Data quality, concepts and methodology

Travel

1. Concepts

In conformity with international standards, travel covers purchases of goods and services by the following:

• persons travelling in another country for less than one year;
• persons travelling in another country for one year or more for medical or educational purposes;
• seasonal and border workers working in another country (cross-border workers); and
• crews of airplanes, ships, trucks or trains stopping off or laying over in another country.

Purchases of goods and services consist of expenditures for food, lodging, recreation, gifts and other incidentals, as well as local transportation purchased in the country of travel.

Travel excludes passenger fares for international travel, which are included in transportation. It also excludes spending of diplomats and military personnel on posting in host countries. Such personnel remain residents of their home countries, and their spending in the host countries is included in government services. However, visits in the interim, whether on leave or on official business, are considered part of travel.

In Canadian statistics, an exception to international standards is cruise fares, which are excluded from travel and, instead, are classified in transportation. Furthermore, though Canadian travel statistics include the personal expenditures of cross-border workers in business travel, such expenses are not separately identified, as called for by international standards.

Travel is subdivided into travel for business reasons and travel for personal reasons, an important distinction for the System of National Accounts.

Expenditures by business travellers are part of the intermediate consumption of producers, whereas expenditures by other travellers on personal trips are part of household final consumption expenditures. In order to calculate final consumption expenditures of resident households from the expenditure made by all households, both resident and non-resident, within the domestic market, it is necessary to add direct purchases abroad by residents and to subtract direct purchases in the domestic market by non-residents. ¹

1.1 Business travel

Business travel covers the expenditures of travellers visiting another economy for business reasons-such as sales, marketing or commercial negotiations-and extends to expenditures by carrier crews stopping off or laying over, and employees of government and international organizations on official business. Business travel also covers expenditures by crossborder workers, but as mentioned above, insufficient data bar their identification as such in the Canadian statistics. ² Business travel, like personal travel below, includes spending on goods for personal use as well as for accommodation, food, recreation and local transport.

1.2 Personal travel

Personal travel covers travel for health, education and other personal reasons. This includes travel expenses of employees of international organizations when they travel outside their country of residence for personal reasons.

1.2.1 Health-related travel

In theory, health-related travel refers to all expenditures in another country by medical patients. Persons accompanying or visiting such patients may also indicate the purpose of their travel as health-related. Two types of health-related services are covered in Canadian data: those by hospitals and those provided by physicians' offices. The out-of-pocket expenditures on goods and services by persons travelling for health-related purposes should also be included here, but Canadian statistics record these expenditures in other personal travel, due to data limitations.

1.2.2 Education-related travel

Again in theory, education-related travel should include all expenditures in another country by students. But for practical reasons, Canadian statistics include only outlays of post-secondary students; that is, only outlays on full-time university and college programs, which generally extend over more than one year, are included. Recorded outlays include all expenditures by post-secondary students studying abroad-that is, expenditures for tuition fees and course materials, together with accommodation and general living expenses. Except as incidentally covered in other personal travel, spending for primary and secondary schooling remains to be estimated in Canadian statistics. Certain further expenditures on institutional education (such as for personal interest courses) also remain in other personal travel because of data limitations.

The fact that travel outlays are collected from the consumer rather than the supplier (see section 4.1) sets up a potential duplication between, for example, the foreign visitors' spending on a commercial training course, and the same course reportable as earnings from abroad by the Canadian supplier. Historical response rates for the travel series, however, have made it difficult to establish that non-institutional education services as such would be extensively represented. All receipts and payments reported as commercial education in miscellaneous business services are accordingly included in the commercial services account. Self-employed earnings by instructors are outside the scope of travel, and are not surveyed in any case.

1.2.3 Other personal travel

Other personal travel includes outlays for leisure travel, including participation in sports, artistic, cultural or recreational events. Spending on visits with relatives and friends and for religious purposes is also included here. As previously discussed, other personal travel also includes some expenditures on health and education that cannot be identified separately, for example, expenditures on full-time programs of less than a year as well as some spending by international students at elementary and secondary school levels.

2. Data sources

The Culture, Tourism and Centre for Education Statistics Division of Statistics Canada compiles the basic Canadian travel statistics. These statistics are derived from a combination of census data and sample counts of travellers crossing the border, coupled with sample surveys used to collect specific information from travellers, including their expenditures and main purpose of visit (business or personal). ³

The Canada Customs and Revenue Agency collects information on the number of crossings at frontier ports and distributes the travel survey questionnaires. The frontier count is made by categories, based on mode of transportation (including, in the case of highway and ferry points, cars, trucks, motorcycles and bicycles). Complete counts are taken at all but seven points of entry where automobile, motorcycle and bicycle flows are estimated from samples. The questionnaires that collect the travel expenditure data are distributed according to pre-arranged schedules to non-resident ⁴ travellers upon entry to Canada, or to residents of Canada upon their return from travel abroad. Completion of the questionnaires is voluntary and travellers are asked to mail their completed questionnaires directly to Statistics Canada. Beginning with the reference year 2000 a new air exit survey introduced on site interviews for overseas travel at eight key airports.

In business travel, estimates of spending by crews (of airplanes, ships, boats, trains and trucks) are calculated by the Culture, Tourism and Centre for Education Statistics Division.

Historical series and recent extensions to coverage of health-related travel were developed by the Culture, Tourism and Centre for Education Statistics Division and the Balance of Payments Division. The receipts data for health consist of foreign spending for hospital services in Canada, as recorded from the annual hospital survey of the Canadian Institute for Health Information, with projections for recent years where survey results are not yet available. Recent estimates for physician services linked to U.S. data on the payments side were introduced with the 1995 reference year.

