The Standard Classification of Goods (SCG) is the standard used by Statistics Canada to collect commodity data and to uniquely identify such data in data banks. It is an extension of the international Harmonized Commodity Description and Coding System, designed to meet Canadian requirements for extra detail.
The first published edition applied to the 1988 reference year, and the second edition applied to the 1992 year. The third edition of the SCG covers the 1996 reference year. For the years between the first two editions, the classification was updated by annual supplements consisting of replacement pages. After 1992, annual supplements were not published but available on a cost recovery basis. The standard for commodity statistics prior to 1988 was the Standard Commodity Classification which was published in 1959 and revised in 1972.
The Standard Classification of Goods provides a structure for the collection of commodity data. Survey managers select from the Standard the appropriate level of detail that is relevant for the nature of the universe surveyed and the purpose of the survey. Where the structure is not suitable, alternative structures may be developed, using classes from the standard as building blocks. The versions in this website identify the codes selected for collecting data in current surveys covering imports, exports and production as well as in the annual survey of products shipped and materials used by manufacturers.
The Standard Classification of Goods (SCG) is one of a number of standards used in Statistics Canada to facilitate the collection and publication of an integrated set of statistics. An example of another such standard is the North American Industry Classification System (NAICS), which is designed to classify the establishments that produce goods or services. The SCG provides a structured list of goods, the classes being mutually exclusive, while collectively exhausting the universe of goods to be classified. It consists of a hierarchy of classes, with a different classification criterion applied at each level of the classification. Each class is identified by a code number, with the structure of the code indicating the level of the hierarchy. Although each class identified must have economic significance, the application of the principles of classification does not necessarily result in a similar degree of economic significance among categories at any given level of the hierarchy. Maintaining the stability of the SCG facilitates the comparison of data about goods, among different series for a given reference year or over time for any given series. On the other hand, to reflect changes in the economy and new requirements for statistics, the finest level of detail in the classification structure will be revised periodically.
The SCG replaces the Standard Commodity Classification (SCC), which was the first commodity standard applied by Statistics Canada. The SCC was developed and published during the 1950s and a revised edition was released in 1972. The SCC was implemented gradually over the years. It was introduced in the 1960s for imports (the Import Commodity Classification, or MCC), for exports (the Export Commodity Classification, or XCC), and for the commodities transported by rail, road and water. In the 1970s it was extended to the Census of Manufactures (the Industrial Commodity Classification, or ICC), an expanded import classification (the Canadian International Trade Classification, or CITC), and the Input-Output Tables (the Principal Commodity Groups, or PCG). In the early 1980s it was introduced into the family expenditure surveys and the Consumer Price Index.
The Standard Commodity Classification was not itself used as a coding manual. Instead, applied manuals based upon the standard were developed. These manuals drew from the standard, by using some classes as they were in the SCC, and by combining or splitting other classes, but usually respecting the classification structure. Normally, the first three digits of the standard coding system appeared in the derived classifications.
The SCG is based upon the Harmonized Commodity Description and Coding System (Harmonized System, or HS), in that it incorporates the HS classification (descriptions and codes), legal notes, and the general rules of interpretation. Thereby, it can apply HS classification support such as the explanatory notes, the services of the HS Secretariat and other support associated with the HS. The SCG, however, extends the six-digit HS coding system, by an additional two digits. This extension was required to provide more statistical detail for goods that are manufactured in Canada, for the materials used in their manufacture, and for goods that are imported or exported. The extension also attempted, as far as possible, to maintain comparability with earlier data on goods.
The idea of an international standard commodity description and coding system grew out of a need to simplify and expedite trade documentation of all types, including customs documentation. A group of trading organizations responded to this need. Included in this group were the International Chamber of Shipping, the General Agreement on Tariffs and Trade, and the Economic Commission for Europe. They believed that trade documentation would be faster and more accurate if a standard root code could be built into all product identification codes and assigned at the point of production and if the same root code could be incorporated into all the administrative classifications used in trade (e.g., customs tariffs, freight rate schedules, statistical classifications). Such an international standard for commodity classification would:
The most widely-used international coding system at the time was the Customs Co-operation Council Nomenclature, which was maintained by the World Customs Organization (WCO) 1, an organization to which most countries belong. The WCO was established to standardize tariff nomenclatures and facilitate the clearance of goods at international borders. Accordingly, under their auspices, a committee was established to develop the Harmonized System. Work began in 1973 and the classification was completed in 1983. Canada was represented by officials from Revenue Canada (Customs and Excise) and Statistics Canada.
1 The official name for this organization is the "Customs Co-operation Council (CCC)". The name, "World Customs Organization (WCO)", was adopted as the informal working name in June 1994 in order to indicate more clearly its nature and world-wide status.
To implement the HS, each country signs a convention (the International Convention on the Harmonized Commodity Description and Coding System) binding itself to adopt the descriptions and codes of the HS and the rules governing its application for customs tariffs, import statistics and export statistics. The system was adopted in January 1988 by forty-five countries or customs unions, including Canada, the European Economic Community and Japan. It was adopted by the United States of America in January 1989.
