Overview of the Canadian Culture Satellite Account

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• 2.1 Key definitions and concepts in the Culture Satellite Account
• 2.2  The Canadian System of National Accounts and Culture Satellite Account
• 2.3 Canadian Framework for Culture Statistics 2011
• 2.4 Sport in the Canadian Framework for Culture Statistics and Canadian Culture Satellite Account

The Canadian Culture Satellite Account provides a detailed look at the culture and sport industries and domains, it is fully consistent with the CSNA, and thus allows for analytical comparisons. This chapter presents the definitions of key variables and concepts, the accounting framework, and the Canadian Framework for Culture Statistics 2011, which are used in the construction of the Culture Satellite Account.

2.1 Key definitions and concepts in the Culture Satellite Account

2.1.1    Culture and sport

Within the CSA, culture is defined as a creative artistic activity and the goods and services produced by this creative activity and the preservation of heritage. These goods and services must satisfy specific criteria outlined in 2.1.5 below.

Sport is defined as an individual or group activity, often pursued for fitness in leisure time, fun or competition. This includes recreational sports and physical activities, as well as professional, semi-professional or amateur sport clubs and independent athletes that are primarily engaged in presenting sporting events before an audience.

2.1.2    Production and output

Production is the process of combining labour, capital, energy, material and service inputs to produce goods and services.

Output consists of those goods or services that are produced within an establishment that become available for use outside that establishment or in some special cases within the producing establishment. There are three types of output within the CSA: market output and non-market output and for own final use. Market output consists of goods and services sold at an economically significant price, that is, a price that has a significant influence on the amounts that producers are willing to supply and the amounts that purchasers wish to buy. Non-market output comprises goods and services that are not sold on the market and are generally valued at cost. For instance, free art exhibits in which services are provided by volunteers would be considered non-market output. Output for own final use consists of products retained by the producer for their own final use as consumption or investment. Only market and non-market output are measured in the CSA.

2.1.3    Goods and services

The distinction between goods and services is important. A good is a tangible product that can be stocked or placed in inventory. An example of a good is photographic equipment or a book. A service, on the other hand, is generally consumed at the place and time it is bought. Services cover a wide and complex variety of transactions on products that are generally intangible in nature. An example of a service is admission to a live performance or a museum exhibition.

2.1.4    Valuation and pricing

Goods and services in the CSA are valued at basic prices. The basic price of a good or service is its selling price before wholesale, retail and transportation margins and before product taxes like the Value Added taxes. This price reflects the revenues received by producers from the sale of these goods and services. This is different from the market prices which include the margins and taxes noted above to better reflect the price paid by the consumer of the culture good or service.

In order to illustrate the difference between the two consider the following example which decomposes the market price of a culture good/service ($63.25) into its components (basic price, retail margin and taxes).

$63.25 (culture good/service) = $45 (basic price) + $10 (retail margin) + $8.25 (15% HST)

The CSA presents information at nominal or current prices, that is, there is no attempt to estimate the volume of culture goods and services produced in a given year.

2.1.5    Culture products

The CFCS framework uses a number of criteria to determine what is and is not a culture product. A product is determined to be culture if it satisfies the general definition of culture (noted above) and satisfies one or more of the following criteria:^{Note 1}

1. The product must have copyright protection potential.
2. The product must support the creation, production, dissemination or preservation of culture.
3. It adds to the content of a culture product.
4. It preserves exhibits or interprets human or natural heritage.
5. It provides culture training or educational services.
6. It governs, finances, or supports directly culture.

In the context of the CSA, and following the CFCS, culture goods are defined as original and mass-produced goods which contain culture content, resulting from creative artistic activity. A culture service on the other hand is defined to include creative services (which can, in turn, include copyright payments or receipts), content services (services that add to, or alter a culture product), broadcasts, live performances and other culture events (such as museum exhibits).

2.1.6    Culture industries

A culture industry is one for which culture products (goods or services) make up the most significant part of its output. For instance, in the live performance industry, culture products represent the majority of its output even though they have secondary activity related to the sale of food and beverages. The CFCS, and therefore the CSA, also include industries involved in the 'creative chain'.

2.1.7    Industry perspective

The industry perspective is simply the presentation of culture activity by industry. In the CSA set of industry perspective tables, the culture industries are grouped under their respective domains and sub-domains.

