the evolution of administrative data use for the canadian business register (br) iaos conference...

The Evolution of Administrative Data Use for the

Canadian Business Register (BR) IAOS Conference

Gaétan St-Louis

October 2008

October 14, 2008Statistics Canada • Statistique Canada2

Summary Introduction The role of the Business Register (BR) A look at the past Creation of the first Central BR Limitations of administrative data Introduction of the Business Number (BN) Today’s BR Looking to the future Conclusion


IntroductionIn this presentation, I will focus upon the evolving use of

administrative data in the development and maintenance of the Canadian Business Register and its many benefits to the statistical program.


Role of the Business Register (BR) Develop and maintain a register of all businesses in Canada

(~2.3 million businesses)

Provide business survey programs with:• Survey frames• Browse, extraction and updating capabilities

Measure respondent burden

Disseminate business demographic data


A look at the pastEarly 1970’s

• An attempt was made to create a central Business Register based upon administrative data in order to supply frames to all business surveys

The result• The BR relied primarily upon a single administrative source, the PD

account files

• Very few business surveys used the BR• Separate frame files for specific surveys or groups of surveys in

various divisions

• The treatment of administrative data was decentralised and limited


The creation of the first central BR In 1984, the business survey redesign project was launched for

completion by 1988• One of the major objectives was to increase the use of administrative

data

There was an initial attempt to integrate and link different administrative data files into a Central Frame Data Base (CFDB)

• Not possible due to Canadian tax practices and the fact that these files did not carry common identifiers

• This forced Statistics Canada to maintain two alternate views of the business universe: the PD account view and the income tax view


The creation of the first central BR (continued)

Central Frame Data Base (CFDB)

Integrated Portion (IP)Includes large businesses

T1 Unincorporated

Data

Payroll Deduction (PD) Data

T2 Incorporate

d Data

IP – Units fully linked and classified

NIP – Units not linked nor are all the units classified

Threshold

Out of scope for surveys

Income tax alternate framePayroll deduction alternate frame


Limitations of administrative dataThe PD frame

• A good source of births due to monthly remittances• All PD accounts were assigned an industrial classification code• Used by Sub-Annual surveys

However• Employers could open multiple PD accounts for a single legal entity

resulting in duplication on the frame

• Survey programs needed to manage duplication of PD’s in order to eliminate potential bias

• Required development of a ratio model to derive the Gross Business Income (GBI) and the number of employees


Limitations of administrative data (continued)The income tax frame

• Contained a one-to-one correspondence with the legal unit which eliminated the problem of duplication

• Contained employer and non-employer businesses which reduced the under-coverage for self-employed businesses

• Included an exact size measure for business income • Used by annual surveys

However• Income tax returns are filed long after many business events and

therefore a poor source for birthing units compared to PD accounts• Only a sample of the income tax frame was assigned an industrial

classification code• A two phase sample design was adopted to overcome the missing

industrial classification


Introduction of the Business Number (BN) In 1995, the Canada Revenue Agency (CRA) introduced the Business

Number (BN) system• A federal government initiative to simplify the way businesses dealt with

government• Based upon the concept of one business, one number

The BN is composed of 9 numeric digits and a radical of 6 digits• The 9-digit BN registration number identifies a unique business• The two letters identify the type of account • The last four digits identify the account number

The BN made the Goods and Services Tax (GST) usable to BRD• It supplied the Register with an earlier size indicator in terms of sales for

employer and non-employer businesses• It was also an excellent, early source of birthing units on the frame


Introduction of the BN (continued)The introduction of the BN increased our ability to link multiple taxation

administrative data files

In 1998, Statistics Canada proceeded with a massive conversion of the BR frame to the BN• It was now possible to link the PD account frame data with the BN data• Income tax data and the GST data complemented information on the

frame and increased coverage for the non-employers• The Program to Improve Provincial Economic Statistics (PIPES) brought

in additional surveys and forced the BR to cover smaller units in order to accurately measure smaller provincial economies


Introduction of the BN (continued)Central Frame Data Base (CFDB)

Integrated Portion (IP)Includes large businesses

BN DataPayroll Deduction (PD) Data

GST DataT2 Data

IP – Units fully linked and classified

NIP – Units fully linked and classified

Threshold

Out of scope for surveys

BN data below threshold or with no indication of economic activities or unclassified


Introduction of the BN (continued)The BN registrant files became:

• The source to identify new businesses • To create and update tombstone information

However, the BN registration system is not able to systematically identify businesses that have ceased operations• Statistics Canada needed to develop a method to identify inactive

businesses

In order to fully exploit the administrative data on the BR and meet the requirements of survey programs, it was necessary to rethink the conceptual framework of the BR.


Today’s BRIn 2005, it was recognized that with the limitations of the BR

environment• It was not possible to meet the clients’ changing needs

• The computer environment was outdated

• Work methods did not reflect the changes that Statistics Canada had undergone

• There were limitations on the level of integration of administrative data Automation of processes using administrative data was limited Size variables on the frame were still predominantly driven by a model GST sales & T2 business income were only assigned to BNs with no PD

accounts


Today’s BR (continued)The BR redesign was initiated in April 2005 and completed in

January 2008• It uses the BN as its basis in order to identify businesses on the

frame

• The BN file from CRA is used to create and update tombstone data and to identify potential new businesses

• All BNs are assigned an industrial classification code by Statistics Canada

• Other administrative sources such as T1, T2, GST and PD are used to complement the BN data


Today’s BR (continued)Administrative data are:

• Used to automatically maintain and update the tombstone data• Used to automatically generate size information of legal units (BNs) for

all businesses on the frame• Used as the first phase of the profiling of complex businesses

The new model of the BR makes it possible for administrative data to replace survey data for complex businesses


Today’s BR (continued)Business Register (BR)

Complex Businesses22,000 Alive and active Businesses

Simple Businesses

2,300,000 Alive and Active Businesses

Statistical Delineation

BNs without an economic activity and/or classification code are Out of scope for surveys

The BR integrates the:BN DataPayroll Deduction (PD) DataT1 Unincorporated DataT2 Incorporated DataGST Data

Inactive/Dead/unclassified BNs6,000,000 BNs


Looking to the future Further work with our partners remains to be completed in order to use

administrative data more efficiently to maintain a central Business Register:• Unincorporated business (T1) data link to BN

• Identification of non-active BNs

• Quality of industrial activity description at registration time


ConclusionStandardising practices among departments and programs lead to the

creation of the BN. This was a huge step forward in the use of administrative data and allows the Register to be more efficiently maintained and significantly improve its coherence.

The usage of administrative data has helped to reduce respondent burden through the replacement of survey data, improve the quality of estimates and harmonize the business survey program.

Administrative data are now playing an important role in the survey cycle and specifically in the maintenance of a central BR.

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