Status
The variant of the North American Product Classification System (NAPCS) Canada 2012 for capital expenditures on non-residential construction was approved as a departmental standard on June 16, 2014. The variant is based on NAPCS Canada 2012 Version 1.1.
Transition from asset types to NAPCS Canada 2012
As with any capital expenditure, assets are grouped into distinct classes in order to make it possible to aggregate expenditure data. Since 1965, the classification system used for capital expenditures on non-residential construction has been a program-specific classification. Changes in the economy require that classification systems be updated periodically. The capital expenditures program is adopting NAPCS, developed by Canada, the United States and Mexico. Moreover, NAPCS has been adopted by most Statistics Canada programs that have a product dimension.
There are several benefits to converting to NAPCS:
- Most Statistics Canada programs having a product dimension will adopt NAPCS. As a result, Statistics Canada data will be coherent and consistent.
- Some products produced in Canada today did not exist in the 1960's, when the classification system used for capital expenditures was created. Converting to a new classification system will allow products to be classified more accurately.
- Statistical programs in the United States and Mexico may also release data on the basis of NAPCS. If so, this will allow easier international comparisons of product data.
NAPCS variant for capital expenditures on non-residential construction
Information on capital spending provides a useful indication of market conditions both in the economy at large and in particular industries. Since such expenditures account for a large and relatively variable proportion of gross domestic expenditures, the size and content of the investment program provides significant information about demands that have been placed upon the productive capabilities of the economy during a specific period. In addition, information on the relative size of the capital expenditures program planned, both in total and for individual industries, gives an indication of the views management hold on the future market demands in relation to present productive capacity. The information is used by the Canadian System of National Accounts for the measurement of the Gross Domestic Product and the Balance of Payments, as well as by federal and provincial governments and agencies, trade associations, universities and international organizations for policy development and as a measure of regional activity.
The NAPCS variant for capital expenditures on non-residential construction includes all categories of NAPCS 622 Non-residential buildings and 623 Infrastructures (except buildings), most categories of 671 Mining and oil and gas support services, and the remediation services categories of 782 Water, sewer and waste management services.
This NAPCS variant adds two levels (section and division) to the standard classification structure; the division level is largely defined in terms of standard classes (five-digit). The variant also aggregates NAPCS standard categories of the six-digit subclass and seven-digit detail levels, but to a much lesser extent. It does not use any categories of the standard three-digit group level. In order to accommodate a system of NAPCS variants, the coding is alphanumeric. The variant for capital expenditures on non-residential construction has its own codes at the section and division levels; for example, one alpha and two digits are used for the twelve section codes (i.e., X11 to X91).
Hierarchical structure
The structure of the NAPCS 2012 variant for capital expenditures on non-residential construction is hierarchical. It is composed of five levels.
level 1: section (three-character alphanumeric codes)
level 2: division (four- or five-character alphanumeric codes)
level 3: class (five-digit standard codes, and six-character alphanumeric codes)
level 4: subclass (six-digit standard codes, and seven-character alphanumeric codes)
level 5: detail (seven-digit standard codes)