François Brisebois, Martin Beaulieu, Richard Laroche Methodology Branch, Statistics Canada

1. Improvements to the Quality of Tax Data in the Context of their Use in Business Surveys at Statistics Canada François Brisebois, Martin Beaulieu, Richard Laroche Methodology Branch, Statistics Canada July 10, 2008

2. Background • Statistics Canada conducts a large number of economic surveys • Annual and subannual surveys • Tax data used to reduce response burden • Processing of the tax data to meet survey programs’ needs

3. Background • Goal of the talk • Present tax data sources and some of the methodological improvements incorporated in the processing • Mostly about accuracy

4. Description of Tax Data Sources • Three main sources (for business surveys) : • Annual tax data : • T2 : For corporations • T1 : For unincorporated businesses • Subannual tax data : • Goods and Services Tax : • Value added tax on consumption (5%) collected and remitted by enterprises

5. T2 - Corporations • Census available electronically • Detailed financial information (700 fields) • Only 8 fields are mandatory (mostly totals) • Generic and details fields • Currently used in annual surveys as direct replacements to sampling units • “Simple” structured enterprises only • For financial information only • Production for reference year Y happens in the fall of year Y+1, by which about 70% of T2 have been reported

6. T2 - Corporations • Improvements to imputation strategy • Using information available from other administrative sources • More sophisticated methods for allocation of generic fields to their details

7. T1 - Unincorporated businesses • Gross business income and net income available for all units of the population • Details (20-50 fields) only available for units reporting electronically (e-filers vs. p-filers) • Around 50% up until 2006 • Model based methods used to derive population estimates

8. T1 - Unincorporated businesses • Improvements • Validation of data using other administrative sources • Processing of partnerships to avoid over-coverage • Use data from “bar-code filers” • Increase coverage to about 80% • Start using for production of 2007 estimates

9. Goods and Services Tax • Mainly one variable : Total sales • For a given reference month, data become available to surveys 7 weeks later • Used by subannual surveys • “Simple” structured enterprises only • As replacements for sampled units • Through a ratio model to account for the difference between production month (M) and tax reference month (M-1)

10. Goods and Services Tax • Enterprises can remit annually, quarterly or monthly depending on their size • Need for calendarisation to breakdown amounts reported into “perfect months”

11. Goods and Services Tax • Improvements • Calendarisation (methods and systems) • Adaptation of strategies and systems to accept changes to tax rate • Active/inactive units: improve strategy using new fields available

12. Improvements for other quality dimensions • Study comparing tax data sources for coherence • Context of having annual and subannual surveys covering same population, and both using tax data • Evaluate consistency and better understand differences • Documentation of processes and studies • Inclusion of tax data fields in the central Business Register • Compute the variability associated with the use of tax data in survey estimates

13. Conclusion • 10+ years with positive results • Experience and feedback from survey programs feed improvements to the processing of tax data • There are still many other sources to exploit

14. Thank you François Brisebois francois.brisebois@statcan.ca +1 613 951-6937 For more information, or to obtain a French copy of this presentation, please contact: Pour de plus amples informations ou pour obtenir une copie en français du document, veuillez contacter :