Canadian System of Macroeconomic Accounts revision process and calendar: an overview

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This note outlines changes to the revision policy for the Canadian System of Macroeconomic Accounts. Annual revisions, which impact the most recent three calendar years, will take place in November rather than May, as was previously the practice. In addition, comprehensive revisions (for which the time series is open beyond three years) will occur on a more frequent basis.

Annual revisions

Statistical revisions are carried out regularly in the Canadian System of Macroeconomic Accounts (CSMA) in order to incorporate the most current information from censuses, annual surveys, administrative statistics, public accounts, etc., and to implement improved estimation methods. These types of revisions are referred to as annual revisions and are generally restricted to the most recent three to four years of annual estimates.

Statistics Canada also conducts what are often referred to as “historical” or “comprehensive” revisions to the Canadian System of Macroeconomic Accounts. These revisions reflect new concepts, accounting treatment, classification systems or methods as specified by international accounting standards or due to on-going research at Statistics Canada. In the past, Statistics Canada conducted these types of revisions every 10 to 15 years, with major revisions taking place in 1986, 1997 and, most recently, in 2012.

Statistics Canada has determined that following the 2012 release, revisions relating to concepts, methods, classification systems and accounting standards will be conducted on a more frequent basis and will be rolled into the annual CSMA revision process. The rationale for this change is driven by two factors. The first is to ensure that the CSMA remains relevant and reflects the current state of the Canadian economy. The second is to ensure that the CSMA remains internationally comparable. This is also in line with practices in most other G-20 nations, which are conducting comprehensive revisions with increased frequency. While the revisions to CSMA concepts, methods and accounting treatments will occur more frequently, they will be smaller in scale to those undertaken in the past. This will make them more manageable and easier to digest by our user community. It should also be noted that all revised data will be available to users, free of charge, via Statistics Canada’s website.

The result is that there are potentially three components to any CSMA annual revision. The first component involves incorporating the latest CSMA benchmarks (such as estimates of gross fixed capital formation, household final consumption expenditure, gross operating surplus) that originate from the national and provincial Input-Output Tables (IOTs). The Canadian IOTs incorporate Statistics Canada’s quality annual data sources in a rigorous and detailed accounting framework. As such, they represent the most detailed and coherent accounting system for the structure of the Canadian economy on which to benchmark selected components of the CSMA. The Input-Output Tables are published 35 months after the reference period. For example, in the calendar year 2014, the annual benchmark estimates originating from the 2011 Input-Output Tables are available for the rest of the CSMA. Generally, only one vintage of Input-Output Tables are produced, but from time to time they are revised¹, and those revised annual benchmarks are also incorporated into the CSMA.

The second component of the annual revision process involves incorporating the latest annual survey and administrative data in the current years (for which IO benchmarks are not available). This includes data originating from annual business surveys (Annual Survey of Manufactures, Annual Financial Statistics Survey, etc.) and updated administrative data files used to produce estimates of wages and salaries and corporate operating surplus. These data are usually integrated for the year T-2. For example, with the first quarter release of 2014, the 2012 estimates would be available.

The third component of the annual revision process includes adding revisions associated with the inclusion of new concepts, accounting standards, new detail, improved estimation techniques, updated classification systems, or updated methodologies. These comprehensive revisions often impact the entire CSMA series.² As noted earlier, these types of revisions were normally undertaken every 10 to 15 years. Moving forward, the CSMA will implement comprehensive revisions on a more frequent basis and they will be released as part of the annual revision process.

To summarize, any CSMA annual revision process could involve three components:

1. Incorporation of the latest benchmarks from the Input-Output Tables;
2. Incorporation of the latest annual survey and administrative data
3. Incorporation of new concepts, methods, accounting standards and classification systems

In general, the first two types of revisions will be carried out each year and will only impact the CSMA time series for years T-1, T-2 and T-3. The third type of revision will occur less frequently (once every 2 to 3 years) but will generally impact the entire time series. This means that for any given annual revision process most CSMA time series could be revised anywhere from a minimum of three years to a maximum of the entire length of the time series.

In the past, annual revisions of the national data series usually occurred at the time of the first quarter release (end of May), while annual revisions to the provincial and territorial time series generally occurred at the beginning of November. To improve the coherence between the various CSMA accounts (including the national and the provincial and territorial accounts), the annual revision process noted above is being moved to November. Therefore, at the time of the release of the Provincial and Territorial Economic Accounts in November of each year a revised set of data for the annual and quarterly national economic accounts will also be released.

The following table outlines each CSMA account along with approximate release date of the annually revised data.

It should be noted that some of the source data used to compile the CSMA will be released up to six months prior to the incorporation of this new data into the CSMA. Statistics Canada has chosen to incorporate revised source data once a year rather than when it is available, in order to ensure the revised data are integrated into the CSMA in a coherent manner. For example, annual Foreign Direct Investment estimates released in April of each year will only be incorporated into the Balance of Payments, International Investment Position, Financial Flow Accounts and National Balance Sheet Accounts until November.

In-year revisions

In addition to the annual revision process, the CSMA also conducts revisions to the sub-annual series within the current reference year. In principle, the revision schedule for the sub-annual series is as follows: the first estimate for a given quarter or month is released approximately 60 to 80 days after the end of the reference quarter or month; this estimate is revised when estimates for subsequent quarters of the same calendar year are released. For example, the estimates for the first quarter of 2013 were first released in May 2013. The first revision to these estimates occurred when the second quarter estimates were released in August 2013 and further revisions occurred when the third and fourth quarter 2013 estimates were released. For years prior to the current reference year, the estimates are open for revision only once a year at the time of the annual revision in November, as noted above.

There are two exceptions to this general rule. At the time of the first quarter release (generally in May or June) all CSMA quarterly accounts for the previous year are open to revision. For example, at the time of the first quarter 2014 release of the quarterly Balance of Payments data, the four quarters of 2013 are open for revision. Similarly for the monthly Gross Domestic Product by Industry Program, at the time of the first and second quarter release, the monthly estimates for the current and previous reference year are open for revision. For example, at the time of the release of the June 2014 reference period (in August 2014) data for January 2013 to May 2014 are open for revision.

It is important that users familiarize themselves with this new revision policy. Statistics Canada endeavours to communicate upcoming revisions well in advance so that users can understand the revisions and adapt systems, analysis and models to incorporate new estimates.

Statistics Canada will continue to use the publication Latest Developments in the System of National Accounts to advise users of upcoming changes.

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Notes

1. The Input-Output Tables could be revised if new benchmark information is required by the rest of the CSMA or if revised data are required for administrative use (such as input into the revenue allocation formula).
2. The term ‘comprehensive’ revision’ aligns with that used by the U.S. Bureau of Economic Analysis in their National Income and Product Accounts (NIPA).