The Canadian Business Register UNSD – IBGE Workshop on Manufacturing Statistics Lima, Peru Kevin Roberts Kevin Roberts August, 2008 August, 2008 Statistics Canada Statistique Canada

Overview of the Presentation 1.0 Statistic’s Canada’s Manufacturing Statistics Program 2.0 The Business Register 2.1 Coverage – Business Types, Activities 2.2 Data Sources and Maintenance 2.3 Structure 2.4 Re-design of the Business Register 2.5 Interface 2.6 Survey Process and the Business Register Statistics Canada Statistique Canada

Manufacturing Statistics Program  Annual Survey of Manufactures and Logging (ASML)  Monthly Survey Of Manufacturing (MSM)  Commodity Surveys (sub-annuals)  Survey of Employment, Payrolls and Hours in Canada  System of National Accounts  Import and Export Data  Industrial Product Price Index (IPPI) Statistics Canada Statistique Canada

Annual Survey of Manufactures and Logging (ASML)  A comprehensive program measuring the structural composition of manufacturing industries in Canada  Collects detailed revenue and expense data  Detailed information on commodities produced and consumed  Characteristics data such as Destination of Sales, Employment Levels and Energy Consumption Statistics Canada Statistique Canada

Revenue and Expenses Financial data collected – detailed revenues and expenses Use of Chart of Accounts Standard (COA) Layout reflects Income Statement ASML - Questionnaire

Characteristic Data Commodity data collected for each sector Use of North American Product Classification Other variables – Employment, Destination of Shipments

Monthly Survey of Manufacturing (MSM)  A key indicator of the economic condition of manufacturing industries in Canada – levels of output  Provides values for sales, inventories and new and unfilled orders  An analytical overview disseminated each month (e.g. values by sub-sector) describing current trends within the context of Canada’s economic environment Statistics Canada Statistique Canada

MSM Questionnaire Monthly Survey Single page form Collects key industry indicators – Sales, Inventories and Orders

Survey Characteristics – MSM & ASML  MSM - Levels of key indicators (e.g. sales, inventories, trends)  ASML - Detailed statistics/structural analysis  Use of standard industry classification – North American Industry Classification System (NAICS)  Standard financial classification system – Chart of Accounts (COA)  Use of STC’s Business Register  Estimates based on survey and administrative data sources Statistics Canada Statistique Canada

Sub-annual Commodity Surveys  A cost recovery program  Collects detailed commodity information – sales and quantity data  Covers many different industries based on client needs  Examples include:  Tobacco Production  Sawmills  Mineral Wool  Cement Production Statistics Canada Statistique Canada

What is the Business Register ?  The Business Register is a structured list of businesses engaged in the production of goods and services and is used to:  Determine in scope population  Select a sample  Support collection activities & monitor respondent burden  Support/perform business demographics analysis  The BR supports a program of information, collection and compilation that meets the needs of a number of conceptual frameworks, based on national accounting and other conventions Statistics Canada Statistique Canada

Why a centralized BR at Statistics Canada? Coverage Cost Effective Harmonization of concepts Integrated A centralized business register provides the framework for production of coherent statistics and facilitates analytical studies that link data from different surveys

Coverage of the Business Register  All businesses producing goods & services in Canada  Including:  Canadian subsidiaries of foreign enterprises  Canadian embassies abroad  Foreign subsidiaries of Canadian enterprises  Excluding:  Foreign embassies in Canada Statistics Canada Statistique Canada

Coverage – Types of Business  Business Corporations  Self-employed individuals  Government entities  Non-profit organizations  Co-operatives  Partnerships and Joint Ventures Statistics Canada Statistique Canada

Coverage – Activity  Agriculture, Forestry, Fishing & Hunting  Mining & Oil & Gas  Utilities  Construction  Manufacturing  Wholesale Trade  Retail Trade  Transportation & Warehousing  Information & Cultural  Finance and Insurance  Real Estate & Rental & Leasing  Professional, Scientific & Technical Services  Management of Companies & Enterprises  Administration & Support, Waste Management & Remediation  Educational Services  Health Care & Social Assistance  Arts, Entertainment & Recreation  Accommodation & Food  Other Services  Public Administration

Key Variables Identification variables Legal & operating name Legal & operating address Phone number Contact name Business number assigned by the Canada Revenue Agency Statistics Canada Statistique Canada

Key Variables (continued) Stratification variables North American Industrial Classification (NAICS) 6 digit code that describes the industrial activity Geographic variables Provincial code Sub-Provincial codes Size variables Gross Business Income Number of Employees Statistics Canada Statistique Canada

