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Overview

Infra-annual statistics on capital expenditures and profits in Canada OECD Short-Term Economic Statistics Working Party 25 – 27 June 2007 Paris, France Prepared by Jean Leduc and Michel Labonté Presented by Michel Girard Statistics Canada. Overview. Investment and Capital Stock Program

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Overview

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  1. Infra-annual statistics on capital expenditures and profits in CanadaOECD Short-Term Economic Statistics Working Party25 – 27 June 2007Paris, FrancePrepared by Jean Leduc and Michel LabontéPresented by Michel GirardStatistics Canada

  2. Overview • Investment and Capital Stock Program • Residential Building • Non-Residential Building Investment • Building and engineering • Machinery and Equipment Indicators • Quarterly Survey of Financial Statements • Capital Expenditures • Profits • Survey background • Strengths & weaknesses

  3. Building Permits SurveyDescription • Administrative data provided by municipalities • Value of construction intentions • Residential and non-residential building • Frame for: • Monthly Survey of Housing Starts and Completions • by Canada Mortgage and Housing Corporation • Results are widely used as a leading indicator • Used in the SNA for deriving capital expenditures

  4. New Housing Investment • Construction types • Single, double and row dwellings • Apartments • By census metropolitan area, monthly • Investment – modelled using: • permits, starts, construction patterns • completions

  5. Residential construction Quarterly • Comprises three elements: • New residential investment • single, semi-detached, row, apartments, mobiles, cottages and conversions • Renovations • Improvements and modifications to existing dwellings – based on permits • Acquisition fees • Sales taxes, land developers fees, fees for the review of files for mortgage insurance

  6. Non-Residential Building Investment • Data sources • Based on building permits • Private list of projects • Work-put-in-place patterns • From the US (BEA) • By type of structure • Industrial, commercial and institutional • These patterns differ according to the value (size) of construction project

  7. Non-Residential Engineering Investment • Proposal to produce quarterly indicators • Based on a list of projects provided by private sector • Work-put-in-place patterns approach • Respecting annual data • Private/Public Investment Survey - forecast

  8. Machinery & Equipment Indicators • Derived in the SNA only • Based on imports and exports data • Based on shipments • Annual Private and public investment forecast

  9. Quarterly Survey of Financial StatementsContent • To measure the financial position and performance of incorporated businesses in Canada • Financial and non-financial • Section on capital expenditures

  10. Quarterly Survey of Financial StatementsCapital expenditures • Low response rate for those questions • Data are not released • But used in the SNA: secondary indicators • New survey questionnaires (Q2 2007) • New Building • New machinery and equipment • Used building and machinery, land • Depletable assets • Capitalized leases • Capitalized tooling

  11. Quarterly Survey of Financial StatementsContent • Assets • Liabilities and shareholders’ equity • Section on capital expenditures • Income statements • Approximately 30 variables • Focus is on revenues and net income • Analytical ratios • Debt to equity ratio • Return on equity

  12. QSFS - Coverage • Covers virtually all industries • 1 million enterprises • Excludes GBE and non-profit corporations • Largest enterprises are sampled and directly surveyed every quarter • Represents 86% of assets / 70% of revenue • Smaller enterprises estimated by applying a statistical model • Based on estimates from the surveyed population and other parameters

  13. QSFS - Sample • Unit: enterprise • 17 questionnaires • 4 non-financial/13 financial • Enterprises 17000 - sample: 5400 • Benchmarked to the AFTS • 80 NAICS industry groups

  14. QSFS - Users • Key Clients: • SNA • Profits for quarterly GDP • Financial flows/ Wealth accounts • Bank of Canada • Credit unions and investment dealers • Secondary clients: • Private Sector: • Banks, analysts, investment advisors • Government: • Federal & provincial agencies and departments

  15. Strengths & Weaknesses • Response rates • Low for the current quarter • 38% counts, 65% assets, 50 % revenue • Better for the revised • 60% counts, 90% assets, 75% revenue • Solutions • Electronic data reporting • Enterprise portfolio managers • Internal response management team (proposed)

  16. Strengths & Weaknesses • Response burden • QSFS is the survey creating one of the highest response burden amongst STC surveys • Only the public enterprises legally need to prepare quarterly statements for their shareholders • Solutions: • Review of data content • Try to align with data availabilities • EDR offered • Reporting arrangements • Filing frequency and timeframe • Accepting partial response ahead of full response

  17. Strengths & Weaknesses • Specialized Skills • Requires in depth knowledge of accounting and finances and of changes affecting the business world • Current position classification and selection processes not geared for this specific knowledge • Solutions • HR plan with specialized positions • Accounting and Finances Community of practice created • External/internal competitions at entry and mid-management level using COP

  18. Strengths & Weaknesses • Unit of observations • The QSFS unit of observation is the enterprise • Maintaining current structure is a challenge especially in light of the current wave of mergers and acquisitions. • Solutions: • Portrait sent to respondents every quarter • Tailored reporting arrangements based on availability of data • Signals sent to central register as they are received

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