Invitation to participate in the revision of the North American Product Classification System (NAPCS) Canada

Introduction

Statistics Canada invites data producers and data users, representatives of business associations, government bodies at the federal, provincial and local levels, academics and researchers and all other interested parties to submit proposals for the revision to the North American Product Classification System (NAPCS) Canada.

Following the decision of Statistics Canada's Economic Standards Steering Committee (ESSC) on April 28, 2023 to institute a permanent consultation process for NAPCS Canada, proposals for changes to NAPCS Canada may be submitted and reviewed on an ongoing basis. Only a cut-off date for considering proposed changes to be included in a new version of NAPCS Canada will be instituted moving forward. For example, for NAPCS Canada 2027, the deadline for changes to be included has been set to the end of June 2025. For revisions beyond 2027, such a cut-off date will be maintained at about one and a half years prior to the release date of the new classification version based on the 5-year revision cycle.

As was done with NAPCS Canada 2017 (2 updates), in exceptional circumstances, when a consensus is reached among the data producers and users at Statistics Canada, the classification might be revised before the regular revision cycle of 5-years, as the way of 'evergreening' of the standard.

In the context of statistical classifications, evergreening refers to updating the classification and the related reference (index) file on a continuous basis with the objective of maintaining timeliness and relevance. Though, evergreening does not necessary result in the release of a new version of the classification every year. A decision to release a new version (before the end of the regular 5 years revision cycle) needs to be discussed and assessed by key classification stewards considering potential impacts on data and statistical programs.

Objectives

We are seeking proposals for changes for two main reasons:

• collect input from data producers and users as an integral part of the NAPCS Canada revision process, and
• ensure users' needs continue to be met, therefore the classification remains relevant.

Background

The first version of NAPCS Canada, known as provisional version 0.1, was published in 2007. The development of the classification started a few years earlier as a joint project of the national statistical agencies of Canada, Mexico and the United States (U.S.). The NAPCS project followed the adoption by the three countries of a common industry classification, the North American Industry Classification System (NAICS) in 1997. The purpose of the NAICS project was to develop a standard that allowed comparisons of industry data among the three participating countries. The development of NAPCS was meant to serve the same purpose for product statistics.

There are currently two types of NAPCS classification: NAPCS Canada and Trilateral NAPCS. Each NAPCS cooperating country has the choice to maintain its own version of NAPCS or a national product classification. Trilateral NAPCS is hence considered a reference classification. At the moment, only Canada has published a national version using the NAPCS acronym. Mexico is preparing for the release of their new national product classification. NAPCS Canada differs from Trilateral NAPCS in the aggregation structure. NAPCS Canada uses a more traditional aggregation structure, a supply-based attributes of products, more or less based on the industry of origin of products. On the other hand, the Trilateral NAPCS structure emphasizes demand-based attributes of products, such as the substitutability of products, the complementary nature of products or the similarity in markets being served by the products. The most detailed categories of NAPCS Canada have been defined so as to permit mapping into the most detailed trilateral categories. This means that the Canadian detailed categories can be re-organized using the trilateral aggregation structure. In effect, the trilateral aggregation structure becomes a regrouping variant of the Canadian aggregation structure, with few exceptions. The availability of data at the most detailed level of NAPCS Canada will continue to influence the extent of the trilateral work.

Since the creation of this product classification, NAPCS Canada, has been revised on a 5-year cycle, in 2012, 2017 and 2022.

NAPCS Canada was also revised in 2018 with NAPCS Canada 2017 Version 2.0, as Canada has started evolving towards adopting a permanent "evergreen" practice with regards to NAPCS, which means the updating of NAPCS Canada on an as-needed basis, with version updates between the standard 5-year revision milestones. These "evergreen" updates strive to be constrained to specific situations or cases. For instance, in NAPCS Canada 2017 Version 2.0, the classification was revised to account for new products created after Canada adopted a new law legalizing cannabis for non-medical use, with impacts on the whole Canadian economy and society.

Nature and content of proposals

Respondents are invited to provide their comments, feedback and suggestions on how to improve the NAPCS Canada content. They must outline their rationale for proposed changes.

No restrictions have been placed on content. Respondents may propose virtual (not affecting the meaning of a classification item) and real changes (affecting the meaning of a classification item, whether or not accompanied by changes in naming and/or coding). Examples of real changes, those that affect the scope of the classification items or categories (with or without a change in the codes), are: the creation of new classification items, the combination or decomposition of classification items, as well as the elimination of classification items. A classification item (sometimes referred to as a "class") represents a category at a certain level within a statistical classification structure. It defines the content and the borders of the category, and generally contains a code, title, definition/description, as well as exclusions where necessary. For NAPCS Canada, classifications items are: Group (3-digit), Class (5-digit), Subclass (6-digit) and Detail (7-digit).

Key dates for NAPCS Canada 2027 revision process

Here are key dates for the NAPCS Canada 2027 revision process:

• Official public consultation period for changes proposed for inclusion in NAPCS Canada 2027: Ongoing to the end of June 2025. Beyond 2027, the cut-off date to incorporate approved changes from proposals into the new classification version will be about a year and a half before the release date of the next version of NAPCS Canada based on the 5-year revision cycle.
• Completion of trilateral negotiations: July 2025
• Public notice containing proposals in consideration for changes in NAPCS Canada 2027: November 2025
• Public notice containing the final approved proposal for changes in NAPCS Canada 2027: February 2026
• Public release of NAPCS Canada 2027 Version 1.0: February 2027

The next version of NAPCS Canada will be called NAPCS Canada 2027 Version 1.0.

