7.3 Data sources and estimation methods

Overview

7.27 As noted in Chapter 2, the Canadian System of National Accounts (CSNA) is an integrated conceptual framework, presented in the form of economic accounts. In this framework, personal expenditure on consumer goods and services are integrated with other statistics from the Income and Expenditure Accounts, in addition to being harmonized with the various components of the CSNA, especially with the Input-Output Tables for the 130 series of goods and services.

7.28 It is important to note that like the other components of gross domestic product (GDP), the estimation of personal expenditure operates within a four-year revision cycle. This cycle ensures that any new information drawn from Statistics Canada surveys and data from administrative and other data sources are incorporated into the system. For the first two estimation years of the cycle, benchmark data or annual benchmarks at current prices, with and without sales tax, are derived by balancing supply and demand by commodity. These benchmarks are incorporated into the Input-Output Tables and the Income and Expenditure Accounts.

7.29 Since the Input-Output Tables cover only the first two of the four years annually subject to revision, the Income and Expenditure Accounts Division (IEAD) is responsible for producing national, provincial and territorial estimates of personal expenditure at current prices for the two most recent reference years. Also, the Income and Expenditure Accounts Division produces, for the four-year period, quarterly national estimates at current and constant prices as well as annual constant price estimates by province and territory. All these estimates require various operations or processes, which are described in the following paragraphs.

7.30 The first operation consists of projecting benchmark estimates at current prices without sales tax for the two most recent reference years. The operations that follow differ depending on whether they are carried out at the national or at the provincial/territorial level. In the case of national estimates, it is first necessary to distribute the annual series into quarterly series for the four years subject to revision and then to project them to obtain quarterly values for the current reference year.1 In the case of projected provincial and territorial estimates, they must be adjusted by distributing any difference that might exist between their sum and the national estimate. One reason for this difference could be that the provincial and territorial series are estimated independently of each other (that is, without the prior constraint of additivity to the national estimate) and that the national estimate previously published was not calculated from provincial/territorial data. Another reason could be that revised or more up-to-date source data have since become available.

7.31 The three operations mentioned above, namely projection (annual or quarterly), quarterly distribution and provincial/territorial distribution, are carried out using data series that are called "estimators". Projection consists of calculating the rate of change of the estimator observed from one period to the next and applying it to the estimation of personal expenditure for the previous period. Quarterly distribution consists of distributing annual values into quarterly values while trying to reflect the quarterly rates of change observed for the estimator, using quadratic minimization techniques. Lastly, the provincial/territorial distribution consists of allocating the difference between the sum of the provincial and territorial estimates and the national estimate, while minimizing the relative impact on the rate of change of each of the provincial and territorial series. The methods used to calculate the estimators for the national estimates at current prices are presented in paragraphs 7.49 to 7.100 while those for the provincial and territorial estimates at current prices are shown in paragraphs 7.101 to 7.108.

7.32 Once the estimates of personal expenditure at current prices without sales tax have been calculated, the federal and provincial sales taxes must be added to them to obtain the personal expenditure on consumer goods and services at market value. The federal Goods and Services Tax (GST) and provincial sales taxes are calculated for each expenditure series. For further details, see paragraphs 7.109 to 7.112. Table 7.2 presents the current price estimates of personal expenditure for the provinces, territories and Canada for the year 2000.

Table 7.2 Personal expenditure on consumer goods and services, 2000. Opens in a new browser window.

Table 7.2
Personal expenditure on consumer goods and services, 2000

7.33 Finally, after the estimates at market prices have been calculated, each expenditure series is deflated using consumer price indices or other related price series in order to derive estimates of personal expenditure at constant prices. The methods used to calculate the constant price estimates are presented in paragraphs 7.113 to 7.115. Table 7.3 presents the constant price estimates of personal expenditure for the provinces, territories and Canada for the year 2000.

Table 7.3 Personal expenditure on consumer goods and services at constant prices, 2000. Opens in a new browser window.

Table 7.3
Personal expenditure on consumer goods and services at constant prices, 2000

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Notes

1. This applies only when the estimates resulting from the annual revision cycle are published, that is, usually when the estimates for the first quarter of a reference year are published. When the estimates for the second, third and fourth quarters are published, the estimates for the periods preceding the current reference year are not revisable. Only the projection step is carried out for the quarters of the current reference year.