Latest Developments in the Canadian Economic Accounts
The 1986 to 2016 revisions of the National Tourism Indicators

Release date: September 28, 2017

1. Introduction

With the release of the fourth quarter 2016 estimates of the National Tourism Indicators (NTI) in March of 2017, data were revised from the first quarter of 1986 to the third quarter of 2016. Updated benchmarks from the 2012 Canadian Tourism Satellite Account (CTSA) were incorporated. Other sources of new and revised data and selected conceptual changes were also introduced. This article will focus mostly on revisions beginning in 2012, the reference year of the most recent CTSA.

The NTI are benchmarked to the 2012 CTSA, which is anchored to the 2012 Supply and Use Tables (SUT). The SUT are available almost three years after the end of the reference period. As a result, the CTSA is published well after the fact. The NTI, on the other hand, use tourism ratios from the CTSA as well as other aggregate economic indicators to provide an up-to-date view of tourism’s economic landscape. New CTSA benchmarks, updates to the CTSA tourism ratios and new and revised economic indicators all lead to revisions to the NTI.

Between 2012 and 2015, tourism spending (in current dollars) was revised down for each year. In 2015, tourism spending was revised from $90.3 billion to $87.9 billion, most of which came from revisions to domestic demand. Tourism domestic demand was revised down from $71.9 billion to $69.9 billion in 2015, while tourism exports were lowered by $0.3 billion, to $18.1 billion.

Growth rates (in nominal terms) were revised down in 2012, 2013 and 2015, while 2014 was unchanged. In 2015, growth in tourism spending was revised from +2.1% to +1.7%.

On a quarterly basis between the first quarter of 2012 and the third quarter of 2016, growth in tourism spending (in real terms) was revised down in 13 quarters, up in four quarters and unchanged in two quarters (see Table 1.2). Revised quarterly growth rates were within 0.3 percentage points of previously published estimates in 16 of 19 quarters, and all were within 0.5 percentage points.

Cumulatively, revised tourism spending increased 13.6% between the fourth quarter of 2011 and the third quarter of 2016, compared to the previously-published growth of 14.5% (adjusted for seasonal variation and price change).

2. National Tourism Indicators revision policy

The NTI revision policy allows for regular and systematic incorporation of new and revised data for the past reference periods, including regular benchmarking to the CTSA. Revisions to the NTI are the result of new or revised data in the core economic accounts. The revision policy serves to improve the reliability and accuracy of the NTI time series estimates. It is adapted from the policy followed for the Canadian System of Macroeconomic Accounts (CSMA), which governs four types of revisions: current, annual, comprehensive, and rebasing. Each of these are described below.

During the current reference year, estimates for any quarter are subject to revision at any subsequent quarter. For instance, a first-quarter estimate is revised on the release of the second-, third-, and fourth- quarter estimates for the same year. Revisions to estimates during the current reference year are called current revisions. These revisions allow improvements to estimates for past quarters during the current year through the incorporation of the most up-to-date information available (including revisions to source data as a result of late reporting).

At the time of a third-quarter release, all estimates for a given number of years back from the current year are subject to revision. This “annual revision” allows for the incorporation of the most up-to-date information from censuses, annual surveys, taxation statistics, public accounts, etc., which become available well after the fact. The number of years open to revision (or the “window for revision”) depends on the CSMA revision policy. Furthermore, when a new set of CTSA benchmarks is incorporated into the NTI, the revision period is extended back to the previous CTSA. Thus, the window for revision in the NTI varies according to the frequency of CTSA updates and the CSMA revision policy.

Once an estimate has gone through the cycle of annual revisions, it is subject to the comprehensive revision process. Comprehensive revisions also provide an opportunity to bring in new data. However, these revisions are mainly for the purposes of introducing new concepts and definitions, implementing new and refined methods, and revamping estimation systems. Comprehensive revisions like this one typically result in changes to the entire time series.

Rebasing of constant price series, as with the first quarter 2013 release of the NTI, is normally carried out every five years. Rebasing is done to remove bias in measures of inflation-adjusted growth as relative prices in the economy evolve away from those of the base year. Rebasing involves revisions to only price indices and constant price aggregates, leaving aggregates at current prices unaffected.

3. Sources of revisions

The revisions to the NTI came from several sources, the most significant being the incorporation of the 2012 CTSA benchmarks. The 2013 SUT and updated indicators from the CSMA were also incorporated, as were more recent tourism industry and travel survey data. Conceptual changes also led to revisions to the NTI. Each of these are described below.

