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Methodology

The following information should be used to ensure a clear understanding of the basics concepts that define the data provided in this product, of the underlying methodology, and of aspects of data quality. This information will provide users with a better understanding of the strengths and limitations of the data, and how they can be effectively used and analysed.

Concepts and variables measured
Coverage
Data sources and methodology
Revisions
Data quality (accuracy)
Comparability of data and related sources

Concepts and variables measured

Labour income, comprising wages and salaries and supplementary labour income, is defined as all compensation paid to employees. Earnings received by self-employed persons or working owners of unincorporated businesses are not included in labour income.

Wages and salaries is an aggregate of many types of payments made to employees. In addition to regular remuneration, it includes directors' fees, bonuses, commissions, gratuities, income in kind, taxable allowances, retroactive wage payments and stock options. Wages and salaries are estimated on a “gross” basis, that is, prior to deductions for employees' contributions to income tax, employment insurance, pension funds etc.

Supplementary labour income, which is defined as payments made by employers for the future benefit of their employees, comprises employer contributions to employee welfare, pensions, workers compensation and employment insurance.

Coverage

Monthly estimates of wages and salaries are published for 16 industry groups. The industrial coverage is based on the North American Standard Industrial Classification system. Data for labour income and supplementary labour income are available at the total industry level. All three series are released for each of the provinces and territories.

Data sources and methodology

Sources

On an annual basis, the Canada Revenue Agency T4 Supplementary file provides both the Canada and the provincial estimates of wages and salaries at the total industry level. Information from various survey divisions within the bureau, along with data from external sources (for example the various provincial Workers Compensation Boards) are compiled, integrated and analysed as part of the process of deriving the estimates of supplementary labour income and in deriving the industrial dimension of wages and salaries.

Major suppliers of data within Statistics Canada include Income Statistics Division, Manufacturing, Construction and Energy Division, Labour Division, Public Institutions Division and Tax Data Division. There are also a host of external and administrative sources of data used.

General methodology

All the components of labour income are analysed for time series consistency, links to current economic events, issues arising from the source data, and finally with respect to coherence.

The wages and salaries data are tied to the Canada Revenue Agency T4 information on an annual basis. The T4 data, however, are only available with a year and a half lag. The most important monthly and current time period projector is the Survey of Employment, Payrolls and Hours.

For further details on definitions, concepts, sources and methods, please refer to the Guide to the Income and Expenditure Accounts, catalogue no. 13-017-X.

Seasonal adjustment

Seasonal adjustment is generally made at the lowest level of aggregation, and seasonally- adjusted aggregates are obtained by summation. Statistics Canada's X-11 ARIMA is used to seasonally adjust series.

Revisions

Estimates for each quarter are revised when those for subsequent quarters of the same year are published and when those for the first quarter of each of the next four years are published. They are not normally revised again except when historical revisions are carried out, usually once per decade. Statistical revisions are carried out in order to incorporate the most recent information from monthly and annual surveys, taxation statistics, public accounts, etc., as well as from the annual benchmarking process with the Input-Output Accounts.

Data quality (accuracy)

No direct measures of the margin of error in the estimates can be calculated. The quality of the estimates can be inferred from analysis of revisions and from a subjective assessment of the data sources and methodology used in the preparation of the estimates.

Comparability of data and related sources

Certain components of labour income can be obtained in survey divisions, but typically the data are not directly comparable. For example, the variable “payrolls” is available from the monthly Survey of Employment, Payrolls and Hours release, but it differs from the Income and Expenditure Accounts wages and salaries measure by certain conceptual adjustments.