Canadian Tourism Satellite Account Demystified Charles Morissette R & D Projects and Analysis Section Income and Expenditure Division Presentation for TTRA Conference October, 2010
Outline The economic importance of tourism in Canada The Canadian System of National Accounts 2 Simple idea, complex in its implementation Accounting system. Key account to develop the CTSA Inputoutput account Measuring tourism in the Canadian economy Tourism Satellite Account the integration tool The spinoffs Timely analysis tools Statistical Challenges ahead Provinces and territories Expanding the dimension of the CTSA Other
The economic importance of tourism in Canada Statistics Canada provides economic statistics that summarizes the state of tourism in in Canada in the second quarter of 2010 GDP : 6.4 billions, SAQR (2002 dollars). UP 0.9% compare to Q1 GDP: 1.9% of the overall Canadian economy SPENDING: tourist spent 16.3 billions, SAQR (2002 dollars). UP 1.5% compare to Q1. NON-RESIDENTS: 1 in 5 dollars of tourism spending in Canada is attributable to Non-residents visitors. There spending were DOWN 1.4% compare to Q1. RESIDENTS: 4 in 5 dollars of tourism spending in Canada is attributable to Canadian visiting Canada. There spending were UP 2.2% compare to Q1. JOBS: In Q2, 613,200 depended on tourism spending. DOWN 0.5% compare to Q1. 3
The economic importance of tourism in Canada How was it possible to obtain those numbers? These numbers are not part of the regular statistical system that provide economic information on industries like agriculture or manufacturing. Tourism is a special industry : it is defined by the demand Tourism combine parts of many other industries like transport, accommodation, food and beverages We need STATISTICS MAGIC to do this, this magic is: The Canadian Tourism Satellite Account 4
Measuring the Canadian economy The Canadian System of National Accounts Simple idea Complex in its implementation Accounting system Key account to develop the CTSA Input-output account 5
Measuring the Canadian Economy Statistics Canada provide aggregate measure of the Canadian economy using a set of statistical tools called the Canadian System of National Account (CSNA) The idea is simple, the implementation is complex National Accountant look at each economic transaction from many angles Production / consumption Saving / Investment Income / outlay Purchase / sale Goods and services / financial market 6
Measuring the Canadian Economy Aggregate economic statistics are found in economic accounts which regroups similar transactions and presents two perspectives on them. Main components of the CSNA are: Income and Expenditure accounts Financial Flows Accounts National Balance Sheets Accounts GDP by industry Balance of International Payments Input-Output Accounts Productivity Measures 7
Measuring the Canadian Economy One of those account is crucial in the development of tourism Statistics: the Input-Output Account Purpose: Measure 3 things What good and services are produced How the good and services are produced Who is using those good and services Very Detailed 730 commodities, 300 industries, 170 categories of final demand Show both intermediate and final use of commodities by industries and final demand sectors Annual 2½ year lag Nominal and real (volume) estimates Provincial estimates annually 8
From survey results to Input-Output Account: Example with an hypothetical economy Table 3.2. Information on a Hypothetical Three-firm Economy Cost of production $ Value of production $ Enterprise 1 (Wheat Farm) Imports of seed and fertilizer 15 Sales to enterprise 2 100 Labour income 115 Exports 50 Profits 20 TOTAL 150 TOTAL 150 Enterprise 2 (Milling) Purchase of wheat to enterprise 1 100 Sales to enterprise 3 130 Labour income 45 Sales to consumers 35 Profits 20 TOTAL 165 TOTAL 165 Enterprise 3 (Baker) Purchase of flour to enterprise 2 130 Sales to consumers 200 Labour income 60 Profits 10 TOTAL 200 TOTAL 200 9
This simplified economy in the Input-Output tables Simplified representation of the Input-Output Tables Example of Hypothetical Economy Output Matrix Industries Farming Milling Baking TOTAL Goods and Services Goods and Services Wheat 150 0 0 150 Flour 0 165 0 165 Bread 0 0 200 200 Seed and fertilizer 0 0 0 0 Profits 0 0 0 0 Wages 0 0 0 0 TOTAL 150 165 200 515 Use Matrix (Input) and Final Demand Matrix Industries TOTAL Final Demand Categories Farming Milling Baking intermediate inputs Personal Exports Imports TOTAL Uses and final demand Wheat 0 100 0 100 0 50 0 50 150 Flour 0 0 130 130 35 0 0 35 165 Bread 0 0 0 0 200 0 0 200 200 Seed and fertilizer 15 0 0 15 0 0-15 -15 0 Profits 20 20 10 50 0 0 0 0 50 Wages 115 45 60 220 0 0 0 0 220 TOTAL 150 165 200 515 235 50-15 270 10
Measuring tourism in the Canadian economy Measuring tourism in the Canadian economy Tourism Satellite Account the integration tool The spinoffs Timely analysis tools 11
