Administrative Data at Statistics Canada – Current Uses and the Way Forward Wesley Yung and Peter Lys, Statistics Canada

Oct. 14, 2008 Statistics Canada Statistique Canada 2 Outline  Introduction  Tax Data Goods and Service Tax (GST) Annual Tax  Increased use of GST data Monthly Food Services Survey Quarterly Services Indicators  Increased use of Annual Tax data  Summary and Future Work

Oct. 14, 2008 Statistics Canada Statistique Canada 3 Introduction  Statistics Canada has a long history of using administrative data Direct tabulation – Trade statistics Frame maintenance – Business Register  More recently, in business surveys program ‘Replacing’ survey data Take none estimation

Oct. 14, 2008 Statistics Canada Statistique Canada 4 Introduction, cont.  Benefits realized Reduced collection costs Increased data quality  Will discuss two recent methodologies that significantly increase use of tax data and some future uses

Oct. 14, 2008 Statistics Canada Statistique Canada 5 Tax Data  Tax data collected by Canadian Revenue Agency (CRA) Monthly Goods and Services Tax (GST) data Annual tax (T1 and T2) data  Goal of CRA is non-statistical, so very little verification of data performed  Statistics Canada receives data from CRA and ‘processes’ the data

Oct. 14, 2008 Statistics Canada Statistique Canada 6 Tax Data – GST  A tax of 5% levied on all goods and services  Depending on size of business, data remitted monthly, quarterly or annually  Data provided to Statistics Canada 7 to 8 weeks after reference month  Processing at Statistics Canada comprises outlier detection, imputation and calendarization

Oct. 14, 2008 Statistics Canada Statistique Canada 7 Tax Data – GST  Database containing monthly sales for all businesses produced  GST data used by three mission critical monthly surveys  Survey data ‘replaced’ by GST data for a portion of ‘simple’ units and for take none Model needed to account for conceptual differences and timeliness issues  Once replaced, modified GST data treated as survey data

Oct. 14, 2008 Statistics Canada Statistique Canada 8 TS Survey Tax Data TA Note: Simples only TN Tax data – GST, cont.

Oct. 14, 2008 Statistics Canada Statistique Canada 9 Tax data – Annual tax  Two types: T1 – Unincorporated businesses (individuals) T2 – Incorporated businesses  For T1, have electronic filers (~80% of universe) plus 2 variables for entire universe Produce calibrated estimates at aggregated levels  For T2, Statistics Canada receives universe from CRA  ‘Processing’ done at Statistics Canada (outlier detection, imputation, allocation to details…)

Oct. 14, 2008 Statistics Canada Statistique Canada 10 Tax data – Annual, cont  T2 data used in Unified Enterprise Survey (UES)  The UES Consists of over 60 annual business surveys Uses common concepts and methodology  T2 information linked to survey variables through COA (financial variables only) No model needed

Oct. 14, 2008 Statistics Canada Statistique Canada 11 Tax data – Annual, cont  T2 information used to replace survey data for a portion of simple units and take none units  Several different implementations 55% of sampled simples replaced 100% of simples replaced (financial data). Sample for non-financial data 100% of non-sampled simples replaced. Non- financial estimates calibrated

Oct. 14, 2008 Statistics Canada Statistique Canada 12 Tax data – Annual, cont TS TA TN TS TA TN Survey Tax Data

Oct. 14, 2008 Statistics Canada Statistique Canada 13 Increased use of GST data  Current use of GST data restricted due to operational constraints Use of existing systems Trust in tax data  Two sub-annual surveys recently redesigned/developed Opportunity to significantly increase use of GST data  Monthly Food Services Survey (MFSS)  Quarterly Services Indicators (QSI)

Oct. 14, 2008 Statistics Canada Statistique Canada 14 Increased use of GST data – MFSS Combines typical business survey design with a strategy that takes full advantage of tax data  In certain strata, use GST data for all simple businesses and typical survey for complex ones Small sample of simples selected to build model  In other strata, use typical survey design

Oct. 14, 2008 Statistics Canada Statistique Canada 15 Increased use of GST data – MFSS, cont  GST data used for: ~25,000 businesses based on sample of ~500 for model building ~40,000 businesses in take none  Resulted in Significant improvement in quality Reduction in respondent burden

Oct. 14, 2008 Statistics Canada Statistique Canada 16 Increased use of GST data – QSI  Need to improve availability of sub-annual services industries data  Goals of QSI Produce quarter-to-quarter movements Economical  GST data used for all simple businesses, with traditional survey of complex ones No sample of simple businesses to build model

Oct. 14, 2008 Statistics Canada Statistique Canada 17 Increased use of GST data – Challenges  Stability of model parameters (MFSS) Large changes across time Large variability within time  Business status Deaths in GST data identified based on remittance or not

Oct. 14, 2008 Statistics Canada Statistique Canada 18 Increased use of GST data – Challenges  Updating of GST data Monthly updates received from CRA  Late remittances and corrections  Full processing performed to produce another ‘vintage’ of data for particular reference month. Both MFSS and QSI publish revised estimates  Some of the revision coming from ‘reprocessed’ GST data (imputation and calendarization)  Not a true reflection of economy

Oct. 14, 2008 Statistics Canada Statistique Canada 19 Increased use of Annual Tax Data  UES is now over ten years old and is starting to show its age  A major redesign is being planned and increasing the use of tax data is one goal  One possible option Complex businesses continue to be surveyed  Covers both financial and non-financial data  ‘Optimized’ for financial data

Oct. 14, 2008 Statistics Canada Statistique Canada 20 Increased use of Annual Tax Data, cont. For simple businesses, tax data becomes source of financial information  Can tax be used for small complex businesses? Survey simple businesses only to respond to specific program/data needs  Commodities for example  ‘Optimized’ for data needs since financial information coming from tax data

Oct. 14, 2008 Statistics Canada Statistique Canada 21 Increased use of Annual Tax Data, cont. Complex TATS TN Simple Tax Data Full questionnaire (financial and commodities) Commodities only

Oct. 14, 2008 Statistics Canada Statistique Canada 22 Increased use of Annual Tax Data - Challenges  Detailed financial data Not always reported by businesses Allocated using ratios  Commodity data ‘Design’ sample for commodity data  Now designed for revenue  How to coordinate commodity and complex business sample? Need to make commodity and financial data coherent – Calibration

Oct. 14, 2008 Statistics Canada Statistique Canada 23 Increased use of Annual Tax Data – Challenges, cont.  Business status and industry coding Many updates come from survey feedback Nature of business report?  Combine with commodity questions? Close co-operation with CRA to obtain this information?  Acceptance by users Possible break in series

Oct. 14, 2008 Statistics Canada Statistique Canada 24 Summary and Future Work  Use of GST data in MFSS and QSI step in right direction but still some challenges  Plans discussed to increase use of annual tax data but some work still to do  Statistics Canada also looking at broadening and deepening use of tax data Tax schedules Uses outside business survey program

Oct. 14, 2008 Statistics Canada Statistique Canada 25  For more information, please contact:  Pour plus d’information, veuillez contacter :