Sources of Information  Primary source of information is the Business Number registration process maintained by the Canadian Revenue Agency (CRA)  Unique identification number for Businesses Statistics Canada Statistique Canada

Business Number Structure Legal Entity Revenue Canada BN Registration Revenue Canada Programs Paper Limited 5000 Main Street Toronto, Ontario K1Z 9A1 Business Number BN: RC: Corporate Income Tax RT: Goods & Services Tax RC One Account RT One Account RP 12 Accounts RM 5 Accounts RP: Employer Source Deductions RM: Import / Export

Maintenance - Source of Updates Complex Enterprises (Done manually) Annual face to face interview (375 largest) Business Register reaction profile (Tel. interview) Business survey feedback (~100 surveys) Non-Complex Enterprises (Automated) Administrative data (Canadian Revenue Agency) Business Number Registration (BN) Payroll Source Deduction Goods & Services Tax (GST) Corporation Tax (T2) Business survey feedback (~100 surveys) Statistics Canada Statistique Canada

Accuracy and Completeness - Issues/Challenges Under-coverage Unclassified entities Duplication of enterprises resulting from business re- structuring (timing) Over-coverage 10% of inactive enterprise not detected Statistics Canada Statistique Canada

Business Register Structure Business Accounting Operating Unit Business Entity  Investment center  Profit center  Cost center  Revenue center  Statistical Structure Statistical Unit Enterprise Company Establishment Location Statistics Canada Statistique Canada

From Business Structure to Statistical units ABC Ltd Profit centre Profit centre Investment centre Operating Structure P P STATGEN Simple Statistical Unit Identification Rules BN  Statistical Establishments Statistical Locations   Statistical Enterprise Statistical Company  

Statistical Flag Propagation - STATGEN  A fully automated process designed to generate statistical units:  Analyzes the business entity structure and the responsibility centers  Delineates the statistical units  Classifies the statistical units  Assigns data attributes Statistics Canada Statistique Canada

Business Population Profile Business Population # BE % BE % Revenue Simple 2,239K99.1%38% Complex 21K0.9%62% Sub-Pop of Complex excluding public sector # BE % Complex BE % Complex Revenue 1 Province & 1 Industry10K48%5% Multi-Prov. & 1 Industry.4K19%8% Multi-Ind. & Multi-Le & Multi-Prov 6K29%66%

Re-development of the Business Register  The way business in Canada is done has undergone major changes since the mid-1980s when the original BR was implemented.  Technology has undergone change and STC has committed to removing the BR from the mainframe platform by  The rules and operational processes for updating units of the Register were too complex and the system was too inflexible to incorporate significant change. Statistics Canada Statistique Canada

The New Business Register  PC-Windows based application using an SQL Server database and VB.Net  A simplified version compared to original BR design  Provide better tools for data collection and subject matter areas  Direct real-time online updates for all BR users Statistics Canada Statistique Canada

Simplification of the BR Model LE1 BE 1 OP 1OP 2 Statistical Entities Ent Co Est. 1 Loc. 1 Est. 2 Loc. 2 Legal Entity & Operating Entities BN for LE1 CE 1 CE 2

Business Register Interface

The BR displays all the elements of a business in one structure

Business Register Interface The register records ownership links between Legal Entity (LE) and foreign ownership of Canadian LEs and foreign holdings of Canadian LEs

Survey Process Flow (front end) Business Register Database Statistical Entities Collection Entities Workload Universe File 1Create 2Sampling Sample File 5 Complete Sample File 4 Create Collection Entities ToMail-out 3 In Sample Updates Subject Matter Business Register Collection Methodology Sample File

9SurveyFeedback &Responses & Responses 11 Auto Updates 8SurveyDataCollection 7Respondents Questionnaires Manual Updates 6SurveyMail-out 10ReviewFeedback Business Register Database 12ManualUpdates Logout File Automatic Updates Survey Responses Survey Process Flow (back-end) Subject Matter Business Register Collection Methodology

Business Register – SUF Example Generic Survey Universe File Statistics Canada Statistique Canada IC S PC S RC S RC S RC S PC S CC S PC S Each row corresponds to a production unit (a box above).

Business Register – Overall Principals It is important to: Have a good source of administrative data Ensure that the data is of the best possible quality Develop a relationship of trust with large businesses Automate the updates as much as possible Standardize the procedures Use accepted standards (geographic, classification, etc) Use the business register to supply frame to all economic surveys (economy of scale and survey feedback) Statistics Canada Statistique Canada

Contact Information Kevin Roberts Manufacturing and Energy Division Statistics Canada Jean Talon Building, 11th Floor Tunney's Pasture Ottawa, Ontario, Canada KIA 0T6 Telephone: (613) Fax: (613) Statistics Canada Statistique Canada