What is a Satellite Account? Extension of the System of National Accounts (SNA) hence the term satellite Subject-matter specific Satellite Account on Non profit Institutions and Volunteering Pension Satellite Account Research and Development Satellite Account Tourism Satellite Account (TSA) highlights the economic transactions that are recorded in the SNA related to tourism 12
Why a Tourism Satellite Account? Visibility and identity for the industry Credible and coherent estimates of tourism Comparable with total economy, other industries, across regions and countries Consistent measures over time Increased analytical and research capacity Biennial, national TSA for Canada is funded through joint partnership between Canadian Tourism Commission (CTC) and Statistics Canada 13
Aim of the TSA The goal of the TSA is to measure the economic activity of tourism respecting both: System of National Accounts (SNA) 1993 internationally accepted macro-economic accounting framework TSA: Recommended Methodological Framework establishes common guidelines to use for measuring tourism activity in an economy used by over 70 countries 14
Basic concepts According to the UN-WTO, tourism is: the activities of persons travelling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business and other purposes A commodity (passenger air transportation, hotel accommodation, restaurant meals, etc.) is a tourism commodity if a significant part of its demand in Canada comes directly from visitors And an industry (air transportation, accommodation, food and beverage services) is a tourism industry if tourism commodities make up a significant part of its output 15
Key measures Tourism supply Tourism demand Tourism GDP Tourism employment Note: TSA measures only direct effects on GDP and jobs 16
Data Sources Supply surveys Transportation surveys Accommodation survey Food and beverage Survey Recreation surveys Travel Arrangement Services survey Other supply surveys (including goods) System of National Economic Accounts Input-Output Tables Balance of Payments Canadian Tourism Satellite Account Demand surveys Canadian Travel Survey International Travel Survey Survey of Household Spending 17
Measures of tourism demand and supply Tourism supply and demand, CTSA 2004 $ millions 50000 45000 40000 35000 30000 25000 20000 15000 10000 5000 0 Tourism domestic demand Tourism exports Supply of tourism commodities 18
Tourism demand to supply (commodity) ratios vary significantly, tend to be stable over time Tourism demand to supply (commodity) ratios, CTSA 2004 Passenger air Passenger rail Passenger water Interurban, charter and tour bus Taxis Vehicle rental Vehicle repairs and parts Vehicle fuel Accommodation Food and Beverage Services Recreation and entertainment Travel agency services Convention fees Pre-trip expenses Other commodities 0 0.2 0.4 0.6 0.8 1 Demand to supply ratio 19
GDP directly attributable to tourism: $23.9 billion in 2004, 2.0% of economy-wide GDP $ millions 7000 6000 5000 4000 3000 2000 1000 0 Tourism Gross Domestic Product, CTSA 2004 100 90 80 70 60 50 40 30 20 10 0 Percent Tourism GDP (left axis) Tourism share of total industry GDP (right axis) 20
Jobs directly attributable to tourism: 611 thousand in 2004, 3.8% of all jobs thousands 180 160 140 120 100 80 60 40 20 0 Jobs directly attributable to tourism, CTSA 2004 21
TSA related products Tourism Human Resource Module annual (1997-2009) Provincial and Territorial Tourism Satellite Account (1998) Canadian Tourism Satellite Account (biennial, last year 2004) Pilot project on Environment indicators related to tourism Activities National Tourism Government Revenues Indicators Attributable to Tourism (quarterly, 2010q2) (annual, 2000-2009) 22
Provincial/territorial TSA Provides key tourism measures for P/T Tourism supply, demand, GDP and employment Helps increase our understanding of tourism across Canada Funded formerly through partnership between CTC and Statistics Canada seeking partnership with P/T for next update (2006 reference year?) 23
Economic contribution of tourism varies across provinces and territories Tourism's contribution to GDP, by province/territory, 1998 5.0 4.5 4.4 4.0 3.5 Canada 2.3% 3.4 Percent 3.0 2.5 2.0 2.3 3.0 2.6 1.9 2.1 2.1 2.3 1.8 2.3 2.1 1.5 1.0 0.5 - Newfoundland Prince Edward Island Nova Scotia New Brunswick Quebec Ontario Manitoba Saskatchewan Alberta British Columbia Yukon Northwest Territories & Nunavut 24
Varying degrees of dependence on domestic, interprovincial and international tourism across provinces and territories Distribution of tourism spending by source of demand, 1998 Newfoundland & Labrador Prince Edward Island Nova Scotia New Brunsw ick Quebec Ontario Manitoba Saskatchew an Alberta British Colum bia Yukon Northwest Territories & Nunavut Canada 0 10 20 30 40 50 60 70 80 90 100 Percent Domestic demand Inter-provincial demand International demand 25
National Tourism Indicators Quarterly reports on tourism at national level Tourism supply, demand (domestic and international), GDP and employment Seasonally adjusted and not adjusted Current prices and constant (2002) prices Timely source of tourism information released about 90 days after the reference period Shows the economic impact of events on tourism e.g. 9/11 and SARS Funded through partnership between CTC and Statistics Canada 26
