CIERA™ 2022

1. Total GDP – this figure is the sum of direct, indirect, and induced contributions to the economy, it represents labour and profit contributions by the industry primarily but excludes expenditures on supplies and services. Indirect and induced show economic contributions within the province only. GDP figures are net of any government subsidies received by the industry.
2. Direct Output – this figure is the direct impact (no indirect or induced are added) and represents labour and profit contributions GDP plus expenditures on supplies and services.
3. Total Jobs – this figure is the sum of direct, indirect, and induced numbers and it represents traditional FTE and PT equivalent jobs. It represents work, but not workers, and currently has limited ability to measure gig work. It must be noted that the creative industries include many people with gig work that is not easily assessed using this traditional measurement approach model. Statistics Canada recognizes the importance of gig work and acknowledges that it is most prevalent in the arts, culture, recreation and sport industries. Furthermore B.C. has the highest share of gig workers in the country – in 2016, 8.7% of male workers and 10.7% of women workers in B.C. are engaged in the gig economy.

For comparability with other industries and reports, it is important to identify whether Total or Direct impacts are referenced. By offering these tables we seek to facilitate comparability in any circumstance.

Source: Statistics Canada Data

Creative BC’s Creative Industries Economic Results Assessment Tool

Updated for CIERA 2022 Release in November 2023

In 2019, Creative BC engaged Notio Media and Deetken Insight in a collaboration to design a bespoke mechanism of measurement for Creative BC to use annually, leveraging government datasets to track the economic impacts of each of the industries we serve and the creative industries in B.C. overall. Results from CIERA™ have been reported in each annual Impact Report since 2019/2020. The methodology is described here, including enhancements made for the 2022/23 report.

The methodology was designed to meet the following criteria: repeatability – the estimates can be updated and regularly and no less than annually; reliability – the data used to generate the estimates are from trusted sources and are well-documented; comparability – the estimates can be compared to those generated for other purposes (different sectors, regions, etc.); comprehensiveness – the data supports estimates that cover the full scope of economic impact (e.g. output, gross domestic product, employment); and alignment – the data supports estimates that align to the particular scope at hand, in this case, the B.C. creative sector.

The approach to build CIERA™ involved 1) establishing industry scope by mapping North American Industry Classification System (NAICS) codes against a standard three-part value chain for each of the industries (creation>production>distribution); 2) assembling publicly available government data required to generate economic impact results for each industry, and 3) designing a tool to calculate output, gross domestic product (GDP), and employment each year that is easily updated as government datasets are refreshed and released.

A core component of the methodology is the Provincial and Territorial Culture Indicators (PTCI) and the Culture Satellite Account (CSA) on which the indicators are based. The CSA is a product of both the Canadian Framework for Culture Statistics (CFCS) and the Canadian System of Macroeconomic Accounts (CSMA): the CFCS provides the guiding principles to define and identify cultural economic activity by culture domain and subdomain, while the CSMA provides the mechanism and data to derive the PTCI. CIERA™ uses the “industry perspective” version of the PTCI which represents all economic activity associated with those industries included within the CFCS.

The PTCI include results by culture domain and subdomain* for output, gross domestic product (GDP), and jobs. Output is the value of the goods or services that are produced within an establishment that become available for use outside that establishment (or, in some special cases, within the producing establishment) and is net of subsidies** received. GDP represents an industry’s “value-add”, which is equal to the difference between an industry’s output and the cost of the intermediate inputs that are used up in the production of their goods and services. GDP is valued in basic prices, which means it excludes the taxes an industry pays on expenditures of intermediate inputs used in the production of goods and services. Both GDP and output are expressed in nominal terms and therefore reflect prices in a given period (as opposed to real values which are adjusted for inflation). Jobs refers to an industry’s total number of jobs. If a job exists for only part of the year, it counts as a job for the portion of the year it existed (e.g., 3 months = 1?4 of a job). Conversely, a part-time job is valued the same as a full-time job (both are considered one job). 

Statistics Canada provides a mapping of CSA domains and subdomains to industries based on the 2007 version of the North American Industry Classification System (NAICS). This mapping is done at the most detailed 6-digit level. NAICS Canada 2017 Version 2.0 was reviewed by Notio and Deetken with industry stakeholders to select the relevant industry codes to include in CIERA™ that best represent the creative industries that Creative BC serves. Concordances between NAICS versions were used to backwards-map 2017 NAICS to 2007 NAICS codes.

Additional data from Statistics Canada’s Business Register (BR) is used to allocate the PTCI to in-scope 6-digit NAICS and thus to the Creative BC industries. The BR reports the number of businesses that have employees within a certain range (e.g. 1-4, 5-9, 10-19, etc.) by 6-digit NAICS industry. The total employment count for a given NAICS industry is estimated by first multiplying the midpoint of each employment range by its corresponding number of businesses and then summing across all employment ranges. (Note that the PTCI results reflect the jurisdiction where business activity occurs whereas BR data reflect the jurisdiction in which a business is registered. The BR data, therefore, is used in CIERA™ as a proxy for where business activity occurred.)