2.1.8    Product perspective

The product perspective is simply grouping like products (regardless of industry of origin) together. For example, books may be produced in more than one industry. In the product perspective, all of the activity related to the production of books is grouped together.

2.1.9    Gross Domestic Product

Gross Domestic Product (GDP) or value added is a key measure of economic performance in the CSA. It represents the output of an industry minus the value of intermediate inputs that were used up in the production of the culture goods and services.

2.1.10  Employment

Employment data (i.e., number of jobs) comes from the Canadian Productivity Accounts of the CSNA. It represents the number of jobs held by the self-employed, employees and unpaid^{Note 2} family workers. It should be noted that a job that exists for only part of the year (e.g., 4 months) counts as only a fraction of a job (1/3 of a job) for the year. It should also be noted that a part-time job at 10 hours a week counts as much as a full-time job at 50 hours a week.^{Note 3}

2.1.11  GDP of culture industries

The GDP of culture industries is the measure of GDP for each of the culture industries. It covers all of their outputs – culture and non-culture products. For example, the performing arts industry may generate GDP from both admissions to live performances (a culture activity) and food and beverages services (a non-culture activity). The GDP for both activities is included in the GDP of culture industries.

This is the standard measure of industry based GDP, consistent with previous Statistics Canada studies^{Note 4} of culture's economic contribution in Canada. It is the measure to use for inter-industry comparisons.

2.1.12  Culture GDP

Culture GDP is the value added related to the production of culture goods and/or services across the economy regardless of the producing industry. For example, for the performing arts industry which may generate GDP from admissions to live performances and food and beverages services (a non-culture activity) only the GDP from admissions to live performances (the culture activity) will be counted. However, it will also include any GDP from admissions to live performances produced outside of the live performance industry.

The culture GDP measures the GDP from the production of all culture goods and services in the Canadian economy – regardless of the industry in which they are produced

2.1.13  Employment in culture industries

Employment in culture industries is measured by the number of jobs in each of the culture industries. It covers all jobs in the industry required to produce both culture and non-culture output. For example, the performing arts industry may require an individual to collect admissions tickets to a live performance (job from culture activity) and a bartender in the food and beverages services (a job from a non-culture activity). Both jobs are included in the estimate of employment in culture industries.

2.1.14  Culture jobs

Culture jobs are defined as the number of jobs that are related to the production of culture goods and/or services in that industry. Therefore it covers only the jobs in the industry required to produce culture activities. Using the example above, only the individual selling admissions tickets would be in the estimate of culture jobs.

2.1.15  GDP of sport industries

The GDP of sport industries is the measure of output from all sport industries. It covers all of their outputs—sport and non-sport products. For example, a sporting event may generate GDP from both, admissions to the sporting event (a sport activity) and food and beverages services (a non-sport activity). The GDP associated with both of these products would be included in the GDP of sport industries.

2.1.16  Sport GDP

Sport GDP is defined as the value added in an industry that is related to the production of sport goods and/or across the economy regardless of the producing industry. For example, for a sporting event which generates GDP from admissions to sporting events (a sport activity) and food and beverages services (a non-sport activity), only the GDP from admissions to sporting event (the sport activity) will be included in Sport GDP. However, it will also include any GDP from admissions to sporting events produced outside the sport industries.

2.1.17  Employment in sport industries

Employment in sport industries is the number of jobs in each of the sport industries. It covers all jobs in the industry required to produce both sport and non-sport products. For example, a sporting event will need jobs for both admissions to sporting events (a sport activity) and food and beverages services (a non-sport activity). Both of these jobs will be included in the estimate of employment in sport industries.

2.1.18  Sport jobs

Sport jobs are defined as the number of jobs that are related to the production of sport goods and/or services regardless of the industry. For example, a sporting event may have two jobs: a job collecting admissions to sporting events (a job from sport activity) and bartender in the food and beverages services (a job from non-sport activity). Only the job of the person collecting admissions tickets to sporting events (job from culture activity) is included in sport jobs.

2.2  The Canadian System of National Accounts and Culture Satellite Account

The Canadian System of National Accounts (CSNA) is compiled according to an internationally recognized economic accounting standard (2008 SNA). It provides a set of interrelated accounts and a set of concepts, definitions, classifications and accounting rules for compiling and integrating economic data to give a comprehensive picture of the economy and how it works. The CSNA can be used to analyze the production and the use of goods and services by industry, the income generated in production, and the demand for goods and services from households and governments and non-profit institutions serving households. The CSA is an extension of the CSNA which focuses on the economic transactions specifically related to culture and sport.