Real tourism spending in Canada averaged 1.2% per quarter in post SARS period; export share of tourism spending has dropped off sharply since late nineties Tourism demand in Canada 20000 current prices 18000 constant (2002) prices 16000 40 35 Export share of tourism demand 14000 $ millions 12000 10000 8000 Percent 30 25 6000 4000 20 2000 0 15 I 1986 I 1988 I 1990 I 1992 I 1994 I 1996 I 1998 I 2000 I 2002 I 2004 I 2006 I 2008 I 2010 I 1986 I 1988 I 1990 I 1992 I 1994 I 1996 I 1998 I 2000 I 2002 I 2004 I 2006 I 2008 I 2010 27
Since SARS episode, tourism has contributed to less than to 2% of overall GDP 2.6 Tourism's share of GDP 2.4 2.2 2.0 1.8 1.6 1.4 1.2 1.0 I 1986 I 1988 I 1990 I 1992 Percent I 1994 I 1996 I 1998 I 2000 I 2002 I 2004 I 2006 I 2008 I 2010 28
Module on Government Revenue Attributable to Tourism Information on how much revenue tourism generates for government Annual estimates, 2000 to 2009 Details by source of revenue and by level of government Split out by industry and commodity Showing amounts due to domestic tourism and exports Funded through partnership agreement between CTC and Statistics Canada 29
Government revenue from tourism was nearly $20 billion in 2007, 3.7% of government revenue; export share declining since 2000 10 9 Government revenue attributable to tourism 40 Export shares of tourism spending and government revenue due to tourism 8 35 $ billions 7 6 5 4 3 2 1 Percent 30 25 20 15 10 Tourism revenue of government Tourism spending 0 2000 2001 2002 2003 2004 2005 2006 2007 5 Federal Provincial/territorial Municipal 0 2000 2001 2002 2003 2004 2005 2006 2007 30
Human Resource Module of the TSA Provides detailed information on tourism employment Key measures number of jobs, hours worked, earnings from employment Key categories type of job, FT/PT status, industry, occupation, age group, gender, immigrant status Strategic tool for training and planning for tourism Used by Conference Board of Canada (CBC)/ Canadian Tourism Human Resources Council (CTHRC) for long term labour supply/demand forecasts for occupations in tourism industries Used by tourism businesses in wage determination Funded through partnership agreement between CTHRC, CTC and Statistics Canada 31
1.6 million jobs in tourism industries in 2009, up 16% from 1997; 2.4 billion hours worked, 8.9% of hours worked in economy overall Number of jobs in tourism industries, 1997-2009 Number of hours worked in tourism industries, 1997-2009 1650 2550 1600 2500 1550 2450 2400 Thousands 1500 1450 1400 Millions 2350 2300 2250 1350 2200 2150 1300 2100 1250 2050 1997 1999 2001 2003 2005 2007 2009 1997 1999 2001 2003 2005 2007 2009 32
Number of jobs due directly to tourism demand about 1/3 of jobs in tourism industries 1,800 1,600 1,400 1,200 Jobs in tourism industries versus jobs due directly to tourism thousands 1,000 800 600 400 200 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Jobs in tourism industries Jobs due to tourism in tourism industries Jobs due directly to tourism 33
Pilot study on tourism and the environment the next TSA extension Linkage of TSA with Statistics Canada environment satellite accounts Exploratory study two pilot industries, air transportation and food and beverage services Aim of study: feasibility, plausibility, possibilities, limitations Longer term goal: filling a strategic and policy information gap Pilot funded by Statistics Canada Seeking funding partners to further the work Extend to all tourism industries Build annual time series estimates Include additional effects (air quality, water use, land use) 34
Air transportation emitted 10,595 KT of GHGs in 2002 as a direct result of tourism activity; nearly 3,000 KT were directly attributable to other operations of airlines 18000 GDP, selected industries, 2002 16000 GHG emissions, selected industries, 2002 $ millions 16000 14000 12000 10000 8000 6000 4000 GDP (non-tourism) GDP (tourism) Kt of CO2 equivalents 14000 12000 10000 8000 6000 4000 78.7% GHG emissions (non-tourism) GHG emissions (tourism) 2000 78.7% 17.3% 2000 0 Air transportation Food and beverage services 0 Air transportation 17.3% Food and beverage services 35
Challenges of satellite accounts Technical - Education/communications Transparency - Documentation/guides Timeliness - Indicators Data revisions - Improvements Another set of estimates! - Promotion Cannot answer all questions - Extensions/modules 36
Conclusion TSA provides a means to examine tourism in the broader context of national macro-economic accounts The scope and structure of the TSA have depended to a large extent on user needs and data availability The TSA, like the core SNA, can be expanded to address various needs (timeliness, frequency, regional, human resources, etc) 37
Thank you For more information visit: http://www.statcan.gc.ca/nea-cen/index-eng.htm And click on Tourism 38