This BR data, combined with output data by industry from Statistics Canada’s Supply and Use Tables (SUTs), is used to apportion PTCI results to a given Creative BC industry. The SUTs include a wide range of for each Input-Output Industry Classification (IOIC) industry, including total output. The IOIC system is a special aggregation of NAICS. A mapping between these two systems allows for output to be estimated for 6-digit NAICS industries. Estimated employment counts for each NAICS industry are mapped to their corresponding IOIC industries and summed to derive output-per-employee benchmarks for relevant IOIC industries . These benchmarks are, in turn, used to estimate output per 6-digit NAICS industry, and these results are used to apportion PTCI results to a given Creative BC industry.

PTCI data reflects the direct economic impact of the culture industries, that is, the immediate economic activity of those businesses within the culture industries. Statistics Canada’s input-output multipliers are used to estimate corresponding indirect and induced impacts for a given IOIC industry. The indirect impact reflects the demand from culture industries for intermediate inputs from other industries. Indirect impact is cumulative, meaning it includes transactions going all the way back to the beginning of the supply chain. The induced impact reflects the attributable economic activity that arises as a result of industry workers, involved in either the direct or indirect activity, spending part of their wages and salaries on other goods and services.

CIERA™ makes adjustments to the indirect and induced multipliers that are published by Statistics Canada as follows:

• Indirect multipliers: These multipliers are adjusted downward to account for “own-indirect” activity, that is, supplier activity from the same industry. Not adjusting for own-indirect activity leads to a form of double-counting between direct, indirect and induced effects. As such, indirect multipliers are adjusted downward to omit own-indirect activity that is already captured as direct activity. CIERA™ uses linkage data from Statistics Canada’s Symmetric Input-Output Tables (SIOTs) to determine multiplier adjustment factors for each industry.

• Induced multipliers: These multipliers are similarly adjusted downward to account for own-indirect activity. While indirect multipliers are adjusted based on total supplier purchases from the same industry, induced multipliers are adjusted based on that portion of own-industry purchases that goes to wages and salaries. The SIOTs are used to determine the proportion of output that is made up of wages and salaries for each supplier industry. The induced multipliers are adjusted downward to account for that proportion of total wages and salaries (including both direct wages and salaries and wages and salaries paid by suppliers) resulting from own-indirect activity.

CIERA™ generates two sets of indirect and induced results: one for “within-B.C.” and the other for “all-provinces”. The adjustments to the within-B.C. multipliers account for both international and interprovincial imports, while the adjustments to the all-provinces multipliers account for international imports only. CIERA™ results published in the 2022/23 Impact Report are based on the within-B.C. multipliers. 2016 data from the SUT, SIOT, and BR are used in CIERA™ to apportion the PTCI and adjust the multipliers. In other words, output-per-employee benchmarks and multiplier adjustment factors are derived using 2016 data and then used for all years in CIERA™.

To allow total economic activity (that is, the sum of direct, indirect, and induced activity) across each creative industry to be summed without double-counting, CIERA™ also produces “de-linked” multipliers that account for inter-industry linkages. Inter-industry linkages occur when one creative industry purchases from another. For example, the Motion Picture industry’s purchases of goods and services from the Music and Sound Recording industry are counted as indirect impacts attributable to the Motion Picture industry, but also as direct impacts for the Music and Sound Recording industry. De-linked multipliers are constructed by omitting such inter-industry purchases and can therefore be used to generate estimates of the creative industries’ de-linked total aggregate impacts that exclude any double-counting that would otherwise occur when summing individual industry totals. 

To produce estimates for 2022, CIERA™ utilizes historical datasets for GDP by industry, in combination with historical trends observed from CIERA™ results. For the Motion Picture industry, CIERA™ also uses Creative BC Tax Credit Administration Data, which captures tax credit application data on total production spending in B.C. for all productions with Principal Photography / Key Animation (PPKA) start dates in 2022 (similar to Motion Picture output, but excludes production activity that does not qualify for B.C.’s motion picture tax credit programs). The estimation controls for reported changes to the PTCI’s estimation methodologies for CFCS subdomains that make up the Books, Magazines, and IDM industries. As a validation exercise, the relationship between relevant NAICS industries and their respective cultural sectors were checked for statistical significance. For quality assurance purposes, different statistical model approaches were back-tested and scored on their ability to forecast actual CIERA™ results from 2010 to 2021, with the best model being selected to generate the 2022 estimates.