The series on health-related payments was largely limited to hospital and physician charges as paid under provincial health plans for Canadian residents travelling abroad. Starting in 1995, access to U.S. sources has enabled a fuller estimate covering payments beyond provincial health plans at major medical centres and university hospitals.

On the receipts side of the education series, the Culture, Tourism and Centre for Education Statistics Division produces the estimates by combining the time series on the number of students with average tuition and adding estimates of other expenditure. For expenditures of Canadian students in the United States, the data have been supplied by the U.S. Bureau of Economic Analysis from 1981 onward and were linked with balance of payments data for prior years. Data on student expenditures overseas are updated by the Culture, Tourism and Centre for Education Statistics Division to incorporate volume and expenditure estimates.

In recent years, lags in enrolment data have increased the scope for revision. A re-estimation since 1995 of foreign students studying in Canada has been made by the Culture, Tourism and the Centre for Education Statistics Division and linked at 1998. The revisions incorporate a more current estimate of the number of full time university students and the spending per student. The effect of these changes and changes in the air travel series are noted in the Annual Revisions section of 67-001, First Quarter 2004.

3. Methods

The Culture, Tourism and Centre for Education Statistics Division processes the monthly data on counts of travellers and the quarterly expenditure factors, and provides the spending results to the Balance of Payments Division. The latter division seasonally adjusts the quarterly travel expenditures.

3.1 General methodology

Specific methodology is described in the Culture, Tourism and Centre for Education Statistics Division publication, International Travel, which is released annually.

3.2 Extended geographical breakouts

Six geographical areas have long been the basis for balance of payments presentations-the United States, the United Kingdom, Other European Union, Japan, Other OECD and Other Countries. This presentation is still used for sub-annual and detailed presentations on services and continues to serve well, as the three countries identified separately often comprise a significant share of total services trade. In 2000, the present publication expanded the geographical breakout of total travel receipts and payments.

For basic travel spending (covering some 80% of all travel outlays), estimates by country are available directly from the international travel survey. The other 20% of travel expenditures are not available for all individual countries and have to be allocated to countries within the three standard country groupings. Health-related transactions are allocated by basic travel spending in proportion to the travel undertaken. Travel specifically for obtaining medical treatment is taken as occurring largely with the United States, for which there is an existing estimate.

Education-related receipts are proportioned by the number of foreign students; this information is collected from administrative sources. Note, however, that fees and living costs in Canada are not specific to a student's country of residency. Payments are estimated according to UNESCO data on the number of Canadian students who study abroad. The relative cost of living overseas is also taken into account, based on indexes developed by the Prices Division of Statistics Canada. Spending by foreign crews is dominated by airplane crew spending. The expenditures of foreign air crews is distributed by the supporting service outlays made by foreign airlines serving Canada (captured by a Balance of payments survey) and, in the case of payments, by the number of outward flights to first-stop destinations by Canadian carriers. The latter information is supplied to the Culture, Tourism and Centre for Education Statistics Division by the Transportation Division.

4. Products

4.1 Data accuracy

The data accuracy on travel is acceptable. The counts of travellers are most reliable, while the response rates for the questionnaire on expenditure factors and other characteristics have remained low. It should be noted that earlier validation work included a prominent component of expenditures by Canadian travellers abroad-namely spending on goods. This was estimated for 1990 and 1991 through analysis of related administrative data. ⁵

With the data releases of the first quarter 2002, the coverage of spending by travellers moving through key airports has been raised as a result of new survey methodology and sample adjustment by the Culture, Tourism and Centre for Education Statistics Division. Response for overseas travel stood at 93% for 2000 and at 96% for the year 2001 while geographic patterns have been made more reliable. In co-operation with the Balance of Payments Division, CTCES produced link estimates to the latest unrevised year, 1997 and preliminary estimates for 2000 and 2001. Final estimates for 2000 and 2001 have been reported by CTCES in August 2002. With the first quarter 2003 release of Balance of Payments data, final data for 2001 and 2002 have been included and a new link with the most recent unrevised year (1998) was made again.

Some breaks in the data in the mid-1990s result from additional coverage of receipts and payments for health-related travel.

Unlike most goods and services, travel is collected on the basis of spending by the consumer, as opposed to being represented by sales of the provider. This approach to travel, set out in international standards, best ensures maximum coverage for balance of payments reporting. Whereas most trade data are presented on a commodity basis, travel includes both goods and services. Therefore commodity expenditures are not identified separately in the balance of payments statements.

4.2 Data accessibility

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

The series on travel are published in the present annual publication Canada's International Trade in Services, (also available in both print and electronic versions) and in CANSIM for the six geographical groupings: United States, United Kingdom, Other European Union, Japan, Other OECD and Other Countries. Additional quarterly and annual details are published for business and personal travel. ⁶ Business travel is further identified between crew spending and other business travel. Personal travel is further broken down between health, education and other travel.

A detailed geographic breakout for trading partners other than the United States, United Kingdom and Japan shows an annual time series of travel on a total basis from 1990-that is, inclusive of health, education and crew spending. These detailed breakouts began with the 1998 edition of Canada's International Trade in Services, and are also published in CANSIM.

The Statistics Canada Culture, Tourism and Centre for Education Statistics Division publishes separate monthly, quarterly and annual releases on the outlays and other characteristics of travellers, for example through its annual release, International Travel.