1 Introduction

Printable version (PDF) of Chapter 1 (June 30, 2008)

The purpose of the guide

1.1 This guide is the fourth of its type in the 60-year history of the Income and Expenditure Accounts (IEA). It is also the latest addition to the methodological documents on the Canadian System of National Accounts. It aims at improving users' understanding of national accounting, in particular of the sources and methods of the IEA. It undertakes the detailed task of explaining the how's and the why's of gross domestic product and its components, as a means of strengthening macroeconomic analysis. This guide also gives analysts a sense of how the IEA fit into the national accounts as a whole, with reference to related accounts and data throughout the document. Further, the guide enables readers to bridge the gap between Canadian and international terminology, with references to international standards, terms and conceptual treatments.

1.2 This guide is structured logically around the concepts, sources and methods used in the sum of incomes and sum of expenditures approaches to deriving gross domestic product (GDP). Chapter 2 supplies an overview of GDP measurement, in both the production and income-expenditure frameworks, as well as a discussion of aspects of component accounts. Chapter 3, Chapter 4, and Chapter 5 provide the basic elements of income arising from production—essentially, the returns to labour and capital; while Chapter 6 describes the income-side adjustment to get to GDP at market prices. The guide then switches to articulating the measurement of final spending on production. Chapter 7, Chapter 8, and Chapter 9 cover the main components of final domestic demand—personal expenditure, government current expenditure and capital formation. Chapter 10 presents investment in inventories. Chapter 11 discusses estimates of international trade as well as inter-provincial trade flows. The remaining reference chapters provide a glossary, a list of acronyms and initialisms used, a list of Statistics Canada surveys referenced throughout the chapters and a brief discussion of the elements of quality.

1.3 An important feature of this guide is that it is a living document that will be updated and extended as required, in order to best serve the user community. This feature is made more useful with international System of National Accounts (SNA) standards undergoing review, and with a subsequent historical revision on the horizon. New users, who may not be as familiar with the SNA as established IEA clients, now have background information to accompany the time series data available electronically.

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