Canadian System of Environmental-Economic Accounts - Physical Flow Accounts (PFA)
Detailed information for 2019
Physical flow accounts are one of the main elements of the United Nations System of Environmental-Economic Accounting which was adopted as an international statistical standard in 2012. These accounts record, in physical units of measure, the supply and use of natural inputs (e.g. cubic metres of water), products (e.g. terajoules of gasoline), and residuals (e.g. kilotonnes of carbon dioxide emissions).
Data release - December 13, 2021; March 23, 2022; June 6, 2022 (projected estimates for 2019 and 2020); December 19, 2022 (Water use; Environmental and clean technology product physical flow account linkage)
Statistics Canada's physical flow accounts (PFA) record the annual flows of natural resources, products and residuals between the Canadian economy and the environment. Data are presented to reflect the activities of industries, households and governments, and follow the classification system used in Statistics Canada's Supply, Use and Input-Output Tables (record 1401). The accounts use the same classifications and accounting methods as the System of National Accounts (SNA) to ensure that the data can be linked with the monetary data in the national economic accounts. Classification changes and other improvements were introduced in the SNA with the implementation of the new international standards published in SNA 2008. This 2012 historical revision to the Canadian SNA has resulted in substantial impacts on the supply and use tables published by Statistics Canada (see "Modernization of the Input-Output tables" in the Documentation section below). As a result, the new PFA tables are not fully comparable to previously published estimates for the period 1990 to 2008.
PFA reach their fullest elaboration in tables that record in physical units of measure both the supply and use of natural inputs, products, or residuals by industry and households. The Physical Supply and Use Tables (PSUT) mirror the structure of the supply and use tables in monetary terms that form the basis of the Supply, Use and Input-Output Tables, however the coverage goes beyond products to include natural inputs and residuals. According to the System of Environmental-Economic Accounting (SEEA), natural inputs are defined as "all physical inputs that are moved from their location in the environment as part of economic production processes or are directly used in production;" products are defined as "goods and services (including knowledge-capturing products) that result from a process of production;" and residuals are "flows of solid, liquid and gaseous materials, and energy that are discarded, discharged or emitted by establishments and households through processes of production, consumption, or accumulation." This extended coverage gives a fuller understanding of the linkages between the environment and the economy.
The implementation of the PFA in Canada has focused on specific elements of the physical supply and use framework rather than the full elaboration of the detailed PSUT structure outlined in the SEEA. Depending on the topic, the PFA can focus on the production of statistics on either supply (e.g. in the case of CO2 emissions) or use (e.g. in the case of water and energy use). This is done in an effort to streamline production and maximize the usefulness of the data. The pilot physical flow account for plastic material includes data on both supply and use.
To date, PFA have been developed for energy use, water use, and greenhouse gas emissions. A PFA for plastic material is currently in the pilot phase. These statistics are used in economic-environmental modeling, for studies on eco-efficiency, and resource and waste intensities, for environmental indicators and for trade negotiations related to environmental impacts. Compatibility with the traditional national economic accounts greatly facilitates the integration of the environmental data into macroeconomic models and analysis.
- Economic accounts
- Environmental and resource accounts
- Input-output accounts
Data sources and methodology
The Canadian economy.
This methodology does not apply.
Data are collected from other Statistics Canada surveys and/or other sources.
The Supply, Use and Input-Output Tables of the Canadian System of National Accounts provide balanced monetary supply and use tables that are also key data sources.
This information is compiled, integrated and analyzed as part of the process of producing physical flow estimates.
Major suppliers of data within Statistics Canada are the Environment and Energy Statistics Division and the Industry Accounts Division. Environment and Climate Change Canada is the main external data providers, with supplementary data sourced from other publicly available alternative data sources. More details on data sources are provided in the estimation section below.
This methodology does not apply.
This methodology type does not apply to this statistical program.
