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The 2000-2003 revisions of the Income and Expenditure Accounts

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Following usual practice, revised estimates covering the period 2000 to 2003 of the National Economic and Financial Accounts were released along with those for the first quarter of 2004. The annual revision within the System of National Accounts is an integrated process, with revised estimates of the Income and Expenditure Accounts, Financial Flow Accounts and the Balance of International Payments compiled and released together. The integration occurs through compiling Input-Output Accounts in current prices which are released in the fall of each year when the full provincial Input-Output Accounts are completed. Corresponding revisions to the monthly estimates of real Gross Domestic Product by Industry will be released in September.

Statistical revisions are regularly carried out in the System of National Accounts in order to incorporate the most current information from censuses, annual surveys, taxation statistics, public accounts, etc. In principle, the revision schedule is as follows: estimates for each quarter are revised when those for subsequent quarters of the same calendar year are released; thereafter, they are open for revision only once a year for the next four years, at the time of the release of the first quarter estimates. Limited revisions are carried out for periods further back than four years and periodically historical revisions are conducted, roughly once every 10 years. Historical revisions provide an occasion to improve estimation methods, eliminate statistical breaks resulting from more limited revisions and introduce conceptual changes into the system.

The policy of revising the estimates of previous years only once a year is adhered to throughout the national accounts. The period open for revision, however, varies from one set of accounts to another. Thus, the standard revision is four years in the Income and Expenditure Accounts and the Balance of Payments. The standard revision in the Input-Output Accounts covers one year, which is the first year in the four years of revision in the Income and Expenditure Accounts and the Balance of Payments. The Input-Output Accounts for the second year in the four years are incorporated for the first time at the time of these revisions. The revision of the Financial Flow Accounts usually parallels that of the National Balance Sheet Accounts and often covers more than four years to reconcile the stocks with the revised flows.

The most recent historical revision was completed in December 1997, and documentation related to this revision can be found at

Historical revision of the National Economic and Financial Accounts: review

Income and Expenditure Accounts revisions

With the May 2001 release, a number of conceptual changes were implemented within the Income and Expenditure Accounts including the introduction of the use of the Chain Fisher Volume Index, a change in valuation from factor cost to basic price, and a change related to the capitalization of software. With the May 2002 release, several conceptual changes were implemented within the Income and Expenditure Accounts and carried back to 1981. These included classification changes to licences and registrations, land transfer taxes, and spectrum charges and the incorporation of 1996 census results in farm inventories. Documentation related to these conceptual changes can be found at

Latest developments in the Canadian economic accounts

Impact of the revisions on GDP

The revisions to GDP resulted from the inclusion of the most current estimates from data sources as described in the introduction. Revised 2000 and preliminary 2001 Input-Output data are incorporated for the first two years of the four-year revision period. Some benchmark information is incorporated for the more recent periods without the benefit of full Input-Output balancing. Other series are revised only due to applying projectors to the new levels coming from the Input-Output Accounts.

As can be seen from table 1 in the current revision column, the revision to the level of GDP on a current dollar basis each year from 2000 to 2003 is minimal. Expressed as a percentage of the estimate, the change for 2000 and 2001 represents 0.1% of the estimate and 0.3% for 2002 and 2003. Viewed from a historical perspective over two decades (table 5), the revisions for 2002 and 2003 fall in the low range of revisions (not considering years of historical revisions and the revision completed in May 2001, where software capitalization had a large impact) of -0.9% to 1.4% for the preceding year and -0.7% to 1.7% for the second preceding year. The revision for 2000 and 2001 of 0.1% is also low in the range of revisions for the third and fourth preceding years where the range lies between -0.4% and 1.0%. The revisions to the preceding period are a comparison of the GDP released at the time of the first quarter to those released at the time of the fourth quarter of the corresponding year.

In real terms (see table 1), the annual revision to GDP was also small, with a slight decrease in 2000 and 2001 and an increase in 2003. The revisions to the quarterly real GDP series range from -0.2% to 0.4%.