Individuals and organizations wishing to submit proposals for changes in NAPCS Canada may do so at any time, in accordance with the permanent consultation process adopted by Statistics Canada with regards to NAPCS Canada.

Submitting Proposals

Proposals for NAPCS Canada revisions must contain the contact information of those submitting the change request:

1. Name
2. Organization (when an individual is proposing changes on behalf of an organization)
3. Mailing address
4. Email address
5. Phone number

Should additional information or clarification to the proposal be required, participants might be contacted.

Proposals must be submitted by email to statcan.napcs-consultation-scpan-consultation.statcan@statcan.gc.ca.

Consultation guidelines for submitting proposals for change in NAPCS Canada

Individuals or organizations are encouraged to follow the guidelines below when developing their proposals.

Proposals should:

• clearly identify the proposed addition or change to NAPCS Canada; this can include the creation of entirely new classes, or modifications to existing classes;
• outline the rationale and include supporting information for the proposed change;
• when possible, describe the empirical significance (i.e., revenue or sales, expenses, value-added, trade values, prices, volume of sales or production) of proposed changes, and especially real changes;
• be consistent with classification principles (e.g., mutual exclusivity, exhaustiveness and homogeneity within categories);
• be relevant, that is
  • describe the present analytical interest;
  • enhance the usefulness of data;
  • base the proposal on appropriate statistical research or subject matter expertise.

Please consider the questions below when preparing your input for the consultation on the revision of NAPCS Canada:

• Are there products for which you cannot find a satisfactory NAPCS Canada code?
• Are there products that you find difficult to place in NAPCS Canada?
• Are any products missing?
• Are there products or combinations of products that have significant economic value and analytical interest that you would like to see with a specific or separate NAPCS classification item (group, class, subclass or detail)?
• Are there classification items you find difficult to use because their descriptions are vague or unclear?
• Are there pairs of classification items you find difficult to distinguish from each other? Are there boundaries that could be clarified?
• Are there products that you are able to locate in NAPCS Canada, but you would like to have them located in a different classification item or group of products? And Why?
• Is the language or terminology used in NAPCS Canada in need of updating to be consistent with current usage?

Note that submissions do not need to cover every topic; you can submit your comments on your particular area(s) of concern only.

The following criteria will be used to review the proposals received:

• consistency with classification principles such as mutual exclusivity, exhaustiveness, and homogeneity of products within categories;
• have empirical significance as an industry output (goods or services), inputs to production, consumer expenditures, exports, imports, etc.;
• data be collectable and publishable;
• proposal can be linked to a funded program for data collection;
• be relevant, that is, it must be of analytical interest, result in data useful to users, and be based on appropriate statistical research and subject-matter expertise;
• be consistent with the Canadian System of National Accounts;
• products which can possibly be used to construct price indexes;
• products closely aligned with Trilateral NAPCS and other product classifications such as the Classification of Individual Consumption by Purpose (COICOP), the Central Product Classification (CPC), the Harmonized Commodity Description and Coding System (HS) and the Extended Balance of Payments Services (EBOPS);
• special attention will be given to specific products, including:
  • new or emerging goods and services
  • products related to new or advanced technologies
  • bundles in general (of services in particular).

NAPCS Canada Classification Structure

NAPCS Canada is a 7-digit classification, grouped in a 4-level structure: groups formed by 3-digits, classes formed by 5-digits, subclasses by 6-digits and 7-digit details.

Changes may be proposed for any level, however changes to the 3, 4 and 5-digit levels have the most impact on the existing statistical programs using NAPCS Canada (national accounts, price indexes for businesses, international trade statistics, retail trade statistics, agriculture statistics, manufacturing statistics, etc.), and also on the correspondence to be maintained with Trilateral NAPCS. Any changes made to NAPCS Canada could have an impact on Trilateral NAPCS, which is subject to trilateral negotiation and approval of the three countries (though, Mexico will start concentrating more on its national product classification). Changes to the 7-digit of NAPCS Canada are less likely to have a huge impact on the current statistical programs or Trilateral NAPCS. Statistics Canada makes the final decision about changes to all levels of NAPCS Canada but needs to consider the impact on the alignment to Trilateral NAPCS, in particular to avoid conceptual misalignments and maintain comparability.

The North American Product Classification System (NAPCS) Canada 2022 Version 1.0 is the latest version of the classification for the participants of this consultation to base their input on. In the context of a permanent consultation process, persons or organizations proposing a change should always make sure they refer to the latest available version of NAPCS Canada.

Costs associated with proposals

Statistics Canada will not reimburse respondents for expenses incurred in developing their proposal.

Treatment of proposals

Statistics Canada will review all proposals received. Statistics Canada reserves the right to use independent consultants or government employees, if deemed necessary, to assess proposals.

If deemed appropriate, a representative of Statistics Canada will contact respondents to ask additional questions or seek clarification on a particular aspect of their proposal.

Please note that proposals will not necessarily result in changes to NAPCS Canada.

Official languages

Proposals may be written in either of Canada's official languages – English or French.

Confidentiality

Statistics Canada is committed to respecting the privacy of consultation participants. All personal information created, held or collected by the Agency is protected by the Privacy Act. For more information on Statistics Canada's privacy policies, please consult the Privacy notice.

Thank You

We thank all participants for their continued interest and participation in the various NAPCS Canada engagement activities.

Enquiries

If you have any enquiries about this process, please send them to statcan.napcs-consultation-scpan-consultation.statcan@statcan.gc.ca.