In the process of preparing statistical estimates, data from various sources are confronted, analyzed by subject-matter experts, and used to compile estimates that are consistent with other estimates in the Canadian System of National Accounts to provide a valid and coherent statistical picture of the subject matter. Consistency is a key feature of the statistics produced by the CSNA and the Physical flow accounts. Data in physical units of measure are confronted with the CSNA's monetary estimates to ensure this consistency. This integration process can lead to revisions to both the physical and the monetary source data, and helps improve the quality of both the source data and the resulting accounts.
This account describes the annual use of energy products by industry, governments, institutions and households. It covers the following energy sources: coal, natural gas, motor gasoline, diesel, aviation fuel, light fuel oil (including kerosene), heavy fuel oil, refinery fuel gas, coke oven gas, liquefied petroleum gases (including natural gas liquids), electricity, coke, steam, wood, and spent pulping liquor. The unit of measure is terajoule. Only uses of energy products for their energy content are published - the use of energy products as material inputs is not included in the energy use account (e.g. oil products used to produce plastics) but is available on request.
In general, energy surveys provide the data for large energy consumers. Where consumption data in physical units is not available, estimates are made based on expenditure data in the supply and use tables.
Statistics Canada's Report on energy supply-demand in Canada (RESD) provides the control totals for the consumption of the fuel types. It also provides the basic data for producer consumption and non-energy use of fuels. Statistics Canada's Industrial Consumption of Energy Survey provides detailed fuel consumption data for the manufacturing industries. This is combined with the RESD data to yield the estimates for manufacturing industries.
Data for mining, oil and gas extraction are benchmarked to the RESD totals with additional data added for energy transformation and producer consumption. Detailed fuel consumption data for the mining industries are taken from the Annual Mineral Production Survey produced by Statistics Canada.
Data for agriculture and construction are taken directly from the RESD and distributed across the various sub-industries according to the fuel expenditure data contained in the supply and use tables.
Transportation surveys provide fuel consumption data for airlines. This covers international use of aviation fuel by Canadian carriers in accordance with SEEA guidelines. Transportation surveys also provide fuel consumption data for rail and passenger bus and urban transit industries.
Motor gasoline and diesel purchases are benchmarked to the RESD but are distributed across industries according to expenditure data in the provincial supply and use tables. The use of provincial accounts controls for price variations across provinces. This is done to distribute retail pump sales which are not disaggregated by purchasing industry in the RESD and for which detailed physical consumption data by industry do not exist.
Data for household use of energy is taken directly from the RESD residential category, except for motor gasoline and diesel consumption, which is part of the retail pump sales distribution above.
Consumption of wood and spent pulping liquor is taken directly from the Industrial Consumption of Energy Survey.
GREENHOUSE GAS ACCOUNT
The greenhouse gas account covers annual emissions of the residuals carbon dioxide, methane, and nitrous oxide by industry, governments, institutions, and households. The unit of measure is kilotonnes.
As of January 2019, in addition to national data, preliminary estimates for the greenhouse gas emissions account are available for each province and territory.
The main data sources for the emissions estimates are the Energy Account and Canada's official greenhouse gas inventory and its associated National Inventory Report (NIR) published by Environment and Climate Change Canada (https://www.canada.ca/en/environment-climate-change/services/climate-change/greenhouse-gas-emissions/inventory.html).
The NIR is Canada's official government response to Canada's obligations under the United Nations Framework Convention on Climate Change (UNFCCC). It provides estimates of emissions for seven greenhouse gases from energy use, industrial processes and other sources. The reporting requirements of the UNFCCC differ from the methodological guidelines of the SEEA, and as such there are differences between the totals reported in the greenhouse gas account and Canada's official greenhouse gas inventory. A reconciliation table is included with the greenhouse gas account to explain these differences, which are also outlined in more detail below.