Satellite accounts, such as the CSA, have the structure and principles of the national accounts but are developed as an extension to the core national accounts system – hence the name "satellite". Since culture or sport are not clearly defined as a "formal� industry within the Canadian economy, it is necessary to identify and extract all the culture or sport content from within the economy and present it in a coherent form—a satellite account. This satellite account provides a framework (i.e., identifies culture/sport industries and products), concepts and definitions which inform us about culture and sport in Canada.

The satellite account presentation adheres to national accounting principles and allows an analyst to compare areas of interest (culture, tourism, etc.) with the entire economy. With the CSA, given its focus on culture and sport, one can answer questions like: What is the economic importance of culture and sport in Canada? The ability to measure culture against the rest of the economy is a very important reason for working within the structure of the CSNA.

The CSA is essentially a detailed rendition of the culture and sport portion of the CSNA for which the CFCS provides the concepts, definitions and classification used to filter economic activity related to culture and sports. The relationship between the CSA, CFCS and CSNA is described in Figure 1 below.

Description of Figure 1

Figure 2 below shows schematically the conceptual framework of the CSA. At the top left is the CSNA with the Input-Output (I-O) Accounts highlighted and explained in section 2.2.1 below.. It is within the I-O Accounts that the I-O tables are constructed using surveys, tax, customs and other administrative records. These source data are processed to be consistent with the definition and accounting rules used in the CSNA. On the top right is the CSA source data originating from the various industry surveys and other administrative source and discussed in section 2.2.2 below. Data from both these sources are incorporated into the CSA.

Description of Figure 2

2.2.1  Input-Output tables

The Input-Output (I-O) tables contain the most comprehensive and detailed statistics relating to production, intermediate use and final consumption of goods and services in the Canadian economy. They measure economic activity by industry as well as by product. They are the primary building block of the CSA.

As their name suggests, I-O tables contain two important dimensions: the output table and the input table. The output table shows the goods and services produced by each industry in the Canadian economy. In most cases, domestic production or output of an industry is simply its sales or shipments adjusted for changes in inventories, measured at basic prices. Estimates of the supply (output) of culture products in the CSA originate in the output table.

The input table shows the goods and services used by each industry in the production of their goods and services. This table also shows the costs of "primary inputs� used in production, including labour income, income of unincorporated businesses, other operating surplus and net indirect taxes (often referred to as the payments to labour, capital and appropriations by government).

From these tables it is possible to derive a measure of value added or gross domestic product by taking the output of an industry and subtracting the intermediate inputs used in the production of that output. The estimates of Culture GDP and GDP of culture industries (as well as Sport GDP and GDP of sport industries) are based on the data reported in these tables.

The I-O classification for industries, Input Output Industry Classification (IOIC), is a variant of the North American Industry Classification System (NAICS) 2007. The I-O classification for commodities is a variant of the North American Products Classification System (NAPCS) 2007. At the most detailed level, the I-O tables are composed of 481 commodities (including 71 that are defined as 'culture products' in the CSA) and 234 industries (45 of which are identified as 'culture industries').^{Note 5} These 45 I-O culture industries disaggregate into 152 six-digit NAICS 2007 culture industries.^{Note 6}

2.2.2  Industry surveys and other information

In addition to the Input-Output tables, other information is used to construct the CSA. This includes several surveys covering: amusement and recreation; book publishers, film and video distribution; film, television and video post-production; film, television and video production; motion picture theatres; newspaper publishers; performing arts; heritage institutions; and periodical publishing.^{Note 7} They produce biennial estimates for selected financial variables and industry characteristics. Other surveys such as retail trade, wholesale trade and manufacturing, as well as available tax data were also used to build the CSA.

For education, annual enrollment (headcount) data from the Postsecondary Student Information System was used in order to distinguish culture education programs or education programs related to sport from the other programs. As this source of information is available annually, it is more up to date than the Census of Population and National Household Survey. These data were classified according to a detailed classification system: the Classification of Instructional Programs (CIP). CIP allowed for the selection of enrollments for specific culture programs (or fields of study) and specific sport programs according to pre-established codes. A sub-set of pre-established education codes had been determined in the CFCS 2011.