VALIDATING 2021 ESTIMATES AGAINST ACTUALS

The most recent version of the PTCI, released on June 26, 2023, includes results for 2010 through 2021. An analysis was undertaken to compare previous CIERA™ estimates for 2021 to the results derived from published 2021 PTCI results (actuals). It was found that the previously estimated total direct GDP across all creative industries was 18% less in CIERA™ than the corresponding actual PTCI-based result. This difference is largely a result of two major drivers: 1) retroactive adjustments made to previously published PTCI figures for 2010 to 2020 across several in-scope subdomains; and 2) in the case of the Motion Picture industry, estimates being revised upward for all years in the 2022/23 model run to correct for overadjustment made in the original design for CIERA™ (see ENHANCEMENTS FOR 2022/23 section below).

ENHANCEMENTS FOR 2022/23

Separate from incorporating the latest available datasets from Statistics Canada, one enhancement was made to CIERA™ for 2022/23.

CIERA™ estimates for the Motion Picture industry have been revised upward for all years to correct for overadjustment made in the original design of CIERA™ to exclude activities associated with NAICS 2012 industry [532230 – Video tape and disc rental] (which was merged with other industries to form the aggregated NAICS 2017 industry [532280 – All other consumer goods rental]). The method to do so was overly conservative. Addressing this overadjustment brings CIERA estimates more in line with both industry estimates and other data published by Statistics Canada about the film and television production sector.

NAICS and IOIC code mapping Updated 2022 – click to download

LIMITATIONS AND KEY CONSIDERATIONS

The following are limitations and/or key considerations with respect to the methodology:

1. Information from Statistics Canada’s Business Register (BR) is used to derive estimates of employment for in-scope 6-digit NAICS codes. Per above, Business Register data is used to adjust PTCI data to produce results that align to the required industry scope by estimating employment based on business counts, which presumes that the midpoint of each employment range represents the average number of employees for all businesses within that group.
2. Total economic impacts (i.e., the sum of direct, indirect and induced impacts) should not be summed across Creative BC industries to attempt to represent aggregate impacts because of double-counting across industries. For example, some direct activity in Music and Sound Recording would also be captured as indirect (supplier) activity attributable to Motion Picture. Instead, “de-linked” aggregate totals calculated with CIERA™ should be referenced.
3. It is questionable to consider spending decisions as induced effects attributable to direct activity.
4. A variety of Statistics Canada datasets are used in the methodology, the release schedules of which vary. Every attempt has been made to match the datasets by reported year.
5. CIERA™ results should not be viewed as time series. Statistics Canada periodically refines its measurement methods and does not consistently revise published data about prior years. This year, Statistics Canada retroactively adjusted PTCI figures previously published for 2010 to 2020, which CIERA™ incorporates despite creating some drift from previous results.
6. A limitation in applying the multipliers pertains to how well the IOIC codes align to the in-scope NAICS codes and culture subdomains. The better the alignment, the more dependable are the results generated by the multipliers. This alignment varies across the Creative BC industries.
7. Jobs as a measure is not ideal for gig work, as it provides limited insight into the number of individuals working in an industry. “Jobs” reflects the average annual number of full- and part-time jobs in an industry.
8. Figures for the most recent year need to be estimated. The following datasets are used for produce these estimates:
   1. PTCI, provincial, annual (Table: 36-10-0453-01)
   2. GDP by industry, provincial, annual (Table:14-10-0202-01)
   3. For Motion Picture, Creative BC Tax Credit Administration Data, which captures tax credit application data on total production spending in B.C. for all productions with Principal Photography / Key Animation (PPKA) (similar to Motion Picture output, but excludes production activity that does not qualify for B.C.’s motion picture tax credit programs)
9. CIERA™ was updated in 2023 to deliver 2022 insights using the most recently available data, including: 2021 results from the PTCI, and 2019 IOIC multipliers. SUT and SIOT data from 2016 continue to be used as modelling benchmarks. CIERA™ uses 2016 BR for 2010 to 2016 data and 2017 BR for 2017+ data to match to corresponding NAICS versions. Since 2019 multipliers are the most recent available, they are used to estimate indirect and induced impacts for 2019, 2020 and 2021. 

*Statistics Canada definitions: The domains and subdomains are intended to be measurable, distinct and recognizable to data users. At their highest level, domains consist of an aggregation of activities, artistic disciplines, industries, products and occupations that are related and provide a useful level of analysis. In most cases, these higher-level domains may be comparable at the international level, while a subdomain may support analysis at a more discrete or detailed level. Core culture subdomains produce goods and services that are the result of creative artistic activity and whose main purpose is the transmission of an intellectual or cultural concept. Read more online: https://www150.statcan.gc.ca/n1/pub/87-542-x/2011002/s02-eng.htm

**Subsidies are netted out because they reduce the cost of certain inputs such as labour, while taxes on factors of production (e.g., property taxes) are added in because they are costs paid by the producer and are included in the final value of the product.

DISCLAIMER
The views, opinions, conclusions and/or recommendations expressed in these materials are those of the author(s). These materials do not necessarily reflect the official policy or position of the Government of British Columbia. The Government of British Columbia does not endorse, nor has it confirmed the validity of the information contained in, these materials.