Activities of Canadian Multinational Enterprises Abroad

Activities of Canadian Multinational Enterprises Abroad
Variable(s)
Summary of changes
Other reference periods
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Detailed information for 2022

Status:

Active

Frequency:

Annual

Record number:

1539

This program measures outward foreign affiliates statistics (FATS) such as sales of goods and services, employment levels and the assets and liabilities of Canadian multinational enterprises abroad.

Data release - December 7, 2023 (preliminary); December 6, 2024 (actual)

Description

This program measures the sales of goods and services, employment levels and the assets and liabilities of Canadian multinational enterprises abroad. Throughout this document, the terms "Canadian majority-owned affiliates abroad", "(Canadian) majority-owned foreign affiliates (abroad)" and "MOFAs" refer interchangeably to Canadian multinational enterprises abroad.

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

Under this program, the Activities of Canadian Multinational Enterprises Abroad, assets and liabilities held by Canadian multinationals' subsidiaries operating abroad are primarily compiled on a consolidated accounting basis. This uses the Booked Worldwide by geographic location concept, which excludes Canadian multinationals' investment in their foreign subsidiaries at the headquarter level. If consolidated balance sheet data are not available, then unconsolidated data may be used when producing final estimates.

Assets and liabilities held by operations in Canada, as reported under the Activities of Multinationals in Canada program, are compiled under the Booked in Canada concept, which measures all transactions that originate in Canada. This includes Canadian multinationals' investment in their foreign subsidiaries. Therefore, assets and liabilities held by Canadian multinationals abroad and by Canadian multinationals in Canada are based on different accounting concepts and comparing both should be done with caution. Other economic activities such as employment or sales in Canada and outside Canada can be added to derive the worldwide totals.

The Activities of Canadian Multinational Enterprises Abroad program incorporates changes starting with reference year 2018. Previously, the data were largely derived from a weighted sample survey. The population of majority-owned affiliates of Canadian multinational enterprises abroad is now covered by supplementing unweighted survey data with administrative and publicly available data.

Reference period: Calendar year

Collection period: The collection period is generally from April to November of the year after the reference period.

Subjects

  • Economic accounts

Data sources and methodology

Target population

The universe for this program 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.

In order to be consistent with the international practice for measuring foreign affiliate trade statistics, only the data for majority-owned foreign affiliates (MOFAs) are included. Sales and employment figures of MOFAs are fully attributed; there is no adjustment for less than 100% ownership.

Instrument design

The questionnaire BP-CIA (Canadian Investments Abroad), which is used to collect data on Foreign Direct Investment Abroad, incorporates specific questions for compiling the data on Canada's majority-owned foreign affiliate statistics.

The survey was last redesigned in 2011 and went through extensive testing through the Questionnaire Design and Research Centre. Field testing with respondents was also conducted.

Sampling

For reference years 2018 onwards, sampling is no longer applicable to the Outward FATS program.

Data sources

Responding to this survey is mandatory.

Data are collected directly from survey respondents.

Starting with reference year 2018, data from the Canadian Investment Abroad (BP-CIA) survey are supplemented with information from administrative data, Canadian Mining Assets (Natural Resources Canada, Lands and Minerals Sector, Industry and Economic Analysis Division) and publicly available information (e.g. annual reports). For roughly 100 large cases, data on financial and employment variables, by country, from published annual reports are integrated into the processing system.

The following administrative data sources from the Canada Revenue Agency are used in the data compilation process:

T2 schedule 9 - Related and Associated Corporations
T106 - Information Return of Non-Arm's Length Transactions with Non-Residents
T1134 - Information Return Relating To Controlled and Non-Controlled Foreign Affiliates

Survey data, tax schedules (T2 schedule 9, the T106, and the T1134) and other administrative data are used purely to produce descriptive statistics on multinational enterprises at aggregated levels.

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

Error detection

The data received from questionnaire respondents are subject to edits during data collection, data capture, and data processing to ensure consistency and coherence.

Many types of edits are performed at the micro level:

-edits built-in to the electronic questionnaire to flag extreme values, missing values, as well as consistency edits between questionnaire sections;

-edits in the capture system for mandatory fields (primarily applies to paper questionnaire);

-edits in the processing system to flag period over period consistency issues, and non-mandatory fields.

When necessary, there is follow up with the respondent to verify or correct the data.

Macro edits are also performed:

-Further time-series analysis at the macro leads to analysis at the micro level, which may lead to micro edits and follow-up;

-Administrative and external data sources are also used at the macro level for data confrontation to provide additional error detection.

Imputation

The imputation process examines the relationship between foreign direct investment and Canadian majority-owned foreign affiliate variables such as sales and employment to impute the missing values. If all the variables for a given record contain missing information, then that unit is considered to be a non-respondent. In this case a re-weighting takes place in order to account for this unit in the estimates.

For some non-responding units that are deemed to be significant in terms of their overall contribution to the estimates (based on either previously reported data or publicly available information), data is researched on a case-by-case basis and estimated largely from information contained in their annual reports, financial statements or websites.

Estimation

For direct investment, population parameters are defined by historical survey data together with tax data that indicates international activity. This is done at the enterprise level, which is linked to the central Business Register.

The reported values for sampled units are multiplied by a sampling weight in order to provide an estimate for the entire population. The sampling weight is calculated based on certain factors, such as the probability for a unit to be selected in the sample and that responding units will have to represent sampled units that did not respond.

Quality evaluation

Before the Canadian majority-owned foreign affiliate data are published, several steps are taken to ensure the quality of the estimates.

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.

Counterpart data submitted to supranational organizations by national statistical agencies are also confronted, along with other sources such as the financial press, business publications and company reports.

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

At the time of publication, data for the two preceding years are subject to revision. The data are not normally revised again except when comprehensive revisions are carried out.

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. Coverage from tax data is comprehensive and greatly limits coverage error.

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-CIA questionnaire, which is used to collect foreign affiliate trade statistics, is around 70%. 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 questionnaire 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.

Direct investment surveys have response rates of approximately 70%-75%.

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.

Total non-response is defined as units that did not answer the questionnaire. In order to limit total non-response, total non-response units were examined and every effort was made to impute values for them.

Documentation

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