For government support, government expenditures from the Survey of Federal Government Expenditures on Culture, and Survey of Provincial/Territorial Government Expenditures on Culture were used. This information was used to estimate the culture and sport portion of the CSNA government industries.^{Note 8}

Employment data (i.e., number of jobs) used in the CSA comes from the Canadian Productivity Accounts of the CSNA. These accounts provide information on employment following CSNA principles and using I-O industries. At the aggregate level, the number of jobs in this database is benchmarked to the Labour Force Survey (LFS). The industry distribution of these jobs, however, is primarily based on information from the Survey of Employment, Payrolls and Hours, although other industry surveys and administrative sources are used as well. For a complete list of survey data used in the CSA see Appendix E.

2.3  Canadian Framework for Culture Statistics 2011^{Note 9}

The Canadian Framework for Culture Statistics 2011 (CFCS) was developed by Statistics Canada in consultation with the Department of Canadian Heritage and other culture stakeholders^{Note 10}. The framework consists of two elements. The first, articulated in the Conceptual Framework for Culture Statistics 2011 publication, provides standard concepts, definitions and classifications for consistent and comparable statistics on culture. The second is detailed in the publication titled Classification Guide for the Canadian Framework for Culture Statistics 2011 and is a supporting guide which maps the classification systems used in Statistics Canada (e.g. NAICS, NAPCS, and NOCS) to the framework.

Culture can be very broadly defined and include for example, religious and spiritual practices and political ideologies and processes. However these notions of culture are too broad for establishing boundaries when defining culture for statistical purposes. In Canada, culture is defined as "creative, artistic activity and the goods and services produced by it, and the preservation of heritage.�^{Note 11} Another useful conceptual construct from the CFCS is the notion of the "creative chain� (see Figure 3) which is defined as the "series of steps by which a culture good or service is created, developed, perhaps manufactured, and distributed or made available to end-users.�^{Note 12}

Description of Figure 3

Taken together, the definition of culture activity and the creative chain for culture goods and services imply a range of activities and related transactions reflected both implicitly and explicitly already in the CSNA. In this context, these activities translate into production of certain products taking place in certain industries and sectors of the economy. So, for instance, an author engages in creative, artistic activity by writing a manuscript of a novel on contract to a book publisher, who in turn purchases design services for a cover from a graphics design firm. Further activities involve the publisher transforming the manuscript into a book, managing copyright and licensed materials and producing copies including already copyrighted or licensed materials, for distribution through wholesalers to retailers (dissemination, in Figure 3). Retailers in turn sell the book to consumers (final demand or use). This example illustrates that while not all of the activities included in the chain are creative (e.g., dissemination), all of them add value to the culture product as it goes through the various stages of production.

The CFCS uses its own unique categories for conceptual and measurement purposes. These categories are referred to as domains and sub-domains and are illustrated in Table 1. The domain perspective is a construct that presents culture and sports estimates from the perspective of the creative chain. It is the re-grouping of products similar in purpose even though these products may be dispersed across various NAICS, Hence the written and published works domain would include all the economic activities from the creation to the final product available to consumers. There are six culture domains in total. A sub-domain is a subset of a domain and can be used to identify a number of related industries, products and occupations. For example, 'books' is a sub-domain within the Written and Published Works domain.

According to the CFCS, sub-domains are further disaggregated into: Core culture and Ancillary culture. Core culture sub-domains produce goods and services that are the result of creative artistic activity (e.g., books, works of art and crafts) and whose main purpose is the transmission of an intellectual or cultural concept, whereas ancillary culture sub-domains produce goods and services that are the result of creative artistic activity (e.g., designs, architectural plans), but whose primary purpose is not the transmission of an intellectual or cultural concept.

The CFCS also provides two transversal domains: Education and Training^{Note 13} and Governance, Funding and Professional Support.^{Note 14} Generally, a transversal domain supports all culture domains including each of their sub-domains and allows for movement along the creative chain. For example, this would include training or educational programs for culture professionals or funding for cultural or sport programs. Industries and products within transversal domains are not fundamentally culture but they are an integral part of culture since culture domains could not exist without them. As such, the Framework recommends the inclusion of transversal domains in the measurement of culture. The transversal domains produce goods and services that support all core and ancillary culture sub-domains and are often referred to as "crosscutting domains�. Education and Training, and Governance, Funding and Professional Support are all examples of CFCS transversal domains.^{Note 15}