To facilitate the compilation of market data, Statistics Canada also implemented the HS for production statistics, beginning with information for 1988. In fact, Statistics Canada has a policy stipulating that the HS become the definitional basis for all of the commodity statistics it produces. In many countries, trade classifications have been based upon the Standard International Trade Classification, and production classifications on national industrial classifications. These countries have experienced difficulty in converting commodity classifications to an HS base. Canada is accustomed to integrated commodity classification since, previously, both trade and production classifications were based upon the SCC.
The classification structure of the HS is sufficiently different from that of the SCC to complicate comparison, particularly for residual classes. The HS is designed primarily to facilitate the "identification" and coding of goods; therefore, it is principally organized by component material, a characteristic that is apparent from a physical examination of the goods. The SCC, on the other hand, was designed primarily to facilitate "analysis" of commodity statistics and is principally organized by stage of fabrication (i.e., crude materials, fabricated materials and end products, with the first two categories subdivided by component material, and the third, by use). The benefits of improved quality and comparability of data from adopting the HS, however, are deemed to more than compensate for the breaks in historical continuity and the regrouping of data required for analysis of commodity data.
The HS (and thus the SCG) was designed for the classification of goods on the basis of their physical characteristics, in the sense that one should be able to apply objective criteria to correctly classify a good or verify its classification, by examining it or asking a laboratory to test its physical or chemical properties. The corollary is that certificates of origin or intended use are not required to classify a good. The use of physical characteristics was thought to be the best way of getting reliably coded data.
The main objective in developing the SCG was to add a level of commodity detail to the HS structure. This was necessary because the detail in the HS reflects the commodities that were significant in international trade during the 1970s. Additional national requirements for commodity statistics, particularly for commodities that are significant mainly in domestic production, had to be added to the HS. In developing the SCG, it was important to identify commodities that are significant for analytical purposes but also are defined in such a way that they can be reported from records kept by respondents or coded from documentation that travels with the goods.
The SCG consists of a hierarchy of chapters (two-digit codes), headings (four-digit codes) and subheadings (six-digit codes and eight-digit codes), organized primarily by component material, beginning with crude products and proceeding through further stages of processing, then mixtures and products made from a variety of materials. Numerical codes are used. A count of these codes, by level, is given in the following table:
|SCG Count, By Level|
At the two-, four- and six-digit level, the list of goods is exhaustive. To obtain a complete list of codes at maximun detail, it is necessary to add those six-digit subheadings that have not been extended to the eight-digit level (codes in which the 7th and 8th digits are blank) to the count of 8 digit codes. The number of lowest-level codes thus obtained is 16,960 in 1996 and 17,104 in 2001.
In the classification, commodity descriptions are sometimes employed at the fifth and seventh digit levels to simplify the presentation. Codes have been assigned to the five and seven-digit level, because some of them were required for data collection.
The structure of the SCG can be illustrated by the example of Sockeye salmon in airtight containers:
|16||chapter||two digits||Preparations of meat, of fish or of crustaceans, molluscs or other aquatic invertebrates|
|16.04||heading||four digits||Prepared or preserved fish; caviar and caviar substitutes prepared from fish eggs|
|1604.1||subheading||five digits||Fish, whole or in pieces, but not minced|
|1604.11.1||subheading||seven digits||In airtight containers|
Sometimes the coding structure is simpler, as in Cocoa beans, whole or broken, raw or roasted:
|18||chapter||two digits||Cocoa and cocoa preparations|
|18.01||heading||four digits||Cocoa beans, whole or broken, raw or roasted|
|1801.00||subheading||six digits||Cocoa beans, whole or broken, raw or roasted|
In this latter case, the heading is repeated at the subheading level, and "00" is added to the code, but in the SCG, the heading description is not again repeated at the eight-digit level (i.e., 1801.00.00). This is because, for many headings there was no need to create further subheadings for data collection below the six-digit level. The addition of a significant number of duplicated six-digit-level descriptions (as illustrated above for the four-digit level) would have added considerably to the number of 8 digit classes.
b) Terminology and spelling
The terminology and spelling in the HS generally follows usage in England or France. The HS Convention calls for application of the HS descriptions exactly as written in English or French, to avoid confusion in comparing statistics. If, for example, the description of a class published by a given country differs from the HS description, users might suspect that the class content has been altered, even though the code is the same. The HS convention (Article 3) does, however, provide some flexibility, by allowing a country to make "...textual adaptations as may be necessary to give effect to the Harmonized System in its domestic law". Countries whose official language is neither English nor French have more freedom in writing descriptions. The application of HS descriptions in Canada creates some difficulties, as Canadian usage of the English and French languages is somewhat different from that in England or France, which were considered as language authorities, respectively, when the HS descriptions were prepared. The concessions (at the six-digit level) to Canadian practice were as follows:
Beyond the six-digit level, the intention was to be consistent with HS subheading descriptions, but spelling tends to reflect that of the author of the description. Furthermore, a set of alternative descriptions has been developed for use with industry questionnaires where HS terminology was deemed inadequate to elicit the required information, or "stand alone" descriptions (not requiring reference to the heading text) were required.
