Estimating the margins on inputs

Once OATS TRIs and nTRIs have been calculated at basic prices for all non-transportation industries by mode, the trade and transportation margins are calculated. The taxes on products are also estimated. The Canadian SUTs include 32 margins. Together with the taxes on products, these margins represent the mark-up that purchasers have to pay to buy a certain product. Using the published SUTs, margin ratios are calculated for each industry, product and margin combination. The margin value is divided by the basic price value of the product.

These ratios are applied to the OATS TRIs and nTRIs in each of the four transportation modes to determine the margins paid on OATS inputs. In some cases, the calculated level of margin may be higher than what is available to move to the OATS industries. If so, the margin is reduced proportionally in each mode to match availability. The margins are aggregated by industry and appended to the OATS use tables at basic prices. In cases where the product’s value at basic price captures both a margin and a demand component (as in some transportation products), the margin portion is removed before the margin ratio is applied.

The OATS TRIs, nTRIs and margin aggregates together form the OATS intermediate use tables at basic prices by mode.