Canada’s trade in services by industry ■ Statistics Canada Presentation for OECD-Eurostat Expert Meeting on Trade in services September 19th, 2007

Description of Canadian statistics Issues with the current methodology Presentation Description of Canadian statistics Issues with the current methodology Redesign of the trade in services program: improved methodology

Description of Canadian statistics Transactions by industry available for commercial services (all services excluding travel, transportation and government services) 26 categories of commercial services 8 industrial groups: 2 for goods and 6 for services Based on North American Industrial Classification (NAICS) 1 memorandum item for ICT industry No geographical breakdown Available since reference year 1999 Plan to backcast to 1990 NAICS has 20 major categories and 24 2-digits categories 5 categories in goods-related production and 15 in services-related production Prior 1999, data by industry were available on the base of Standard Industrial Classification – Company and enterprise, a StatCan classification Backcast at micro level or macro level?

Commercial services by category and by industry 2005 Based on North American Industrial Classification System Commercial services by category and by industry Total, goods producing industries Manufacturing [31-33] Other goods producing industries Total, services producing industries Trade and transportation Information, culture and arts Finance and insurance [52] Professional, scientific & technical services [54] Management of companies & enterprises [55] Other services producing industries Memorandum item: Information & communication technology CREDITS (in millions of C$)   Total, commercial services 6,158 5,401 757 30,731 3,800 7,337 6,351 9,991 921 2,330 10,163 Communications services 200 195 5 2,430 998 1,278 68 30 55 1,519 Construction services 57 52 165 11 125 28 1 Insurance services 3,877 3,640 231 Other financial services 8 3 1,914 2 39 1,719 64 12 78 41 Computer and information services 168 147 20 4,585 313 1,559 174 2,423 36 81 3,811 Royalties and licence fees 812 799 13 2,635 379 1,285 10 884 1,685 Non-financial commissions 104 97 7 738 569 14 86 59 6 311 Equipment rentals 15 305 190 4 111 Management services 1,110 892 218 4,018 385 309 647 1,860 468 350 863 Advertising and related services 40 462 53 185 34 Research and development 1,030 1,011 19 1,778 539 216 978 35 1,159 Architectural, engineering, and other technical services 1,265 890 375 3,418 160 21 3,001 192 304 Miscellaneous services to business 1,078 1,001 2,144 170 470 339 33 1,131 413 Audio-visual services 260 2,034 32 1,977 18 Personal, cultural and recreational services 229

Commercial services by category and by industry 2005 Based on North American Industrial Classification System Commercial services by category and by industry Total, goods producing industries Manufacturing [31-33] Other goods producing industries Total, services producing industries Trade and transportation Information, culture and arts Finance and insurance [52] Professional, scientific & technical services [54] Management of companies & enterprises [55] Other services producing industries Memorandum item: Information & communication technology DEBITS (in millions of C$)   Total, commercial services 11,736 10,557 1,179 26,767 4,455 5,995 8,658 4,622 655 2,382 6,207 Communications services 14 13 1 2,420 823 1,414 119 41 23 1,515 Construction services 141 85 56 65 32 4 28 Insurance services 73 12 5,474 17 3 5,149 257 45 5 Other financial services 57 46 2,795 15 2,568 94 44 70 16 Computer and information services 226 185 1,942 356 460 126 934 54 1,135 Royalties and licence fees 3,979 3,833 145 4,338 1,516 1,437 717 37 608 1,526 Non-financial commissions 285 282 340 267 25 8 2 39 Equipment rentals 34 993 633 38 310 Management services 2,527 2,161 366 2,710 537 303 631 870 51 319 1,302 Advertising and related services 118 116 320 24 82 89 78 21 Research and development 893 858 35 438 49 53 256 52 26 387 Architectural, engineering, and other technical services 831 568 264 1,420 40 1,252 87 19 72 Miscellaneous services to business 2,500 2,293 207 1,219 142 262 6 566 113 Audio-visual services 2,086 1,984 74 Personal, cultural and recreational services 206

Description of Canadian statistics Large concentration of services in few industries Limited number of published industrial categories Statistics compiled at NAICS-6 digits level Published at NAICS-2 digits or even less Frequent requests from users as lack of details for published statistics Increasing interest in these statistics for issues such as outsourcing

Issues with the current methodology Strength of using diversified sources vs. weakness of using different sources Current industrial classification extracted from different sources but not consistently updated Sources used: Main survey on international trade in services Large number of specialized surveys covering specific industries Administrative data on trade between affiliates Sources cover diverse parts of the units (enterprise, establishment, etc.) No link with central Business Register (BR) BOP had its own frame BOP has its own frame which worked not too bad for investment but was a problem for services because the numerous sources used to compile statistics Conversion from SICC-80 to NAICS 1997 at the end of the 90’s. It was not all done for each unit. Some units were converted using a conversion table. At that time, there was a static link done with BR

Issues with the current methodology Possible duplication Not an accurate portray of the units (could still estimate for an inactive unit) No consistent treatment between units Interrogation about data quality = limitation of published categories Difficulty to link data with other economic statistics Part or totality of the same unit could be surveyed from different sources Industrial classification was not seen as a key indicator Project on glbalisation

Redesign of the trade in services program Global project to improve trade in (commercial) services program Objectives: Improve coverage, methodology, questionnaires, compatibility with other statistics, etc. Involve a link with the Business Register Complete structure of the unit will be available in the new BR Industrial classification extracted from Business Register Industrial classification based on the dominant activity Industrial classification (NAICS) will be an important indicator for the stratification of the services sample

Redesign of the trade in services program First step [fall 2007]: Link BOP units with Business Register Find the appropriate top enterprise for each unit Eliminate non-matches Able to provide inputs to Business Register Change in the collection process: Is the top enterprise always the best to provide statistics?

Redesign of the trade in services program Second step [winter 2008]: Use Business Register to determine the target population and the sample Establish criteria of selection based on known trade in services activities, industrial classification, and revenues Over sampling certain industries

Redesign of the trade in services program Third step [2009?]: Increase the level of published details for trade by industry More confident in statistics due to better and more consistent methodology Probable break in time series Link micro data on trade in services with other economic micro data (employment, investments, etc.) Other projects: Export and import registers Reactive statistics on country of control

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