Establishment

Status: This standard was approved as a departmental standard on February 21, 2018.

Definition

Establishment refers to the level in the statistical hierarchy below the company in the Business Register statistical hierarchy, and at which the accounting data required to measure production are available (principal inputs, revenues, salaries and wages). The establishment is defined as the most homogeneous unit of production for which the business maintains accounting records. From these records, it is possible to assemble all the data elements required to compile the gross value of production (total sales or shipments, and inventories), the cost of materials and services, and labour and capital used in production.

Usage

All active enterprises operating in Canada -- including businesses, organizations or partnerships with a Business Number registered with the Canada Revenue Agency (CRA), and also any sole proprietors reporting personal business income -- have at least one establishment on the Business Register. An establishment can have one or more locations, but belongs to only one company.

Conformity to relevant internationally recognized standards

This standard is compatible with the definition of Establishment presented in the United Nations Economic Commission for Europe (UNECE) "Guidelines on Statistical Business Registers", 2015. The UNECE considers an establishment to be equivalent to a 'local kind-of-activity unit', and is considered to be a main statistical unit. In the definition of establishment, the UNECE details establishment as a unit that can be partitioned by either physical location or activity. The "Guidelines on Statistical Business Registers" provides the following definition for Establishment:

Establishment - an enterprise or part of an enterprise that is situated in a single location and in which only a single (non-ancillary) productive activity is carried out or in which the principal productive activity accounts for most of the value added. (Source: Guidelines on Statistical Business Registers, 2015. Page 7)

This standard is also compatible with the multilateral "System of National Accounts 2008", 2009. Like the UNECE, the SNA also considers an establishment as a single activity unit, although the SNA recognizes that in practice that secondary activities may be carried out by an establishment. Similarly for the physical location of an establishment, while the SNA defines an establishment as a single-location unit, it also recognizes that an establishment may have other nearby locations. The SNA provides the following definition of an establishment:

An establishment is an enterprise, or part of an enterprise, that is situated in a single location and in which only a single productive activity is carried out or in which the principal productive activity accounts for most of the value added. (Source: System of National Accounts 2008, 2009. Page 87)

Relation to previous version

• Establishment February 21, 2018 to current

  This standard replaces the previous standard for establishment. The previous standard did not situate establishment within the Business Register statistical hierarchy. The current standard changes this, and defines establishment within the Business Register statistical hierarchy.

• Establishment July 15, 1998 to February 20, 2018

  This was the departmental standard from July 15, 1998 to February 20, 2018.