In the CSA, a third transversal domain has been added for practical reasons – called the Multi-domain. This transversal domain includes five industries where each industry contains some culture content that affects more than one main culture domain. For example, the retail industry "Book, Periodical and Music Stores� (NAICS 4512) is related to both Written and Published Works and Sound Recording. Currently in the CFCS, several culture industries are not associated with any culture domains and sub-domains: the culture portion of convention and trade show organizers; sporting, hobby, book and music stores; internet publishing and broadcasting and web search portal industries. These culture industries all affect more than one culture domain but cannot be easily allocated to a single domain, so they have been aggregated together into the "Multi-domain�.^{Note 16}

The CFCS also includes two Infrastructure domains: the Mediating products and Physical infrastructure domains. For example, the Mediating products domain includes products such as software, computers, MP3 players and eBook Readers which, although not considered culture products, help users to experience and consume culture. The Physical infrastructure domain covers physical venues such as concert halls or buildings, recording or film studios and training centres that enable the creation or use of the culture products. These domains have been excluded from the CSA as they are not directly related in the creation of culture products but support the production and consumption of culture output.

2.4  Sport in the Canadian Framework for Culture Statistics and Canadian Culture Satellite Account

According to the CFCS framework sport is considered a domain related to culture and is therefore measured in the CSA. In Canada, sports and culture are linked in activities such as hockey, skiing, canoeing, skating, swimming, etc. Although these activities have a cultural nature, they are distinct from culture and measured separately. Sport is defined as an individual or group activity often pursued for fitness in leisure time, and can be undertaken for fun or for competition.^{Note 17} Sport participants may or may not be paid or receive prize money for their appearance or performance.

Sport excludes products and services that serve as inputs for producing sport products or providing sport services.^{Note 18} The sport domains in the CSA are illustrated in Table 2 below.

Sport has two core and two transversal domains: Organized sport, Informal sport, Education and Training and Governance, Funding and Professional Support for sport. Organized sport includes spectator sport, sport stadiums and other presenters with facilities and without facilities. Informal sport includes non-profit sport club industries. Education and training includes sport or sport related instruction, the sport portion of expenditures by government in colleges, CEGEPs, and universities. Governance, funding and professional support for sport includes the sport portion of consolidated government expenditures. In the case of sport, non-profit institutions are not considered as a separate sub-domain but as a proxy to measure the size of the informal sport sub-domain.

Notes

1. See CFCS 2011 for more detailed discussion of criteria.
2. Unpaid family workers are persons who work without pay in a business, farm or professional practice owned and operated by another family member living in the same dwelling.
3. This measure of employment differs conceptually from employment measured by the Labour Force Survey (LFS). Within the LFS an individual can only have a single job – within the CSA a person can have more than one job and those jobs can be in different industries.
4. See Statistics Canada, Economic Contribution of Culture in Canada, December 2004 and Economic Contribution of the Culture Sector to Canada's Provinces, March 2007.
5. A full list of the Input Output Industry Classification industries used in the CSA is available in the Appendix B: Culture and sport industries in the Culture Satellite Account.
6. See Appendices B, C, and D for detailed lists.
7. The complete list of surveys used in the CSA is available in Appendix E: Surveys used in the Culture Satellite Account.
8. In the future, Statistics Canada will start using the same system as the International Monetary Fund namely the Government Finance Statistics (GFS). The GFS uses the Classification of Functions of the Government (COFOG) to classify government expenditures.
9. This section presents a quick overview of the Canadian Framework for Culture Statistics 2011, for more detailed discussion, concept and definitions see Canadian Framework for Culture Statistics 2011.
10. For more information see Acknowledgements page in the CFCS 2011
11. CFCS 2011.
12. For more information on creative chain, more examples see the Conceptual framework for Cultural Statistics 2011, Statistics Canada catalogue 87-542 no.2.
13. Education includes the culture portion of expenditures by government in colleges, CEGEPs, universities, trade schools and fine arts schools.
14. The support domain includes among others the culture portion of consolidated government expenditures. For example, federal funding for libraries, art galleries and museums as well broadcasting.
15. Canadian Framework for Culture Statistics (CFCS) 2011.
16. Table 1.1, Classification guide, Canadian Framework for Culture Statistics 2011, Catalogue 87-542 no. 002.
17. Similar to the statistical definition of sport in the "Vilnius definition of sport�, European Union Working Group on Sport and Economics, 2007.
18. Definition of Sport according to the "Vilnius definition of sport�, European Union Working Group on Sport and Economics, 2007.