3.1 The 2012 Canadian Tourism Satellite AccountNote 

The 2012 CTSA was released in November 2016. Supply-side and gross domestic product (GDP) estimates of the CTSA were derived from the 2012 SUT and survey data. Demand-side estimates were derived from the Travel Survey of Residents of Canada (domestic demand) and the International Travel Survey (exports). Employment estimates were based on the Canadian Productivity Accounts.

Updates to tourism commodity and industry ratios in the NTI can have a significant impact on levels of tourism demand, GDP and employment. For example, the previous tourism ratio for the food and beverage services industry, from the 2004 CTSA, was 17.0%. With the 2012 CTSA, the tourism ratio for that industry was updated to 20.5%. This underestimation of tourism’s contribution to the food and beverage services industry in 2012 led to most of the 28.1% upward revision to levels of tourism employment for that industry.

3.2 Supply and Use Tables, 2013

The latest available 2013 SUT released in November 2016 were used to update the NTI’s annual supply estimates for 2013. This update led to revisions to quarterly supply, demand, GDP and employment of the NTI from the first quarter of 2013 to date.

3.3 Conceptual changes

With the replacement of the Canadian Travel Survey with the Travel Survey of Residents of Canada in 2006, the operational definition of a tourism trip was updated to include all out-of-town overnight trips, as well as out-of-town same-day trips of at least 40 kilometers one-way. Previously, all trips (same-day and overnight) of 80 kilometers or more one-way were considered tourism. Also, routine trips, either for business or for personal reasons, are no longer considered tourism trips. The 2012 CTSA also added the purchase of pleasure boats to pre-trip expenditures. All these changes are in alignment with international standards on tourism statistics established by the World Tourism Organization (UNWTO).Note Note  These conceptual changes affected CTSA estimates, and in turn, the NTI via the benchmarking process.

3.4 Revisions to the Canadian System of Macroeconomic Accounts

Current revisions to household final consumption expenditure and to GDP by industry for the first quarter of 2016 to the third quarter of 2016 led to quarterly updates to the NTI for that year.

The regular annual revisions to the Income and Expenditure Accounts, released for the period 2013 to 2015 in November 2016, specifically those to the household sector, also led to quarterly updates to NTI estimates for this period.

The 2015 comprehensive revision to the CSMA was released in December 2015. It led to quarterly updates to tourism GDP for the first quarter of 2013 to the third quarter of 2016.Note 

As a result of revisions to the CSMA, new benchmark information from other sources, notably the Survey of Household Spending, as well as transportation, food services and drinking places and accommodation industry surveys, were brought into the NTI indirectly. This affected the NTI quarterly movements and annual levels for all years.

4. Impact of revisions on the National Tourism Indicators, 2012 to 2015

4.1 Revisions to components of tourism demand (nominal terms)

Annual revisions to the components of tourism demand (in current dollars) varied. The largest contributor to the downward revision was in transportation (see Table 2).

Transportation was revised downwards in all years by an average of $1.8 billion, mainly in passenger air transport. Upward revisions to vehicle repairs and parts and vehicle fuel moderated the lower estimates.

With the new operational definition of domestic tourism trips, the exclusion of routine trips from tourism estimates likely led to a downward revision to passenger air transport in all years. Conversely, the inclusion of out-of-town same-day trips between 40 kilometers and 80 kilometers one-way and of out-of-town overnight trips shorter than 80 kilometers one way likely contributed to upward revisions to expenditures on vehicle repairs and parts and vehicle fuel.

Estimates of accommodation services were lowered in all years, with downward revisions ranging from $0.9 billion (2012) to $1.1 billion (2015). These were offset by upward revisions to food and beverage services. In 2015, food and beverage services were revised up $1.1 billion.

Spending on other tourism commodities (e.g., recreation and entertainment, and travel agency services) was lowered every year, culminating in a $0.3 billion downward revision in 2015. Spending on non-tourism commodities (e.g., groceries, urban transit and other miscellaneous commodities) was revised up $0.2 billion in 2012 and was virtually unchanged in 2013, 2014 and 2015.

4.2 Revisions to components of tourism demand (growth rates in real terms)

Annual growth rates of tourism spending (in real terms) were revised down in 2012 and 2015, and up in 2013 and 2014 (see Table 3). Prior to the revisions, the cumulative growth of tourism demand was estimated at 7.5% from 2012 to 2015. The NTI now indicate a cumulative growth of 7.3% over the same period.