The annual growth rate of GDP in current dollars shown in table 2 is revised by 0.2% in 2002 and by lesser amounts in the other years. The annual growth in real terms is very similar, with changes in growth rates between -0.1% and 0.3%. The quarterly revisions for real GDP range between -0.1% and 0.3%, with the largest revision to the quarterly growth rates occurring in the third quarter of 2002.

The implicit chain price index for GDP is revised up marginally in all four years, with the largest revision of 0.3% in 2002.

Revisions to income aggregates (table 3)

Wages, salaries and supplementary labour income were revised slightly upwards in 2000 and 2001, but experienced significant downward revisions in 2002 and 2003. The revisions in 2002 are the result of revisions to both wages and salaries and supplementary labour income and carried forward to 2003. The receipt of the Canada Revenue Agency (CRA) T4 Supplementary file for tax year 2002, providing the benchmark for wages and salaries, produced a downward revision of $7.3 billion in wages and salaries. Slower growth in manufacturing in Newfoundland and Labrador, Quebec and Ontario and a decline in mining in Alberta contributed to weaker growth than expected in these provinces.

Supplementary labour income, however, was revised upwards by $2.7 billion in 2002, as a result of continued strong growth in group coverage from private health and life insurance plans. In addition, large premium rate increases for Alberta and British Columbia provincial government health plans, increased employers’ payments to private pension plans and Workers’ Compensation Boards, and larger retirement allowance payments contributed significantly to the increase in supplementary labour income in 2002. Minor revisions to 2000 and 2001 supplementary labour income were the result of special payments to teachers’ pension funds in Prince Edward Island and Newfoundland and Labrador.

Corporation profits before taxes were revised up in 2000 by 0.2%, down in 2001 by 0.7%, and up by 3.4% and 3.3% in 2002 and 2003 respectively. Revisions in 2000 and 2001 reflected the benchmarking to the Input-Output Accounts and updated annual corporate income tax returns for 2001. The revision for 2002 reflects the incorporation of new estimates from preliminary Financial and taxation statistics for enterprises including the General Index of Financial Information (GIFI) schedules and is carried forward to 2003.

Interest and miscellaneous investment income was revised up in 2000 by 1.9% and 2003 by 1.7%. Estimates for 2001 and 2002 were revised down by 0.1% and 2.5%. Revisions to this series reflect new and revised interest payment and receipt information and royalty payments of corporations and revisions to investment income-earned data from the trusteed pension funds.

Accrued net income of farm operators from farm production was revised down in all four years, over $300 million in 2000, approximately $1,080 million in 2001, $826 million in 2002 and $385 million in 2003. Accrued net income of farm operators from farm production has been revised down following the incorporation of the results of the 2001 Census of Agriculture. Most of the revision can be attributed to higher farm expenses including depreciation while farm cash receipts have slightly decreased.

Net income of non-farm unincorporated business, including rent was revised upwards throughout the period, in 2000 by $84, in 2001 by $782, in 2002 by $881, and in 2003 by $16. Both rental income and other unincorporated business income were revised up in 2001. The 2001 revisions to other unincorporated business income reflect the benchmarking to the Input-Output Accounts by industry while the 2002 revisions incorporate new administrative data coming from the CRA on the net income of unincorporated business.

Taxes on factors of production, less subsidies were revised downwards in each of the years from 2000 to 2003 with the largest revisions in 2001 of $289 million and 2003 of $252 million. Revisions to taxes on products, less subsidies were upwards during the time period 2000 to 2003, $664 million in 2000, $664 million in 2001, $1,096 million in 2002 and $528 million in 2003. Revisions to both series are due to the incorporation of new public accounts and other financial information for the different sub-sectors of government.

Revisions to expenditure aggregates at current prices (table 4)

Personal expenditure on consumer goods and services was revised slightly downwards in 2000 and 2001 by $297 million and $264 million, respectively. There were more significant revisions in 2002 and 2003, up by $1,121 million in 2002 and down by $712 million in 2003. Results from the Survey of Household Spending for 2002 were incorporated in these estimates, as well as surveys of service industries.

