3.3 The quarterly and monthly estimates of labour income

3.24 Monthly estimates of wages and salaries are produced by industry and by province and territory. Supplementary labour income is also produced on a monthly basis by province and territory. Estimates of labour income paid by the business, government and personal sectors are produced on a quarterly basis only at the Canada level.

Wages and salaries

3.25 The estimation of wages and salaries is derived through a complex series of steps, which involves not only the projection of monthly trends in wages and salaries by industry, and by province and territory, but also the revision of monthly patterns for both current and benchmark years. The monthly estimates of wages and salaries are produced by broad industry groups1 for each province and territory, using monthly trend indicators of earnings, average weekly earnings, and employment. The data are then seasonally adjusted using Statistics Canada's X-11 ARIMA program.

3.26 The Survey of Employment, Payroll and Hours2 (SEPH) provides the most detailed trend indicator of unadjusted earnings, hours and employment by industry3, and by province and territory4. These indicators characterize the composition of earnings by highlighting increases in average weekly earnings, employment, and hours worked.

3.27 The Survey of Employment, Payroll and Hours also provides the only comprehensive estimate of irregular or special payments. While these payments form only a small percentage of the total wages and salaries, they can have enormous impacts on some provinces and territories, as well as on industries. Therefore, it is important that these special payments be disaggregated from the overall estimates so that their impact can be analyzed.5

3.28 Data on special payments is supplemented with information on retroactive special payments gathered from collective bargaining bulletins6 issued by Human Resources and Skills Development Canada on recent collective bargaining settlements by unions. This source identifies major wage developments in collective bargaining in Canada, reporting the number of employees affected, as well as the increases in rate of pay. All special payments including retroactive payments are treated on a cash-basis rather than an accrual-basis.

3.29 Data on work stoppages in effect during the month are also used to estimate trends in wages and salaries. Weekly reports are available from Human Resources and Skills Development Canada on major work stoppages that affect 500 or more workers. These reports identify the employer, location and union affected, the number of workers involved, and the start and end dates of work stoppages. Monthly work stoppages are calculated by industry for each province and territory using average weekly earnings multiplied by the number of employees affected. An estimate of "money lost" is used to adjust wages and salaries prior to seasonal adjustment.

3.30 Information gleaned from media articles is also an important source in identifying recent labour disputes, strikes, layoffs, and the impact of wage settlements.

3.31 Employment and earnings data from the Labour Force Survey also provide monthly indicators of trends in wages and salaries of paid workers by province and territory7, and by industry8. These data provide an additional trend perspective, since they are based on information supplied by workers living in the household, rather than data supplied by employers.

3.32 The Public Institutions Division (PID) provides the sole timely source of employment and payroll data for the public administration industry. Public Institutions Division supplies monthly employment and gross payroll data for the federal government and the military, as well as provincial governments. Public Institutions Division also supplies a breakdown of gross payroll into regular pay and special payments9 for both federal and provincial employees.

3.33 Other ad hoc information may be obtained from a variety of sources. Trends in employers' provincial payroll taxes, or assessed employers' payrolls compiled by workers compensation boards, may be provided by provincial and territorial contacts. Data on current remittances of personal income taxes may also provide ad hoc trend information. Status reports received from the Canada Revenue Agency on the processing of individual tax forms for the current tax year, although less timely, are also useful in confirming published trends in wages and salaries by province or territory. Lastly, the Canadian Payroll Manual10 monthly bulletins on changes in tax legislation affecting employers' payrolls are consulted.

Supplementary labour income

3.34 Few data sources are available on a monthly basis to estimate supplementary labour income by province and territory. Employers' contributions to the Employment Insurance Fund and the Canada and Quebec pension plans are projected on the basis of trends in employment as well as rate increases, if any, throughout the year.

3.35 The remaining components of supplementary labour income are combined and estimated as a group using the trends in wages and salaries, due to the scarcity of indicators. Newspaper articles may provide some information on retiring allowances, if a large number of people are affected as a result of downsizing or business closures. National adjustments may be made for retiring allowances, workers compensation, or welfare, when large significant payments or changes in employers' contributions have been substantiated. In addition, quarterly estimates of employers' contributions to pensions obtained from the Survey of Trusteed Pension Fund are monitored and adjustments may be made for upcoming unfunded liability payments, or for contribution holidays, if known.

3.36 The supplementary labour income estimates are seasonally adjusted for each province and territory using the X-11 ARIMA program11.

Labour income by sector

3.37 Labour income paid by the business, government, and personal sectors is estimated by quarter for Canada only. Labour income paid by the government sector is estimated using the trend in public administration wages and salaries. Labour income paid by the business and personal sectors is estimated by quarter using the trend in the total economy, as well as information gleaned from ad hoc sources.

3.38 Although great care is taken on a monthly basis to accurately estimate the current data, revisions are often made in the preparation of the quarterly Income and Expenditure Accounts, and must be reworked through the industry detail within each province and territory because of the monthly bottom-up approach used in estimating wages and salaries. Generally, revisions occur because of additional information received from other components of the accounts.

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Notes

1. Due to the complexity of preparing monthly projections, by industry and by province and territory, some industry estimates are combined. For example, the professional and personal services group includes: professional, scientific and technical services; administrative and support, waste management and remediation services; arts, entertainment and recreation; accommodation and food services; and other services.

2. Survey no. 2612. Monthly estimates derived from the payroll deductions administrative data received from Canada Revenue Agency are combined with the results of the Business Payroll Survey (no. 2614) to produce estimates for the full range of Survey of Employment, Payroll and Hours variables.

3. Employers in agriculture, fishing and trapping, private household services, religious organizations and military personnel are excluded.

4. The province of establishment derived from the Business Register is used by Survey of Employment, Payroll and Hours.

5. Special payments include items such as overtime payments, retroactive pay and bonus payments. As an example, overtime payments during the 1998 ice storm were significant.

6. See Collective Bargaining, Workplace Information Directorate, Labour Program, Human Resources and Skills Development Canada at www.labour.gc.ca.

7. The Labour Force Survey excludes the Yukon, Northwest Territories, Nunavut, persons living on Indian Reserves, and inmates.

8. The Labour Force Survey excludes defence services and aboriginal public administration.

9. Data on special payments are provided for retroactive payment, overtime, extra duty, bonuses, and taxable allowances and benefits.

10. The Canadian Payroll Manual (Thomson-Carswell, Toronto, Ontario).

11. The X11ARIMA program can seasonally adjust complete or partial time series stored in the FAME database. The major features of the X11ARIMA are detection of seasonal trends; adjustment of raw data; and calculation of seasonal factors.