Status
The North American Product Classification System (NAPCS) Canada (Provisional Version 0.1) has been replaced by the North American Product Classification System (NAPCS) Canada 2012.
The North American Product Classification System (NAPCS) is a classification that organizes goods and services throughout the economy in a systematic fashion. The portion of NAPCS which is presented here represents the products of selected service-producing industries. These classes are considered provisional but are currently being used in the collection of product data in the annual service industry surveys and provide the basis of the commodity dimension of the revised Canadian System of National Accounts (CSNA).
The development of NAPCS has been a joint project of the national statistical agencies of Canada, Mexico and the United States. The purpose of the project has been to develop a unified standard for products which would allow comparisons of data among the three participating countries. It will also facilitate integration of data at Statistics Canada.
Scope
NAPCS will eventually become an economy-wide classification covering both goods and services. This provisional version of NAPCS includes the products that are characteristic outputs of a range of service-producing industries, specifically those in NAICS Sectors 48-49, 51, 52, 53, 54, 56, 61, 62, 71, 72 and 81.
Products can be described as services, tangible goods, or intangible goodsFootnote 1. Services include such things as legal representation, real estate rentals, and haircuts. They are transactions between buyer and seller that benefit the buyer by improving the buyer's state, but cannot be stored or transferred to third parties.
Goods, whether tangible or intangible, are entities over which ownership rights can be established, which can be traded, and which can be stored. Intangible goods include such things as scientific inventions, and "originals" such as the words in a book manuscript or the images stored on a film master. While they have no physical presence, ownership rights exist for them (established with patents and copyrights), they can be stored, and their ownership transferred. Intellectual property is an important category of intangible good. NAPCS includes products that represent the sale and licensing of the right to use intangible goods. It also includes some classes for the originals themselves.
Tangible goods are those with a physical presence. Most tangible goods are not included in this version of NAPCS. Those that are included, such as newspapers, music CD's, and movie DVD's, are the physical expression of intangible goods that can be copyrighted. For other tangible goods, the reader is referred to existing product classifications for tangible goods used in Statistics Canada statistical programs.
Development
NAPCS has been developed through a series of three-country working groups, which have constructed lists of classes from a set of North American Industry Classification System (NAICS) industries, as mentioned above.
For more information on implementation of NAPCS in the United States: North American Product Classification System. Information includes products used on questionnaires of the Economic Censuses of 2002 and 2007. For information on the product catalogue used in Mexico's Economic Census of 2004, see the Internet site of the Instituto Nacional de Estadística, Geografía e Informática (INEGI). These products include NAPCS-based products developed during the first phase of the three-country project.
Implementation
NAPCS will be the basis for the product dimension in the CSNA and in Statistics Canada surveys. Implementation of NAPCS has begun in various survey programs, leading up to implementation in the CSNA for reference year 2007. The reference year for implementation in price indexes is under discussion. The implementation of NAPCS is intended to improve coherence in the accounts, and to provide detail which will better reflect the importance of services in the Canadian economy.
As a product classification, NAPCS will typically be used to classify the detailed revenues and expenses of businesses, governments and households, except those involving taxes, transfers, or income. At present, the implementation of NAPCS classes for revenues (production) is in progress, while implementation for expenses (service inputs) is under development.
It should be noted that NAPCS will not be used for collecting data on international trade in goods and services. By international agreement, trade statistics for goods use classifications based on the Harmonized Commodity Description and Coding System (HS), while statistics for international trade in services use the Extended Balance of Payments Services Classification (EBOPS). Concordances between these classifications are now being developed.
Relationship to the Canadian System of National Accounts
The NAPCS Output Groups shown here have a level of detail that is similar, though not identical, to that of the commodities in the input-output accounts of the CSNA.
There are several reasons why the NAPCS Output codes are not exactly the same as the Input-Output Commodity Classification (IOCC). First, in certain areas the data for inputs does not support an Input-Output commodity at the required level of detail, so in these areas the IOCC code will be more aggregated than the NAPCS Output code. Second, in other areas, production data are not available on a NAPCS basis; in education and health, for example, the input-output accounts will continue to be based on an institutional sector approach until NAPCS-based data are available. Third, in still other areas, the CSNA is bound by international agreement to employ concepts other than those of NAPCS; for example, the financial services commodities will continue to be based on the Financial Intermediation Services Indirectly Measured (FISIM) approach. Fourth, there are other areas in which for practical and operational reasons the IOCC may not yet correspond to the NAPCS Output Groups. For example, IOCC classes for professional services will be aggregates of NAPCS Output codes for the foreseeable future.
Presentation
The NAPCS Canada product classes are presented in two ways. The first is a numeric list of NAPCS Output Groups, as described above. The Group to which products have been assigned is based on the industry which typically produces them. The second is a list of broad subject areas, that correspond to the product groupings developed through the three-country development process.
Coding System
The coding system is based on a six-character code, called an Output Group. The first three digits represent the NAICS industry which typically produces most of the product. The final three digits provide unique detailed codes ordered in a logical sequence.
The detailed product codes used in this presentation of NAPCS are provisional. A "Dewey decimal" type of format is used to indicate the hierarchy, in which level is separated by a period.
The coding system used to organize this presentation has been developed for Canadian purposes.
Future Steps
Statistics Canada is doing further work to turn NAPCS into an economy-wide classification. There are several activities underway. One is to complete the coverage of the classification. This entails adding products characteristic of the agriculture, mining, utilities, construction, manufacturing, retail, wholesale and public administration industries. The basis for tangible goods will be the Annual Survey of Manufactures (ASM) List of Goods. These will be supplemented by goods produced by other industries, such as mining, and by services produced by the industries listed above.
Further work will take place on some special subjects, such as intellectual property, assets, and cultural goods.
In addition, an aggregation structure based on demand will be developed.
These additional products and structures will be developed in cooperation with the United States and Mexico. Ultimately, the objective is a comprehensive North American product classification for use by the three countries.