The System of National Accounts

In Canada, the National Accounts have been developed since the close of the Second World War in a series of publications relating to their constituent parts. These have now reached a stage of evolution where they can be termed a “System of National Accounts”. For purposes of identification, all publications (containing tables of statistics, descriptions of conceptual frameworks and descriptions of sources and methods) which make up this System carry the term “System of National Accounts” as a general title.

The System of National Accounts in Canada consists of several parts. The annual and quarterly Income and Expenditure Accounts (included with Catalogue Nos. carrying the prefix 13) were, historically speaking, the first set of statistics to be referred to with the title “National Accounts” (National Accounts, Income and Expenditure). The Balance of International Payments data (Catalogue Nos. with prefix 67) are also part of the System of National Accounts and they, in fact, pre-date the Income and Expenditure Accounts.

Greatly expanded structural detail on industries and on goods and services is portrayed in the Input-Output Tables of the System (Catalogue Nos. with prefix 15). The Catalogue Nos. carrying the prefix 15 also provide measures of the contribution of each industry to total Gross Domestic Product at factor cost as well as Productivity Measures.

Both the Input-Output tables and the estimates of Gross Domestic Product by Industry use the establishment as the primary unit of industrial production. Measures of financial transactions are provided by the Financial Flow Accounts (Catalogue Nos. with prefix 13). Types of lenders and financial instruments are the primary detail in these statistics and the legal entity is the main unit of classification of transactors. Balance sheets of outstanding assets and liabilities are published annually.

The System of National Accounts provides an overall conceptually integrated framework in which the various parts can be considered as interrelated sub-systems. At present, direct comparisons amongst those parts which use the establishment as the basic unit and those which use the legal entity can be carried out only at highly aggregated levels of data. However, Statistics Canada is continuing research on enterprise company establishment relationships; it may eventually be feasible to reclassify the data which are on one basis (say the establishment basis) to correspond to the units employed on another (the company or the enterprise basis).

In its broad outline, the Canadian System of National Accounts bears a close relationship to the international standard as described in System of National Accounts, 1993, a joint publication of the Commission of the European Communities, International Monetary Fund, Organization for Economic Cooperation and Development, United Nations and World Bank.

Notice to users

This publication presents information about Canada’s National Income and Expenditure Accounts (IEA). These accounts portray the evolution of the Canadian economy on a quarterly basis. They record the components of income and expenditure, saving and investment, and borrowing and lending of each of four broad sectors of the economy: (i) persons and unincorporated businesses, (ii) corporate and government business enterprises, (iii) government and (iv) non-residents. The sum of the final (non-transfer) income or the final (nonintermediate) expenditure of all domestic sectors equals gross domestic product at market prices, the market value of total production in Canada.

The sectoral structure of these accounts can best be explained through an example. Consider the corporate and government business enterprises sector. Corporations receive income in the form of profits, other investment income and capital assistance from government. They pay out part of that income as interest and dividends, direct taxes or other transfers such as charitable donations, and save the remainder. Corporations also invest in plant, equipment and inventories. To the extent their investment exceeds or falls short of their saving, they either borrow from or lend to other sectors in the form of financial transactions. The net borrowing or lending of a sector is also the difference between financial asset acquisition (bank deposits, purchase of bonds, purchase of equity and so on) and liability acquisition (bank borrowing, bond sales, equity financing and so on). The system as a whole, then, provides two equivalent measures of net lending by sector, which differ somewhat due to statistical errors. The sum of net lending by all sectors must be zero.

Financial transactions are expanded in the Financial Flow Accounts (FFA). The FFA show the details of the financing of economic activity, as well as the economy-wide intermediation of funds, in considerable detail (covering 30 institutional sectors).

Documentation

The concepts, sources and methods of the IEA and FFA are described in the following publications:

A User Guide to the Canadian System of National Accounts, Catalogue No. 13-589-XPE.

Guide to the Income and Expenditure Accounts, Catalogue No. 13-603-XPE, No.1.

A Guide to the Financial Flow and National Balance Sheet Accounts, Catalogue No. 13-585-XPE.

Additional explanations can be found in the technical papers included from time to time in the national accounts publications. A list of previously published papers follows.

For more information

The 55 National Income and Expenditure Accounts (NIEA) tables are available on day of release in a variety of formats, including CANSIM (Statistics Canada’s machine-readable database and retrieval system), diskettes (Catalogue no. 13-001-XDB) and the detailed Tables and Analytical Document (Catalogue no. 13-001-PPB). The latter two can be obtained by contacting the Income and Expenditure Accounts Division’s client services officer by phone (613-951-3810), fax (613-951-3618) or Internet: iead-info-dcrd@statcan.ca. In addition, information officers (613-951-3640) answer questions about the NIEA orally, by mail or by fax. There is a minimum charge of $40 (plus $0.50 per page) for information sent by mail and of $40 (plus $1.50 per page) for information sent by fax. Higher charges apply when the information requested is not part of the official NIEA tables. Payment is due in advance, normally by Visa, MasterCard or American Express. Statistics Canada catalogued publications can be ordered using the tollfree telephone number on the inside cover.