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The Evolution of Administrative Data Use for the Canadian Business Register BR

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Title: The Evolution of Administrative Data Use for the Canadian Business Register BR


1
The Evolution of Administrative Data Use for the
Canadian Business Register (BR)
IAOS Conference
Gaétan St-Louis
October 2008
2
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)
  • Todays BR
  • Looking to the future
  • Conclusion

3
Introduction
  • In 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.

4
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

5
A look at the past
  • Early 1970s
  • 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

6
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

7
The creation of the first central BR (continued)
8
Limitations of administrative data
  • The 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
    PDs in order to eliminate potential bias
  • Required development of a ratio model to derive
    the Gross Business Income (GBI) and the number of
    employees

9
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

10
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

11
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

12
Introduction of the BN (continued)
13
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.

14
Todays BR
  • In 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

15
Todays 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

16
Todays 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

17
Todays BR (continued)
18
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

19
Conclusion
  • Standardising 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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