Foreign Affiliate Trade Statistics (FATS)

Detailed information for 2008

Status:

Active

Frequency:

Annual

Record number:

1539

The series on foreign affiliate trade statistics cover the sales and employment data of Canadian majority-owned foreign affiliates abroad.

Data release - August 6, 2010

Description

The series on foreign affiliate trade statistics (FATS) cover the sales of goods and services and employment data of Canadian majority-owned foreign affiliates abroad (excluding the banks). At this time, the Canadian FATS series do not cover foreign-owned affiliates that reside in Canada.

Selling goods or services through foreign affiliates is a means for Canadian companies to market their products internationally. In the case of goods, the products sold by foreign affiliates may be produced in Canada or produced abroad.

In order to be consistent with the international practice for measuring foreign affiliate trade statistics, only the data for majority-owned foreign affiliates (MOFA's) are included. For operational reasons, depository institutions and foreign branches of firms were excluded from the estimates. Sales and employment figures of non-bank MOFA's are fully attributed- there is no adjustment for less than 100% ownership.

Data concerning FATS are needed to negotiate and monitor trade and investment agreements. These data are also needed to meet Canada's statistical obligations to supranational organizations, such as the Organization for Economic Co-operation and Development (OECD).

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.

The Non-resident Sector Program is a component of the Canadian System of National Accounts (CSNA). The linkage is possible because the standards and conventions used to establish the Canadian residency of the transactors and to compile the transactions of Canadian residents with non-residents are identical to those used in the CSNA.

Subjects

  • Balance of international payments
  • Economic accounts
  • Government financial statistics

Data sources and methodology

Target population

The universe for Canada's foreign affiliate trade statistics is comprised of foreign affiliates abroad that are majority-owned (i.e. more than 50% of the voting shares) by a business that resides in Canada. For operational reasons, depository institutions and foreign branches of Canadian firms are excluded.

Instrument design

The questionnaire BP-59 (Capital invested abroad by Canadian enterprises - annual), which is used to collect data on Foreign Direct Investment Abroad, incorporates specific questions for compiling Canada's foreign affiliate trade statistics.

Sampling

The BP-59 questionnaire, which contains some questions on foreign affiliate trade statistics as well as other questions about Canadian investment abroad, is sent to Canadian enterprises known to have or believed to have a direct investment relationship (i.e. 10% or more of the voting equity or equivalent) in one or more non-resident corporations, partnerships or joint ventures. For the FATS statistics, only the majority-owned foreign affiliates are included. Foreign affiliates that are not majority-owned, but are at least 10% owned by a Canadian enterprise, are included in Canadian direct investment abroad positions nonetheless. See record number 1537 for more information about Canada's international investment position.

Roughly 1,800 firms receive the BP-59 questionnaire (Capital invested abroad by Canadian enterprises), about half of which are surveyed annually and the other half of which are surveyed once every 3 years. The survey is believed to cover close to 100% of the target population.

Enterprises reporting moderate amounts of foreign direct investment are rotated in a three year cycle in the annual sample whereas enterprises reporting larger amounts are included in the sample each year. For those companies that are part of the three year cycle for sample rotation, the most recent reported values are carried forward during the two years a company is out of sample.

Data sources

Responding to this survey is mandatory.

Data are collected directly from survey respondents and derived from other Statistics Canada surveys.

Data are collected annually, via questionnaire; response is mandatory for the surveyed entities. The questionnaires are sent out in February of the year following the reference year. Respondents are instructed to send their completed questionnaires to the Balance of Payments Division within four weeks of receipt. A follow-up is done after an additional two weeks if no response is received. There are three additional follow-ups performed one month apart from each other. Data from this questionnaire accounts for 100% of the foreign affiliate trade statistics estimates.

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

Error detection

The raw data received from questionnaire respondents are submitted to edits to ensure consistency and coherence. Historical edits compare data from the latest period to data from earlier reference periods. When necessary, there is follow up with the respondent to verify or correct the data.

There is a manual comparison at an aggregate level with values from previous periods. When necessary, the manual comparison is made at a micro level.

Imputation

When employment is not reported, but sales and book value of long term investment is available, employment is imputed as a function of sales and book value of long term investment.

When sales are not reported, but employment and book value of long term investment is available, sales are imputed as a function of employment and book value of long term investment.

When neither sales nor employment are reported, but book value of long term investment is available, sales and employment are imputed as a function of book value of long term investment.

When neither sales nor book value of long term investment are reported, but employment is available, sales are imputed as a function of employment.

When neither employment nor book value of long term investment are reported, but sales are available, employment is imputed as a function of sales.

Data from companies' annual reports are also sometimes used to help impute for non-response.

Estimation

Consistent with a census, the number of sampling units by sector is considered to be completely known. Therefore, total non-response for a unit is dealt with by re-weighting the units that do respond in order to generate an estimate for the target population.

Quality evaluation

Before publishing, the final estimates are compared to the pre-imputation data. Any significant differences are investigated, and if necessary adjustments are made when the imputation or estimation process results are judged to be unacceptable.

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

At the time of publication, data for the four preceding years are subject to revision.

Seasonal adjustment is not applicable to annual data series.

Data accuracy

Non-sampling errors - While considerable effort is made to ensure high standards throughout all stages of collection and processing, the resulting estimates are inevitably subject to a certain degree of non-sampling error. Examples of non-sampling error are coverage error, data response error, non-response error and processing error.

Coverage error can result from incomplete listing and inadequate coverage of the population of Canadian transactors that engage in international direct investment.

Data response error may be due to questionnaire design, the characteristics of a question, inability or unwillingness of the respondent to provide correct information, misinterpretation of the questions or definitional problems.

Non-response error is related to respondents that may refuse to answer, are unable to respond or are too late in reporting. In these cases, data are imputed. The extent of any imputation error decreases with increases in the response rate and attempts are therefore made to obtain as high a response rate as possible. The response rate for the BP-59 questionnaire, which is used to collect foreign affiliate trade statistics, is close to 50%. When the respondents are weighted based on key financial variables, the response rate is over 60%. Analysts keep in contact with the respondents to try to maximize the response rate. Slow reporting is often an issue.

Processing error may occur at various stages of processing such as data entry, editing and tabulation. Measures have been taken to minimize these errors. Data entry and edit are performed simultaneously due to the spreadsheet design which allows errors to be quickly seen. Historical ratios also aid in eliminating outliers created by data entry. Tabulation is automated to eliminate human error.

Documentation

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