An Integrated Approach to Economic Statistics “The Canadian Experience”

1. An Integrated Approach toEconomic Statistics“The Canadian Experience” Workshop on Manufacturing Statistics for African Countries Peter Lys Director General, Industry Statistics Branch Lusaka, Zambia May 4 to 7, 2009

2. UES Background Integrated Approach Principles Survey Characteristics Integrated Questionnaire Business Register Administrative Data Sampling Collection Data Processing Response Management Management of the UES Future Achievements Overview of the presentation Statistics Canada • Statistique Canada

3. Major project to improve provincial statistics (1996) Occasion to improve consistency, coherence, breadth and depth of business survey data More detailed Industry & Commodity data Creation of Enterprise Statistics Division (ESD) Gradual Expansion of Surveys; Covers 65% of GDP 1.0 Unified Enterprise Statistics - Background Statistics Canada • Statistique Canada

4. Use of Single, Unduplicated Frame - the Business Register Common Sample Design Methodology Maximum Use of Tax Data Reduction of Response Burden Integrated Questionnaire - simple language; harmonized concepts / common variables 2.0 Integrated Approach Principles Statistics Canada • Statistique Canada

5. Centralized Data Collection Enterprise Portfolio Managers Common Generic Processing Systems and Methods Centralized Warehouse for processing and some analysis 2.0 Integrated Approach Principles (continued) Statistics Canada • Statistique Canada

6. Separate Enterprise & Establishment Surveys 64 Establishment Surveys Over 55,000 collection entities representing about 68,000 establishments (17K replaced by tax for Reference Year 2007) Smallest businesses estimated through tax data 3.0 Survey Characteristics Statistics Canada • Statistique Canada

7. Facilitate operations at all survey steps Easier to add or delete content Reduces response burden Allows comparison of data from various sources Capacity to link survey cells with administrative data 4.0 Integrated Questionnaire Statistics Canada • Statistique Canada

8. Since 2002, initiatives to improve response rates and reduce response burden Reduce size of the questionnaire Consistency of questions Common concepts among surveys Questionnaire testing Chart of Accounts Survey instructions on the guide Meta data driven (IQMS) 4.1 Improvements to Survey Content Statistics Canada • Statistique Canada

9. Operating Surplus Shipments Value added Outputs Inputs GDP EBIT Sales Gross profit Operating revenue Cost of sales Expenses 4.2 Chart of Accounts COLLECTION-Data Inputs CONCORDANCE Data Outputs Statistics Canada • Statistique Canada

10. Standardization in business data collection Higher survey response rates Increase in quality of data Comparison of data from various sources Increase efficiency in using administrative data 4.3 Benefits of a Chart of Accounts Statistics Canada • Statistique Canada

11. Store Survey metadata Definitions of variables Codes Edits Derived variables Facilitate operations and changes 4.4 Integrated Questionnaire Meta data System (IQMS) Statistics Canada • Statistique Canada

12. Consistency of questions Same meaning for manufacturing or services industries Operating revenue Investment income Depreciation/ amortization Total operating expenses Some cells specific to some industries 4.5 Bank of Survey cells Statistics Canada • Statistique Canada

13. Specific to each Industry Commodities for manufacturing Details for services Services outputs Services inputs (to come) 4.6 Characteristics Questions Statistics Canada • Statistique Canada

14. Develop and maintain a register of all businesses in Canada (~2.3 million businesses) Provide business surveys with: Survey frames Browse, extract and updating capabilities Measure of respondent burden Source for business demographic data 5.0 Business Register (BR) Statistics Canada • Statistique Canada

15. All businesses producing goods & services in Canada Including: Canadian subsidiaries of foreign enterprises Canadian embassies abroad Foreign subsidiaries of Canadian enterprises 5.1 Business Register - Coverage Statistics Canada • Statistique Canada

16. Identification variables Legal & Operating name Legal & Operating Address Phone number Contact name Business Number assigned by the Canadian Revenue Agency 5.2 Business Register – Key Variables Statistics Canada • Statistique Canada

17. 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 5.2 Business Register – Key Variables (continued) Statistics Canada • Statistique Canada

18. 5.3 BR Structure Business Accounting Operating Unit Business Entity  Investment center  Profit center  Cost center  Revenue center  Statistical Structure Statistical Unit Enterprise Company Establishment Location Location Statistics Canada • Statistique Canada

19. 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) 5.4 Business Register – Source of Updates Statistics Canada • Statistique Canada

20. It is important to: Have a good source of administrative data Ensure that the data is of the best possible quality Develop a good trust with the 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) 5.5 Business Register – Overall Principals and Lessons Statistics Canada • Statistique Canada

21. Obtained from the Canadian Revenue Agency (CRA) Agreement between CRA and STC One way flow T1 (unincorporated businesses) T2 (incorporated businesses) T4 (pay slips) GST (goods and service tax) PD7 (payroll deduction accounts) 6.0 Tax Data at STC Statistics Canada • Statistique Canada