Growth in transportation and accommodation were generally revised down. In 2015, transportation was revised down from +5.2% to +4.3%, while accommodation services were revised down 0.8 percentage points to +0.6%. Growth in food and beverage services was generally revised up, including a 0.9 percentage point revision to +2.4% in 2015.

Growth in other tourism goods and services was revised down 1.1 percentage points to +0.5% in 2015, while non-tourism goods and services was revised up 0.4 percentage points to +1.5%.

4.3 Revisions to employment generated by tourism demand

Tourism employment was revised significantly upwards. In 2015, tourism employment was revised up 11.2% to 708,500 jobs (see Table 4). Upward revisions were similar in all years, ranging from 10.9% in 2012 to 11.6% in 2014. Cumulatively, growth in tourism employment was virtually unchanged, increasing 4.8% between 2012 and 2015, compared to the previously-published growth of 4.6%.

The revisions in tourism employment were largely due to upward revisions in the food and beverage services industry, as well as in non-tourism industries. Tourism employment in transportation was also revised up, while accommodation was revised down. These revisions mostly stemmed from the implementation of the new CTSA benchmarks in 2012, mainly to tourism ratios in food and beverage services and recreation and entertainment industries, which were carried forward to subsequent years. Between 2012 and 2015, cumulative growth for transportation, accommodation and food and beverage services were within 0.8 percentage points of previously published estimates.

Upward revisions in tourism employment and downward revisions in tourism demand are partly explained by revisions to the industrial composition of tourism employment. Tourism employment in the food and beverage services industry, which accounts for almost one-third of employment attributable to tourism demand in part due to its high concentration of part-time workers, was revised up significantly, leading to upward revisions in overall tourism employment. Benchmarking to the 2012 CTSA, as well as updates to the tourism ratio for that industry, led to these upward revisions.

4.4 Revisions to tourism gross domestic product (growth rates in real terms)

Tourism GDP annual growth rates were revised within 0.7 percentage points of the previously-published estimates (see Table 6). The mean absolute revision was 0.5 percentage points. In 2015, tourism GDP was revised down 0.2 percentage points to an increase of 2.9%.

New estimates from the 2013 SUT led to larger revisions in growth at the component level for that year. In 2013, tourism GDP in transportation, accommodation and other tourism industries (which includes recreation and entertainment as well as travel services), were revised down between 0.8 and 3.3 percentage points. Tourism GDP was revised upwards in food and beverage services and in non-tourism industries by 1.1 and 0.7 percentage points, respectively.

In 2015, growth rates in tourism GDP at the component level were all within 0.9 percentage points of the previously-published estimates. The mean absolute revision at the component level was 0.4 percentage points.

5. Impact of revisions on the National Tourism Indicators, 1986 to 2011

NTI estimates for 1986 to 2011 were revised to align with the new 2012 CTSA benchmarks and resulting NTI estimates for 2012. All components of tourism demand, GDP and employment were revised. This realignment did not incorporate new source data. Its purpose was to minimize any potential breaks in the time series.

Annual tourism demand (in current dollars) was lowered in all years and the downward revisions ranged from $0.6 billion (in 1986) to $1.5 billion (in 2011). Tourism demand was revised down between 1.7% (in 2009) and 3.1% (in 1996) from the previously-published estimates. Growth rates to annual tourism demand (in nominal terms) were all within 0.4 percentage points of the previously-published growth rates.

Employment generated by tourism demand was revised up in all years and the upward revisions ranged from 10.3% (in 1996) to 10.9% (in 1987). Growth rates to tourism employment were all within 0.4 percentage points of the previously-published estimates, and all but six were within 0.2 percentage points.

Growth rates to annual tourism GDP (in real terms) were all within 0.5 percentage points of the previously-published estimates, and all but two were within 0.3 percentage points.

Data tables

Table 1.1 Revisions to tourism demand at current prices

Table 1.2 Revisions to tourism demand at 2007 prices

Table 2 Revisions to the components of tourism demand

Table 3 Revisions to the components of tourism demand (growth rates)

Table 4 Revisions to employment generated by tourism

Table 5 Revisions to tourism gross domestic product at current prices

Table 6 Revisions to tourism gross domestic product at 2007 prices


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