Data quality, concepts and methodology

Transportation services

1. Concepts

Transportation covers international revenues (receipts) and expenses (payments) arising from the transportation of goods and of cross-border travellers, as well as from supporting services related to transportation.

The convention of valuing goods trade at the customs frontier of the exporting country affects the measurement of transportation, especially for overland forms of transportation. (For air and ocean carriers, the point of departure and the customs frontier are generally coincident.) For overland forms of transportation, the transportation services from the plant to the border will give rise to an entry in the transportation account of the balance of payments if the carrier is a non-resident of that country. Likewise, if a non-resident carrier provides the overland transportation service from the customs frontier to the destination, there will be an entry in the transportation account.

Canadian practice generally conforms to international standards, except for the following transactions, which are under transportation in Canadian statistics but which international standards identify in other classes:

• cruise fares (international standards include these in travel);
• ship stores, which are not separately identified from port expenditures (international standards include these in goods);
• rentals without crews, which are not separately identified from charters with crews (international standards include these with equipment rentals in commercial services); and
• freight insurance, which is not separately identified from freight charges (international standards include this with insurance services in commercial services).

In 2002, a reclassification of certain support services to air transport was made from commercial services. The shift to the transportation account beginning with 1998 brings treatment into line with current international standards.

The international standards that call for a breakout by mode of transportation are not fully followed in Canada in the case of ocean transportation. For reasons of both confidentiality and quality, Canadian statistics combine ocean transport with that by inland waterway. International standards call for transport by inland waterway to be recorded as part of other transportation.

1.1 Receipts

Canadian transportation receipts cover passenger revenues of Canadian carriers (the majority of which are airlines) from cross-border fares purchased by foreign travellers, and freight revenues earned from non-residents by Canadian carriers for transporting the following:

• Canadian exports beyond the borders of Canada;
• Canadian imports to the Canadian border; and
• foreign-owned goods both in transit through Canada and between foreign ports.

Revenues earned by Canadian residents chartering vessels to non-residents are also included, as well as those earned by Canadian residents providing port services in Canada to foreign air and shipping carriers.

1.2 Payments

Conversely, Canadian transportation payments cover cross-border passenger fares purchased by Canadian travellers from non-resident carriers (again, mainly airlines), and freight expenses incurred with nonresident carriers for transporting the following:

• Canadian imports from the Canadian border;
• Canadian exports to the Canadian border; and
• Canadian-owned goods between foreign ports.

Expenditures of Canadian residents chartering vessels from non-residents are also included, as well as those of Canadian carriers acquiring port services abroad, largely for air- and water-borne transport, are also included.

1.3 Exclusions from transportation

Transportation, as defined in the international standards, excludes the following transactions:

• revenues earned for transporting non-resident travellers once in the domestic economy (part of travel);
• major repairs and refits of ships and aircraft, which are included in goods;
• repairs to infrastructure (for example, to harbours and runways), which are included with construction services;
• time charters; and
• financial leases, which are treated as both financial transactions and goods.

1.4 Cross-border trucking

The treatment of goods and inland transportation services is interdependent because goods transactions are valued at the customs border of the exporting country. The residency of the truck carriers and the location where transport is provided determine the entries for cross-border trucking services in the transportation account. Services provided by Canadian domiciled truckers beyond the Canadian border are recorded as transportation receipts whereas services provided by U.S. domiciled trucks within the Canadian border are treated as transportation payments.

2. Data sources

2.1 Passenger fares

The Culture, Tourism and Center for Education Statistics Division estimates passenger fare receipts and expenditures. The monthly data on air travellers, provided by Canada Customs and Revenue Agency, are combined with estimates of average passenger fares, obtained from the quarterly sample survey of travellers.

2.2 Transportation of goods

Transportation of goods by truck beyond the exporting country-which constitutes by far the largest component of the transportation account-is derived from customs documentation compiled by the International Trade Division for payments and by the U.S. Census Bureau for receipts. The components for earnings of Canadian truckers for the carriage of goods in the United States, as well as for expenses paid to U.S. truckers for transporting goods in Canada, are obtained from the U.S. Bureau of Economic Analysis (BEA). The BEA incorporates freight data from the customs data compiled by the International Trade Division of Statistics Canada.

The other transportation components are derived from five annual surveys conducted by Statistics Canada's Balance of Payments Division:

• Great Lakes-St. Lawrence Seaway Shipping Transactions-BP-20;
• Report of Cargo, Earnings and Expenses of Ocean Vessels Operated by Non-resident Companies-BP-24;
• Report of Cargo, Earnings and Expenses of Ocean Vessels Operated by Canadian Companies-BP-25;
• Report on Imports of Crude Petroleum and Petroleum Products and Other Shipping Operations-BP-26; and
• Transactions of Foreign Airlines with Residents of Canada-BP-58.

The mailing lists for these surveys are updated based on the Canadian Transportation Guide, Canadian Logistics, published annually by the Canadian Maritime Industries Association. This guide lists all companies engaged in the Canadian transport industry by sector, that is, by sea, air, land and rail. The mailing list is supplemented by information gathered from media coverage. For the surveys of shipping companies, the mailing list is further compared with information on shipping companies kept by the Transportation Division of Statistics Canada.

