on the measurement of activities associated with the production of goods and services, the sales of goods and services in final markets, the supporting financial transactions, and the resulting wealth positions.
To produce financial statistics, the CSNA measures the economic dimensions of the public sector of Canada, including the financial inter-relationships among the thousands of entities that make up the three levels of government in Canada (federal, provincial and territorial, and local). In order to carry out this program, the CSNA maintains a universe of all public sector entities including their complex inter-relationships.
Collection period: 2 months after the reference quarter; 5 months after the reference year.
Subjects
- Economic accounts
- Gross domestic product
- Income and expenditure accounts
Data sources and methodology
Target population
The Canadian economy (households, non-profit institutions serving households', governments, financial corporations, non-financial corporations, and non-residents).
Instrument design
This methodology does not apply.
Sampling
This methodology does not apply.
Data sources
Data are collected from other Statistics Canada surveys and/or other sources.
The IEA measure of macroeconomic activity on a quarterly basis, as represented by income and expenditure-based GDP, relies heavily on a wealth of information from various areas of Statistics Canada. A large amount of information from various survey divisions within the bureau, along with other data, is compiled, integrated and analysed as part of the complex process of arriving at GDP and its component categories and underlying sector accounts.
Major suppliers of data within Statistics Canada include: Agriculture Division, Investment and Capital Stock Division, Income Statistics Division, International Trade Division, Distributive Trades Division, Manufacturing, Construction and Energy Division, Industrial Organization and Finance Division, Labour Division, Prices Division, Public Institutions Division, and Tax Data Division. Numerous external and administrative sources of data are also used.
Error detection
This methodology type does not apply to this statistical program.
Imputation
This methodology does not apply.
Estimation
At the heart of the System of National Accounts is the concept of 'economic production'. Gross Domestic Product is designed explicitly to measure the value of the nation's total production of goods and services. But, in arriving at this total, the tables also provide a statistical picture of the structure and functioning of the economy - of the composition and use of the nation's production, and of the various types of income which are generated in the process. Going a stage further, the broad income and expenditure estimates are further broken down to show how the various sectors of the economy (businesses, persons, governments and non-residents) interact in their transactions with one another to produce this output. In other words, beginning from the basic concept of production, it is possible to build up a major system of statistics which traces the flow of all income and expenditure transactions underlying the production and the distribution of the nation's total output. In the present system, both the 'national' and 'domestic' concepts are in use. The Gross National Product measures the the earnings of all Canadian factors of production regardless of where located. The Gross Domestic Product measures only the production originating within the geographic boundaries of Canada, whether the factors of production are owned by Canadians or non-residents.
It is possible to measure the unduplicated value of production in three separate ways. The first is simply to sum all of the factor incomes (wages and salaries, and profits) generated by this productive activity - incomes representing the returns to the labour and capital employed. The second approach is to sum all sales which firms have made to final users - to consumers, to governments, to business on capital account, or in export markets. This approach also provides an unduplicated value of total production. Imports, of course, have to be deducted from this summation since they are implicitly included in these final sales and should not be counted as a part of Canadian production - they represent part of the production of a foreign country. Sales from one firm to another (intermediate production) are not counted since to do so would involve double counting, all intermediate production being embodied in final output sold to users. This 'sales to final users' (or 'sum of expenditures') approach yields the same value of production as the 'sum of incomes' approach. Finally, the unduplicated value of production can be measured by taking the gross value of production of each firm and subtracting from this each firm's costs of production in the form of its purchases from other firms (including imports), to yield the 'net value added' to production by the firm. This procedure also yields the same 'unduplicated value of production' as is achieved under the first two approaches. Essentially, in the National Income and Expenditure Accounts, only the first two approaches - the 'sum of incomes' and the 'sum of sales to final users', are used to measure Gross Domestic Product. The third approach, the 'sum of net values added', is not a central feature of the National Income and Expenditure Accounts, but it is extensively used in other, related, systems of economic statistics where it serves to measure output in individual industries and where the primary data consist of gross values of production and operating costs.
Quality evaluation
Data are analysed for time series consistency, links to current economic events, issues arising from the source data, and with respect with coherence. As well, the discrepancy between the estimates of income and expenditure-side GDP is assessed.
It is not possible to produce an equivalent to the income or expenditure accounts except at the aggregate level. At the level of GDP, the unduplicated value of production can also be measured by taking the gross value of production of each firm and subtracting each firm's intermediate inputs in the form of its purchases from other firms (including imports) to yield the `net value added' to production by the firm. Estimates of this type are produced in the annual Input-Output tables, as well as in the monthly industry-based estimates of GDP. Real GDP estimates can then be compared with the results of the monthly GDP by Industry program. Annually, the income and expenditure data are benchmarked to the Input-Output Accounts.
Certain components of income and expenditure-based GDP can be obtained in survey divisions, but typically the data are not directly comparable. For example, the variable "corporate profits" is published in the Quarterly Financial Statistics release, but it differs from the income-based GDP measure due to certain national accounts' concept adjustments.
Disclosure control
Statistics Canada is prohibited by law from releasing any information it collects that 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.
In order to prevent any data disclosure, confidentiality analysis is done using the Statistics Canada Generalized Disclosure Control System (G-Confid). G-Confid is used for primary suppression (direct disclosure) as well as for secondary suppression (residual disclosure). Direct disclosure occurs when the value in a tabulation cell is composed of or dominated by few enterprises while residual disclosure occurs when confidential information can be derived indirectly by piecing together information from different sources or data series.
Revisions and seasonal adjustment
Revisions -- Data are released within 60 days after the reference period. Estimates for each quarter are revised when those for subsequent quarters of the same year are published. At the time of the first quarter of each year, revisions are made back four years. They are not normally revised again except when historical revisions are carried out, usually once per decade. Statistical revisions are carried out in order to incorporate the most recent information from quarterly and annual surveys, taxation statistics, public accounts, censuses, etc., as well as from the annual benchmarking process of the Input-Output Accounts.
Seasonal adjustment - Almost all series of the quarterly IEA are seasonally-adjusted. Seasonal adjustment is generally made at the lowest level of aggregation, and seasonally-adjusted aggregates are obtained by summation. Statistics Canada's X-11 ARIMA is used to seasonally adjust series.
Data accuracy
The accounts are designed as a double-entry system in which the income- and expenditure-based GDP totals should, in principle, be identical. In fact, a difference virtually always arises between them due to errors in the source data, imperfect estimation techniques, differing seasonal adjustment methods and discrepancies in the time at which the incomes and expenditures are recorded.
The size of the discrepancy, which stems from the estimation procedure, is one gauge of the system's overall reliability. However, it is only a partial gauge.
No direct measures of the margin of error in the estimates can be calculated. The quality of the estimates can be inferred from analysis of revisions and from a subjective assessment of the data sources and methodology used in the preparation of the estimates.
Documentation
- Glossary
This glossary is valid from third quarter 2000 to fourth quarter 2001. - Latest Developments in the Canadian Economic Accounts
For further information please refer to "Latest developments in the Canadian economic accounts", Statistics Canada, Catalogue no. 13-605-X.
The side bar menu of this electronic publication includes: chronology of events, conceptual changes, classification changes, and data revisions. - National Income and Expenditure Accounts Volume 3: A Guide to the National Income and Expenditure Accounts (Definitions-Concepts-Sources-Methods)
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