22. Significant process since 1997 Close to 600,000 small simple establishments (under threshold) - Macro adjustment 17,000 additional simple establishments Tax data used in editing and imputation Result Almost 65% of units replaced by tax data 6.1 Use of Tax data Statistics Canada • Statistique Canada

23. Validation (comparison) Verify suspicious data against the equivalent tax data record Imputation One of the methods used for non-response Estimation Below take-none Direct Data Replacement Some annual surveys 100% tax (Taxi & Limousines, Survey of Mapping) Update Business Register Allocation of survey data ( use tax revenues, salaries and expenses) 6.2 Other Uses of Tax Data Statistics Canada • Statistique Canada

24. Time-in sample is managed by sample control file (SCF) Stratified Random Sample Industry (NAICS 4) Province Size 1 Take-all stratum 2 Take-some strata (50% of units replaced by tax) Take-none strata (under Royce-Maranda thresholds) 7.0 Sampling Statistics Canada • Statistique Canada

25. 7.1 Sampling Process BR (2.3M businesses) Survey Universe File (2M businesses) Tax Est’d (1.3M) Sample Control File (700K businesses) UES Sample (70K businesses) 55K CEs Survey Interface File 38K CEs / Questionnaires Tax Replacements 17K CEs Statistics Canada • Statistique Canada

26. 7.2 Stratification in One Look Cell Take-all Take-some 2 Must take units Samplingrevenue Exclusion Thresholds: To reduce response burden on small enterprises Take-some 1 Take-none Statistics Canada • Statistique Canada

27. 7.3 RY2007 Methodology: Tax Replacement T1 T2 Main sample to be surveyed Main sample to be surveyed Not eligible for tax : questionnaire Characteristic survey (some Services surveys) or questionnaire (all other divisions) Tax replaced ROYCE-MARANDA THRESHOLDS T1 Take-None: Sample of e-filers T2 Take-None: Census of General Index of Financial Information (GIFI) Statistics Canada • Statistique Canada

28. 8.0 Collection Score Function Pre-Contact Mailout Edit / Verification (BLAISE) Receipt (75% target) “Clean” Records Delinquent Follow-Up Capture / Imaging Statistics Canada • Statistique Canada

29. Develop centralized systems Move away from stand-alone Single point of access for security Integrated Questionnaire Metadata System Edit and imputation Allocation and Estimation Data Warehouse 9.0 Centralized Processing Systems and Databases Statistics Canada • Statistique Canada

30. 9.1 Post-Collection Processing “Clean” Records Tax Data Central Data Store Pre-Grooming USTART Edit & Imputation Subject Matter Review & Correction Tool Allocation / Estimation Statistics Canada • Statistique Canada

31. Segments UES survey population into 4 tiers based on their importance to estimates and their eligibility for tax replacement Tier I: most important, small in number big in impact Tier II: important but slightly less complex Tier III: medium-sized businesses (bulk of sample) Tier IV: smallest units; excluded from collection; tax data used Allows us to optimize response management efforts to get greatest ROI 10.0 Holistic Response Management Strategy Statistics Canada • Statistique Canada

32. Reduced size of questionnaires From 12-14 pages to 4-5 pages Use of the Chart of Accounts Related to the use of tax data Ombudsman function Enterprise Portfolio Managers Escalation Result 40% reduction of # of hours between 2000 to 2004 10.1 Respondent Burden Reduction Statistics Canada • Statistique Canada

33. 11.0 Management of the UES • ESD provides functional support and coordination • A series of committees is charged with process clarification & decision making Project Management Team Operations Management Committee Frame Operations Sampling Tax Data Operations Content / Collection Processing Operations Statistics Canada • Statistique Canada

34. STC recently launched a major initiative to: Increase relevance of statistical programs Generate ongoing efficiencies Decrease risks to statistical programs 12.0 Future Direction Statistics Canada • Statistique Canada

35. Extend UES principles to all business surveys Adopt common IT systems, tools and hardware Standardize subject matter analytical tools Simplify data movement through collective use of data stores, warehouses and common data transmission tools 12.1 Collection Business Architecture Statistics Canada • Statistique Canada

36. Improved quality assurance Reduced risks Sustainable production Increased staff mobility Program renewal 12.2 Expected Benefits Statistics Canada • Statistique Canada

37. Timeliness Efficiency Coherent Data Centralized Processing Systems and Databases Use of Tax Data/Respondent Burden Reduction 13.0 Achievements Statistics Canada • Statistique Canada

38. Peter Lys Director General, Industry Statistics Branch Statistics Canada Jean Talon Building, 13th Floor Tunney's Pasture Ottawa, Ontario, Canada KIA 0T6 Telephone: (613) 951-4071 Fax: (613) 951-0411 E-mail: peter.lys@statcan.gc.ca Contact Information Statistics Canada • Statistique Canada