Longitudinal Employment Analysis Program (LEAP)

Detailed information for 2001 to 2017

Status:

Active

Frequency:

Annual

Record number:

8013

The Longitudinal Employment Analysis Program (LEAP) is a database that contains annual employment information for each employer business in Canada, starting with the 1983 reference year.

Data release - The data are not available to the public because the individual observations are confidential under the Statistics Act. Summary tabulations can be found on CANSIM. Custom tabs are available through the Economic Analysis Division.

Description

The Longitudinal Employment Analysis Program (LEAP) is a database that contains annual employment information for each employer business in Canada, starting with the 1983 reference year. The information in LEAP is generated from the annual statements of remuneration paid (T4 slips) that Canadian businesses are required to issue to their employees for tax purposes. LEAP covers incorporated and unincorporated businesses that issue at least one T4 slip in any given calendar year, but excludes self-employed individuals or partnerships where the participants do not draw salaries. The LEAP has the advantage of covering all sectors of the economy-though some of the information is more meaningful for the business sector than the public sector.

Using the information gathered by Statistics Canada's Business Register, the administrative data in LEAP are structured at the level of the statistical enterprise, which is the level associated with a complete set of financial statements (see record no. 1105).
The LEAP database contains two sets of files: one gives the national profile and the other gives the provincial profile of each employer. The national file contains one record per firm. The provincial file contains one record per firm for each province or territory in which the firm issues some T4 slip(s). Both national and provincial files contain industry, annual payroll and annual employment.
This payroll and employment information is then organized longitudinally, that is, each observation on the database corresponds to a particular enterprise whose employment, payroll and industry characteristics are recorded at different points in time. The longitudinal nature of LEAP allows entry and exit times to be measured with precision. Entrants in any given year are enterprises that have current payroll data, but that did not have payroll data in the previous year. Similarly, exits in any given year are identified by the absence of current payroll data, where such data had existed in the previous year.

The LEAP file has traditionally been used to support research on business and employment dynamics. It is the primary source for studies on employment creation and destruction, by firm size, industry, province and territory in Canada.

Subjects

  • Hours of work and work arrangements
  • Industries
  • Labour
  • Wages, salaries and other earnings

Data sources and methodology

Target population

The target population of LEAP is every employer in Canada whether incorporated or not. This universe consists of every business that issued one or more annual statements of remuneration paid for tax purposes (a T4 slip). The self-employed that do not draw a salary are not included in this universe, and thus are not counted in LEAP. Businesses comprised solely of individuals or partnerships that do not draw a salary are also excluded. LEAP is a longitudinal file of enterprises, not establishments.

Instrument design

This methodology does not apply.

Sampling

LEAP is a longitudinal file of all the enterprises that issued at least one T4 slip.

Data sources

Data are extracted from administrative files and derived from other Statistics Canada surveys and/or other sources.

LEAP is constructed using three sources of information: T4 administrative data received from Canada Revenue Agency, data from Statistics Canada's Business Register (see record no. 1105), and data from Statistics Canada's Survey of Employment, Payrolls and Hours (SEPH, see record no. 2612).
The estimated employment for each enterprise on LEAP is based on the payroll as reported to Canada Revenue Agency. Two measures of employment are available: the Average Labour Unit (ALU) and the Individual Labour Unit (ILU). The payroll is converted to ALU using conversion factors derived from the SEPH. The ILU measure is generated using only the payroll information reported by enterprises. The LEAP tracks businesses through time by linking yearly T4 employment data records with enterprise information on Statistics Canada's Business Register.

Error detection

The creation of the LEAP database requires considerable effort in distinguishing 'real' entries and exits from 'false' ones. Real entries and exits reflect actual demographic events (the creation of new enterprises and the failure of existing ones); false entries and exits may simply reflect organizational restructuring within an enterprise, or a change in its reporting practices. These false entries and exits are identified, and then corrected on the file, using a method of 'labour tracking'. The cluster of workers that are associated with each newly identified enterprise is compared with the clusters of workers in enterprises existing in the previous year. Similarly, the clusters of workers in no longer identified enterprises are compared with the clusters of workers in all enterprises existing in the following year. These comparisons identify pairs of businesses that are potentially related from one year to the next but have different identifiers. If the pairs share the same (or a similar) name or Business Number, they are reconciled into a single identifier that is maintained for the enterprise records for all years.

Imputation

This methodology type does not apply to this statistical program.

Estimation

In Canada, employing businesses are required to register with Canada Revenue Agency using the Business Number and issue to each of their employees a T4 slip that summarizes earnings received in the year. This process creates a link between the employee and the business through the Business Number. This link is the backbone of LEAP, and the reported payroll allows estimates of annual employment to be made. The payroll is converted to employment (called ALUs or Average Labour Units) using conversion factors derived from the Survey of Employment, Payroll and Hours.

The Average Labour Unit (ALU) is a calculated measure portraying the average employment represented by a business's annual payroll if it paid the average earnings typical in its particular 4-digit NAICS industry, province and business size category. The ALU is calculated by converting each business's annual payroll into an approximation of the annual average level of employment it represented. The ALU employment estimate is derived by dividing the business's annual payroll (from T4 system) by the corresponding industry/province/size class average annual earnings per employee (from SEPH).

Another employment measure is also available in LEAP: the Individual Labour Unit (ILU). The ILU is closer to a head count-every individual who received at least one T4 slip in a given year is assigned 1.0 ILU. If individuals worked for different firms during the year, their 1.0 ILU is split proportionately across firms according to the share of their total annual payroll earned in each.

Quality evaluation

The results are compared to other estimates of employment for verification purposes.

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.

Revisions and seasonal adjustment

The LEAP database is updated annually with the addition of another year of data. The longitudinal information may change with each annual update as the state of enterprises changes with time. Also with each annual update some quality control work is done which may cause changes to the cross sectional files.

Data accuracy

Some industries, mostly in the government sector, are not accurately represented at the four digit NAICS industry level. For example, firms such as municipal police forces and transit systems often cannot be separated out from the larger corporate structure of the municipality.

Caution should be exercised in comparing data in the file before and after 1991 as there are some differences in the way the employment was determined. Data from SEPH is used to calculate the average annual earnings in each industry, province, and firm size class. Prior to 1991, this SEPH data was based on the SIC system of industry classification. In 2001, SEPH started using the NAICS system but only converted their data to NAICS going back to 1991. In LEAP, these two systems each cover a different time period. The old SEPH system with the SIC industry codes is available for years 1983 to 2000. The current SEPH system using NAICS codes covers years 1991 to the present. These two systems can be reconciled for large industry groups only.

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