Greenhouse gas emissions estimates are calculated based on the energy use account data. Data from the NIR are also used, including emissions factors used to convert energy volumes to greenhouse gas emissions. The NIR also provides data on emissions from non-energy based sources such as some industrial processes and product use and fugitive emissions from agriculture, coal mining and the oil and gas industry. These are attributed to the appropriate industries using the detailed data tables that Environment and Climate Change Canada submits to the UNFCCC.
The differences between Canada's official greenhouse gas inventory and Statistics Canada's PFA are due to two main reasons: a) conceptual differences between the UNFCCC reporting guidelines and the SEEA; b) different data sources or lack of data preventing an accurate allocation of some types of emissions.
The largest conceptual difference between the NIR and the PFA is in the treatment of emissions stemming from the combustion of biomass (specifically wood and spent pulping liquor). UNFCCC guidelines exclude CO2 emissions from biomass combustion because this CO2 can also be absorbed through biomass production. SEEA guidelines focus on the estimation of emissions from economic units without accounting for the potential re-absorption of those emissions later.
Emissions from solid waste are the second largest conceptual difference. Emissions from landfill gas could be allocated to the waste management industry, but these emissions are not a result of current production: they represent releases associated with the decay of waste discarded in previous accounting periods. As such, they are not included in the greenhouse gas account since they would not vary with current period economic output and thus would not yield proper conclusions if used in conjunction with the supply and use tables for modeling purposes.
International aviation fuel purchases are the third largest conceptual difference. The UNFCCC requires airline emissions to be calculated based on the national territory. The SEEA requires that those emissions are based on the residence principle, meaning that the greenhouse gas account must include purchases and thus emissions of aviation fuel abroad by domestic airlines and exclude those purchases and related emissions of foreign airlines in Canada. The NIR total for emissions covers those that occur over Canadian territory regardless of the ownership of the airline, and excludes emissions of domestic aircraft abroad (although these are included elsewhere in the NIR for information purposes).
Four gases are covered in Canada's official greenhouse gas inventory that are not covered in the greenhouse gas account, namely HFCs, PFCs, SF6 and NF3. These are excluded from the PFA since there are no data available to allocate these emissions across industries and households. Several of these substances are refrigerants used in many industries, and attributing the leaks of the gases properly cannot be done with current data sources. The small amount of SF6 emissions is a result of processes in several distinct industries, and the data to do this allocation properly are also not available. Emissions from non-energy products from fuels and solvent use suffer from the same data gap.
Another conceptual difference is the inclusion in the PFA of prescribed burns in the forestry industry as an industrial process that is part of the production function for forestry. This is allocated to the Land Use, Land-Use Change and Forestry section of the NIR.
The final difference between the NIR and the greenhouse gas account relates to the consumption of motor gasoline and diesel. The UNFCCC guidelines exclude CO2 from biomass combustion (specifically ethanol and biodiesel) because this CO2 can also be absorbed through biomass production. The System of Environmental-Economic Accounting guidelines focus on the estimation of emissions from economic units without accounting for the potential re-absorption of those emissions later. In addition, Environment and Climate Change Canada treats all transportation activity as a separate sector in the NIR. The fuel use from this activity is modeled so that it can be attributed to different vehicle types for the calculation of emissions. The modeling process leads to different emissions estimates than those based on fuel consumption from the energy use account where the composition of the vehicle fleet is not known for each industry.
The remaining differences between Canada's official GHG inventory and the greenhouse gas account totals are due to differences in scope, data sources, emissions factors, etc.
The Water Account, produced every two years, describes the use of the natural resource input of water and of water accessed through municipal water supply or irrigation systems by industry, governments, institutions, and households. The account covers gross water use and the unit of measure is thousand cubic metres.
The main data source for this account is a set of three Statistics Canada surveys administered as the Industrial Water Use Survey. This set of surveys covers direct water intake and the use of municipal water by the mining, thermal power and manufacturing industries.
