Country experience: Canada
11.34. For the majority of statistics on services transactions, apart from travel and transport services, Canada uses a specific survey on trade in services and several industry-oriented surveys. Those enterprise/establishment surveys are supplemented by administrative data that record non-arm’s-length transactions with non-residents. Each source has its own coverage and its own collection of services statistics that are not necessarily equivalent to those of EBOPS. However, as resources are limited and the reduction of response burden is an important objective for Canadian compilers, it is necessary to use several sources to produce the best possible estimates.
11.35. The industry-oriented surveys of Canada collect different information on revenues and expenses by enterprises/establishments for specific industries. Those surveys offer broad coverage of the services industries, but the level of detail of the collected information is limited. Such surveys are, therefore, complemented by the international transactions on commercial services survey (BP21S) that targets 3,500 enterprises and collects information for 32 categories of services. Transactions are reported by country of trade as well as whether there is a relationship with the trade partners. The accompanying explanatory notes should, in principle, improve the quality of the responses.
11.36. Compared with enterprise/establishment surveys, administrative data provide, in principle, better coverage, as all Canadian legal entities are required to fill out the tax form if their total transactions (not only in services) with their foreign related entities are above Can$1 million. For example, for the year 2010, more than 12,000 entities filled the tax form, and half of them reported service transactions. The tax form supplies transactions by name and country of the non-resident entities.
11.37. However, the tax form is limited to transactions with foreign-related parties. That limitation virtually eliminates Statistics Canada’s capacity to use the administrative information as a data replacement source. In other words, the administrative data could not completely replace survey data. Furthermore, several service categories are aggregated on the form to simplify the work of the respondents. The tax form contains few definitions, which may lead to errors or misinterpretation by the respondents.
11.38. The annual administrative data files are updated twice a year. As they are an external source, less quality control may be applied on the information they contain. For example, if no transaction is reported for a certain entity, the reason could be the absence of a transaction, but it could also be that the transaction has not yet been processed. Monitoring transactions in services is not the main purpose of the tax form. Thus, verifications by tax authorities are usually done at a more aggregated level, possibly resulting in transactions for the same unit being reported under one activity in one year and under another activity the following year, without further verification.
11.39. More information on the industry-oriented surveys of Canada and the more specific international transaction in commercial services survey is provided online.
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