3. Methods

3.1 General methodology

The Culture, Tourism and Centre for Education Statistics Division compiles the data on passenger fares.

The Balance of Payments Division compiles the remaining information on transportation as follows.

For estimates of trucking freight beyond the Canadian/ American border, most components of the calculation are taken from the U.S. Bureau of Economic Analysis, whose basic methodology is followed for this series. ¹ Beginning with the reference year 1987, the earnings by Canadian-domiciled truckers comprise the freight for carrying exports within the United States to the U.S. destination and the freight for carrying goods from U.S. suppliers within the United States up to the U.S.- Canadian frontier. (Freight on the latter Canadian imports for the remaining journey within Canada is classified as a resident-to-resident transaction, outside the scope of balance of payments.)

In the opposite direction, since 1981, the payments made to U.S.-domiciled truckers have included the payments made for carrying imports within Canada from the Canadian border to their destination in Canada, as well as the payments to carry Canadian exports in Canada up to the Canadian border.

For the surveys, where regular follow-ups do not produce sufficient data, amounts are imputed based on prior responses and available external information. The survey results are often combined with other sources. For example, in the 1997 historical series, the methodology was adapted to increase the coverage of global payments abroad for the transport by sea of imports. The basic survey of non-oil imports was closely re-edited to calculate unit values. The unit values were then multiplied by international shipping tonnage unloaded at Canadian ports as compiled by the Transportation Division of Statistics Canada. The tonnage activity is largely handled by non-resident carriers.

3.2 Extended geographical breakouts

Some larger series in the transportation sector are regularly reported for a range of individual countries at source, such as international passenger fares from the travel survey and the port expenditures in Canada reported by individual foreign airlines. In other instances, such as cross-border trucking earnings or smaller series on earnings from in-transit movements, no special allocation is required as they occur only with the United States.

Otherwise, statistics for the United States, Japan, United Kingdom, Other European Union, Other OECD and Other Countries are collected at source, or through other established estimates. Earnings of Canadian-operated shipping on outward cargo are allocated to individual countries in the last three partner trading blocks according to volumes loaded for specific countries based on data from the Transportation Division. Other large series, such as freight payments to vessels operated by non-resident interests or charters, cannot suitably be estimated only according to cargo volumes unloaded or by waterborne import values. What is relevant in these cases is the shipping interests that paid for the service rather than the origin of the cargo. In such a case, a typical allocator used is the shipping tonnage by country of domicile, including the portion of openregistry shipping managed by each country (tabulations from United Nations Conference on Trade and Development [UNCTAD]).

4. Products

4.1 Data accuracy

Data accuracy is acceptable.

The structure of Canada's transportation services account has undergone substantial change over the years. The pattern of trade in goods plays a preponderant role in the transportation account. A large portion of Canada's trade in goods is now with the United States, which in turn leads to more transportation inland, and the attendant difficulties of measuring inland freight. There are major difficulties in delineating transportation services on the basis of the residency of the carriers, especially for trucking. For example, in the estimation of cross-border trucking, the northbound freight on goods used by the U.S. Bureau of Economic Analysis is supplied by the International Trade Division from Canadian customs records, which show the whole journey rather than only inland freight to the border. This whole journey measure is useful for the series in question, but within this, the shares by domiciled carriers are difficult to discern.

In the past, a higher percentage of trade was with overseas countries. The carriage of Canada's trade by ships under Canadian registry has declined considerably in the postwar period. The fact that Canada's foreign trade is now carried to a larger extent by foreign-operated carriers has led to methods such as the unit valuation (see section 3.1) to raise coverage when less than complete information is available at source.

In addition, since deregulation of air services in the late 1980s, reporting has been less than complete for air freight receipts and on payments for supporting landside services, especially geographic breakouts. The extensive detailed annual reconciliation on current account transactions, which is conducted with the U.S. Bureau of Economic Analysis, assists in the data estimation process as well as in validation. ² Certain payments on bilateral air freight and landside services benefit from U.S. estimates, reflecting incomplete information obtained from the Canadian source.

Water and air transportation is derived from a number of small customized BOP surveys conducted annually (the coverage ranging from 7 to 47 firms, depending on the survey). Response rates on four vessel surveys for 2002 averaged 61%, while a survey of 55 foreign airlines serving Canada showed a response rate of 65%. 

4.2 Data accessibility

The quarterly and annual series on transportation covering total receipts, payments and balances are published in the quarterly Canada's Balance of International Payments (available in print and in electronic format on the Internet) and in CANSIM.

The annual transportation series are also published in the present annual publication Canada's International Trade in Services (available in print and in electronic format on the Internet) and in CANSIM with breakdowns for the six geographic groupings: United States, United Kingdom, Other European Union, Japan, Other OECD and Other Countries. This publication also has transport series by major mode: water, air, land and other transport. Air transport, land transport and other transport are in turn divided on an annual basis between passenger services and freight and auxiliary services. Water transport, which combines ocean freight and inland waterway transportation, is broken down annually by freight and auxiliary services. Beginning with the 1998 issue, annual totals for transportation are also available (with a year's lag) for a wide range of individual countries from 1990 onward. These series are published in combination with government services, which are very small by comparison. Estimates showing transportation separately can be made available on enquiry.