Data on water use by the agriculture industry is taken from two sources. The primary source is the use of water for irrigation in Alberta, the largest consumer of irrigation water, which is taken from estimates published by Alberta Agriculture and Rural Development. Other provinces are estimated based on the Agricultural Water Survey from Statistics Canada combined with precipitation measures for the growing season produced by Environment and Climate Change Canada. Water use for livestock is based on livestock estimates from Statistics Canada combined with water use coefficients for watering and cleaning provided by Agriculture and Agri-Food Canada.
Water use in the oil and gas industry is provided from the Canadian Association of Petroleum Producers. It includes both fresh and saline water used in oil and gas extraction.
Household water use is based on the municipal water supply from Statistics Canada's Biennial Drinking Water Plants Survey combined with an estimate from the producers of the proportion of this water supply that serves households. In addition, the water use of households not served by the municipal supply is estimated based on average household consumption figures.
Estimates of the amount of municipal water supply lost to leakage are based on historical data from Environment and Climate Change Canada's Municipal Water Use Database and more recent survey information from Statistics Canada's Biennial Drinking Water Plants Survey. This leakage amount is recorded as water use by the water supply industry.
The amount of municipal water use that is not residential and not assigned to industries in the Industrial Water Use Survey is distributed across the remaining industries based on expenditure data for water supplied through mains from the supply and use tables.
The Industrial Water Survey (IWS) did not collect information for the 2019 survey cycle because of the COVID-19 pandemic. Since the IWS is a key source of data for the water use account, water intake for manufacturing, mining and quarrying, and thermal-electric power generation industries were estimated through modelling for reference year 2019. For manufacturing industries (e.g., paper manufacturing, primary metal manufacturing), water intake was modelled with the help of an "eXtreme gradient boosting" model using energy consumption as an auxiliary variable. Meanwhile, water intake for industries related to the mining sector (i.e., coal mining, metal ore mining, and non-metallic mineral mining and quarrying) was estimated through various regression techniques, such as partial least squares, principal component analysis, and least absolute shrinkage and selection operator. Linear regression was used for the thermal-electric power generation industry.
PILOT PHYSICAL FLOW ACCOUNT FOR PLASTIC MATERIAL
The pilot physical flow account for plastic material comprises 17 variables - expressed in tonnes - that describe the production and fate of plastic products in the Canadian economy. The account includes breakdowns by product category, resin type, and province and territory. The table is currently produced as a pilot project with experimental estimates only. The following section briefly describes the variables in the account and outlines their predominant data sources and compilation methods.
The amount of plastic resin contained in products produced for Canadian consumption each year is calculated using a custom input-output model based on Statistics Canada's Supply and Use Tables, which is combined with data from its Canadian International Merchandise Trade Database, Annual Survey of Manufacturing and Logging Industries, and Industrial Producer Price Index to create a stable price time series to convert monetary values to physical quantities. The total is broken down into plastic in products produced domestically, and the plastic content of net trade, i.e. plastic in imported items less plastic in exported items.
The net stock of plastic in products that remain in use at the end of each year - i.e. the amount remaining in use from current year consumption less the plastic in discarded products purchased in previous years - is calculated in one of two ways. For products with adequate waste data, net plastic stock is calculated as the difference between produced plastic and plastic in discarded products (total discarded plastic). For the remainder of products, net plastic stock is determined using product lifetime and growth data from the capital stock program, and total discarded plastic is calculated as produced plastic, less net plastic stock.
Of total discarded plastic, a small fraction is leaked permanently to the environment - based on data from consulting reports - while the majority is collected by waste and recycling management systems. Of collected plastic, a fraction is diverted for material recovery and the remainder is directly sent for disposal. Of diverted plastic, a fraction gets sorted and baled for use by recyclers, and the remainder is sent for disposal. A fraction of sorted and baled plastic - adjusted for net trade - is converted into recycled plastic pellets and flakes ready for use in the production of new products, and the residual is sent for disposal.
