Canada's recent experience in constructing regional economic accounts

Abstract

The first part of this paper describes how the systems and programs that feed Canada's sub-national economic accounts were built at Statistics Canada. A carefully chosen overview of challenges in developing these accounts offers insights into the issues and problems involved in building the statistical infrastructure that supports the present national and sub-national economic accounts. The second part of the paper deals with conceptual issues and challenges in developing a regional input-output framework that is capable integrating the sub-national data discussed earlier using national accounting principals and conventions. 1. Developing sub-national economic accounts for regional analysis 1.1. The evolution of sub-national accounts The sub-national input-output accounts (domestically known as provincial and territorial accounts) are the most comprehensive and detailed set of economic statistics in Canada and permit a wide variety of regional and inter-regional economic analysis. They are also benchmarks to other sub-national accounts and are integrated with other national accounts components. In other words, both the accounting concepts and the statistical outputs of Canada's national and sub-national programs are reconciled to be consistent with one another. These accounts evolved out of the national programs of income and expenditure accounts and input- output accounts which have a long history in Canada. Sub-national accounts in Canada started with the development of income and expenditure accounts by province beginning in 1981. These accounts consisted of components that make up the expenditure on GDP (such as personal expenditure on goods and services, fixed capital formation and government current expenditures) as well as components that make up income based GDP (such as wages, profits and depreciation). These accounts retained the concepts and definitions of the accounts at the national level and replicated their framework, but were constructed with more limited informational resources, since most surveys were not designed to properly reflect sub-national conditions. Furthermore, these accounts lacked the critically important regional trade flows, a short-coming that was rectified in the new sub-national accounts.