Government current expenditure on goods and services was revised upwards in the four years 2000 to 2003 with significant revisions of 2.2% in 2002 and 2.9% in 2003. These revisions reflect new data from federal and provincial public accounts as well as the latest local government information. Provincial government education and health spending were revised up as a result of the incorporation of updated survey and transfer payment data.

In this revision cycle there was also a correction to the methodology used for the municipal government series to eliminate inconsistencies relating to education data. Use of this methodology resulted in a revision in net municipal expenditure on goods and services of $1,969 million for 2000. The new methodology results in a statistical break between 1999 and 2000 since the 1997 to 1999 data will only be revised during the next historical revision.

Revisions to investment in residential construction were upwards in each of the years 2000 to 2003, with more significant revisions of 0.9% in 2002 and 1.0% in 2003. Revisions are based on building permits information, administrative data, and results from the 2002 Survey of Household Spending and the 2002 Survey of Real Estate Agents and Brokers.

Business investment in non-residential construction and machinery and equipment estimates recorded larger downward revisions in 2000 and 2001, but slight upward revisions in 2002 and 2003. Estimates for year 2000 were revised down by $1,305 million, 2001 down by $2,393 million, 2002 and 2003 up by $505 million and by $87 million. Revisions reflect the benchmarking to the Input-Output supply disposition model for machinery and equipment commodities and the incorporation of the latest estimates from the Private and Public Investment Survey for 2002 (final) and 2003 (preliminary).

Revisions to investment in inventories were upwards in 2000 by $738 million and 2003 by $99 million but downwards in 2001 and 2002 with large revisions of $1,035 million in 2001 and $3,441 million in 2002. Non-farm inventories incorporated the 2001 revision due to the benchmarking of the Monthly Survey of Manufacturing, as well as revised estimates of inventories of natural gas. Adjustments also reflect the outcome of the commodity balancing process that is integral to the development of the Input-Output Accounts, on which the Income and Expenditure Accounts are benchmarked. Upward revisions to the farm inventories series were due to the incorporation of the livestock balance sheets which have been benchmarked to the 2001 Census of Agriculture.

Exports of goods and services were revised upwards for the whole revision period, with 0.1% and 0.2% in 2000 and 2001. There were significant revisions of 1.1% and 0.4% in 2002 and 2003. Exports of goods had downward revisions for the period due to new estimates for the level of undercoverage of merchandise exports to countries other than the United States. Revisions to goods were also influenced by revised data for natural gas, crude oil, diamonds and pharmaceuticals in 2002 and 2003.

Large upward revisions to exports of commercial services have been made for the year 2002 and carried forward to 2003. These revisions are due to the inclusion of recent results from several annual surveys. The largest revisions appeared in insurance services, more precisely in re-insurance activities. Canadian firms ceded more insurance to non-resident insurance firms in 2002 than they did before. This led to large increases in both premiums provided to, and claims refunded from, foreign insurance companies.

Imports of goods and services were revised slightly upwards in 2000 and 2001 by $519 million and $702 million. Significant upward revisions were experienced in 2002 and 2003 of $4,259 million and $3,618 million. The large revision to 2002 and the carry forward to 2003 was primarily due to the revision of imports of services. Similar to exports of services, imports of commercial services were revised upwards to reflect survey results which showed large revisions to re-insurance activities.

Revisions to price indexes

In general, price indexes at the most detailed level employed in the deflation of GDP are unrevised. However, upward revisions were recorded for government current expenditures on goods and services deflators and downward for services exports deflators.

The global deflator for government current expenditures on goods and services has been revised mainly due to the implementation of a more refined measurement approach. The labour income portion of government expenditure on goods and services in real terms has now been projected using hours worked, adjusted for quality, instead of employment for the federal and the provincial administration sub-sectors.

A change in the weighting of current dollar components of services exports has resulted in a downward revision to the corresponding deflator.


  1. Revisions to Gross domestic product
  2. Revisions to Gross domestic product (growth rates)
  3. Revisions to income aggregates at current prices
  4. Revisions to expenditure aggregates at current prices
  5. Revisions to Gross domestic product (historical perspective)