The main data sources for collected, diverted, and baled plastic are Statistics Canada's Waste Management Industry Survey (WMIS), annual reports from industry associations, producer responsibility programs, and provincial waste and recycling programs.
For recycled plastic, the main data sources are focus reports (e.g. science journals, federal departments, non-government organizations, etc.), and to a lesser extent annual reports by provincial entities and industry associations. Due to the nature of available data, recycled plastic levels are estimated by applying resin-specific and process-specific recycling rate assumptions to baled plastic levels.
The total plastic in disposed waste is a control total for the sum of directly disposed plastic, primary processor residuals, and final processor residuals, which is derived by combining WMIS data with Environment and Climate Change Canada's National Waste Characterization Study. Total disposed plastic is broken down into the fraction landfilled or incinerated without energy recovery, and the fraction incinerated or gasified with energy recovery. The amounts in each stream are based on data from WMIS, in conjunction with reporting from provincial entities, industry associations, and focus reports.
PHYSICAL FLOWS BY FINAL DEMAND CATEGORY
In the final demand perspective, consumption and emissions by industry are attributed to the end-user of goods and services rather than the producer and can be referred to as indirect consumption and emissions. The results are derived from a hybrid input-output model that combines physical data by industry with economic data on production and consumption of goods and services. This distributes industrial emissions, energy use and water use across the categories of final demand that generate industrial activity. Note that the energy calculations include an adjustment to account for the production of electricity from fossil fuels which would be double-counted if both the electricity consumption and the fossil fuel consumption used to produce it were included in the model.
Final demand in the Canadian System of National Accounts is broken into the following categories:
Final consumption expenditure (comprised of Household consumption expenditure, Non-profit institutions serving households' consumption expenditure and Governments consumption expenditure), Gross fixed capital formation (comprised of Construction, Machinery and equipment, and Intellectual property products), Inventories, and Exports and imports. In the data table on physical flows by final demand category, Inventories are included in the category Gross fixed capital formation.
These data show the drivers of changes in industrial energy use, water use and greenhouse gas emissions based on the expenditures on goods and services according to the destination of demand. Direct energy use, water use and greenhouse gas emissions by households are included under the Household consumption expenditure category.
DIRECT PLUS INDIRECT INTENSITY
The direct plus indirect intensities are input-output multipliers derived from the supply and use tables. They are used to assess the effects on energy use and greenhouse gas emissions of an exogenous change in final demand for the output of a given industry.
They provide a measure of the interdependence between an industry, the rest of the economy, and the use of energy or production of greenhouse gas emissions.
Direct effects measure the initial requirements for an extra dollar's worth of output of a given industry. The direct effect on the output of an industry is a change in output equal to the change in final demand.
Indirect effects measure the changes due to inter-industry purchases as they respond to the new demands of the directly affected industries. This includes the chain reaction of output up the production stream since each of the products purchased will require, in turn, the production of various inputs. Note that the energy calculations include an adjustment to account for the production of electricity from fossil fuels which would be double-counted if both the electricity consumption and the fossil fuel consumption used to produce it were included in the model.
Induced effects measure the changes in the production of goods and services in response to consumer expenditures induced by additional households income (i.e., wages) generated by the production of the direct and indirect requirements.
The intensity indicators of the physical flow accounts are simple multipliers that capture the sum of direct and indirect effects. They are based on the assumption that households are exogenous and that there is no feedback between wages and production (i.e. there is no induced effect included in the calculation).
Simple multiplier = (direct + indirect effects) / $1 exogenous final demand
It is generally acknowledged that simple multipliers underestimate economic impacts since induced households activity is absent. They can be considered as lower bounds of multiplier effects.
LINKAGES BETWEEN SATELLITE AND PHYSICAL FLOW ACCOUNTS
Economic satellite accounts extend the core System of National Accounts to provide an expanded perspective on particular sectors, product categories, or activities. The linkages between satellite and physical flow accounts (PFA) produce estimates of annual energy use and greenhouse gas emissions associated with selected Statistics Canada economic satellite accounts. Combining energy use and greenhouse gas emissions data with these satellite accounts allows the analysis of year-over-year trends and changes in environmental impact of the economic sectors measured by the accounts. Data are currently produced for the Environment and clean technology products economic account (ECTPEA) with estimates for direct energy use and greenhouse gas emissions resulting from production activities for each product category in the account.
Estimates for direct energy use and greenhouse gas emissions associated with a satellite account are calculated by combining economic output by industry and satellite account category with energy use and greenhouse gas emissions intensities for each industry. The intensities are calculated by combining energy use and greenhouse gas emissions from the physical flow accounts with economic output from the supply and use tables (SUT). The preference is to use and combine source data at its level of published detail, and then aggregate the resulting linkages if necessary. Other levels of detail may be used to enhance data quality and maintain confidentiality.
In instances where a satellite account category does not adequately correspond to existing PFA or SUT industry classifications, estimates are produced using alternate methods. For the Electricity from nuclear and Electricity from renewable sources product categories in the ECTPEA-PFA linkage, energy use and greenhouse gas emissions are calculated as fractions of the energy use not directly related to electricity generation - and associated greenhouse gas emissions - for the overall power generating industry in each province. These fractions are calculated as the nuclear and renewable shares of total electricity generated in each province.
Where estimates for indirect energy use and greenhouse gas emissions are possible, satellite account values for demand are used to drive an environmentally-extended input-output model, which returns the energy use and greenhouse gas emissions associated with the total output required from each industry to satisfy the specified demand. The model is consistent with the ones used to produce other Statistics Canada input-output products.
The quality of the estimates produced is ascertained using time series consistency analysis, as well as analysis of the coherence of the estimates with current economic events and with related data from other programs. Issues arising from the source data are also identified and corrected where appropriate.
Statistics Canada is prohibited by law from releasing any information it collects which 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. The physical flow accounts follow the confidentiality patterns used in the supply and use tables and other source data for any commodities measured.
Revisions and seasonal adjustment
Energy and greenhouse gas accounts are updated annually. Water accounts are produced every two years, following the cycle of the Industrial Water Use Survey. The plastics account is a pilot project, which does not yet have a revision schedule.
Preliminary estimates for energy use, greenhouse gas emissions and water use are produced for reference years that do not yet have a complete supply and use table available for the expenditure based allocations. In all cases where a preliminary estimate is required, the most recent supply and use table is used to provide proportional allocations across industries without physical survey data. These preliminary estimates are revised upon publication of the supply and use table for that reference year.
In addition, the greenhouse gas account is revised each time there are revisions to Environment and Climate Change Canada's National Inventory Report. These revisions are generally related to changes in methodology required by the United Nations Framework Convention on Climate Change or follow from improved methods, models, or data being used in the compilation of the NIR.
Seasonal adjustment is not necessary given that the calculations of physical flow estimates are only performed on an annual basis.
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. In general, the data derived from survey data and final supply and use tables are considered to be reliable. The preliminary tables are considered reliable in terms of totals and for industries and sectors that have available survey data (generally electric power, manufacturing, mining, agriculture, households, and some transportation industries). Preliminary estimates based on expenditure data from previous years should be used with caution.
- Methodological Guide: Canadian System of Environmental-Economic Accounting
The Methodological Guide: Canadian System of Environmental-Economic Accounting provides readers with information on environmental-economic accounts at Statistics Canada. It provides links to produced data and publications and describes the concepts, sources, and methods used to compile them.
Last review: January 16, 2017
- User Guide: Canadian System of Macroeconomic Accounts
This guide provides a detailed explanation of the structure, concepts and history of the Canadian System of Macroeconomic Accounts.
Last review: June 22, 2018
- Modernization of the Input-Output Tables