c) Units of measure
At this time, the SCG does not show a unit of measure for each commodity class. These units, however, are useful, and most commodity surveys collect data for both units of measure and value. Although decisions have been made about the most appropriate unit of measure for most commodities, the remaining problem cases are difficult to resolve. It is difficult, for example, to determine whether weight or number is the most useful unit of measure for some commodities. As well, some commodities may require two units of measure (e.g., weight and area are complementary units of measure for textile fabrics).
d) Industry of origin
Another objective of the SCG is to define each commodity class in such a way that it can be related to its industry of origin. Monthly commodity data for trade and production grouped by industry of origin can be used as a crude indicator of change in industry output, value added, demand for materials, and capacity utilization, and other measures which are normally available only from annual industry reports that are published years later. Furthermore, establishments are usually assigned to industries according to the products they produce. By using a commodity by industry concordance (which matches each of the lowest-level SCG codes to the industry deemed to be the primary producer of this product), it is possible to classify establishments to industries according to their reported products, and to verify the industry code for a given establishment when its annual statistical report is being processed. Although, in fact, some commodities are not principally produced by only one industry and many are produced as secondary products by different industries, the relationship holds true sufficiently well that the assignment of commodities to industries in this manner produces a useful tool. Accordingly, a concordance linking each of the lowest-level SCG codes to its industry of origin (at the six-digit NAICS level) has been prepared (see concordances).
e) Interpretative rules and legal notes
Formal notes and rules are an integral part of the HS and, therefore, the SCG. They consist of the section and chapter legal notes at the top of each chapter and a set of interpretive rules (see General Rules for the Interpretation of the Harmonized System). These notes and rules are formal, in that countries signing the convention to implement the HS bind themselves to follow them, and any disputes over an HS-based classification of a commodity would be argued in court in their context. The rules and notes are also applicable to the classes at the seven- and eight digit levels.
f) Current coverage
The SCG identifies the level of data collected in surveys of imports, exports, material used and shipments, by respondents to the Annual Survey of Manufactures as well as commodity data gathered in a variety of current surveys. The goods identified for each survey reflects the uniqueness of each universe surveyed and illustrate the manner in which different surveys can be accomodated within one general classification. Futhermore, the classes selected reflect the demand for data, their availability, questionnaire or coding manual design, method of data collection, and confidentiality of the information. The alphabetic codes used to identify these levels of data collection have the following meanings:
These codes are related to the commodities for which import data were collected for the specified reference year. The implementation of the HS for import statistics differs from that of the other series, because import statistics are coded according to the joint tariff-statistical code shown in the Customs Tariff (CT). In the CT code, the six-digit HS component is followed by two digits for tariff purposes, then two more digits for statistical purposes; the full ten digits being required to identify a specific commodity. Where statistical requirements are incompatible with the tariff structure, identical statistical breakouts are required from two or more tariff classes to facilitate the regrouping of data to meet statistical requirements. The SCG, having an eight-digit code and being a statistical classification, did not adopt all tariff codes; therefore, it identifies import classes that are identical to tariff classes or to groupings of tariff classes. A concordance linking the codes of the CT to those of the SCG carrying the flag I is available from Standards Division.
These codes appear in the Canadian Export Classification for the appropriate reference year. There are a number of exceptions which are available from Standards Division.
These codes were used to collect data on shipments of goods as reported in Section 8 of the questionnaires for the Annual Survey of Manufactures.
These codes were used to collect data on energy and materials used by manufacturers as reported in Section 5 and Section 6 of questionnaires for the 1996 Annual Survey of Manufactures. Where an S or M is not shown in a chapter, data is collected at the 2 digit or chapter level.
Current surveys (C)
These codes are used to collect data on specific goods in a variety of sub-annual surveys of manufacturers. The C codes cannot be used as a classification in the sense of covering the whole universe as is the case for the I, E, S and M codes. The surveys using these codes focus on very narrow ranges of commodities.
It will be evident from a perusal of the flags that the definition of the "Other" classes differs according to the survey identified. When more classes are identified in one survey than another, the "Other" class will not be comparable.
In spite of the large number of commodity classes, the commodity detail is insufficient to meet all requirements. This may be due to lack of space within the relevant range of codes or to the necessity to accommodate a different classification structure. In such cases, additional digits are allowed at the discretion of the subject-matter divisions. At this time, for example, nine-digit codes for use in the Annual Survey of Manufactures have been provided for in the SCG file. These codes and their descriptions are included in the versions of the SCG on this website.
The SCG is updated annually. See Annex E for a concordance and indication of the changes between 1995 and 1996. Updates come from a number of sources, including HS changes, incorporation of new detail from new surveys, changes in commodity detail covered by existing surveys, and basic changes resulting from commodity classification research.
"Harmonized System Changes 1996"
HS changes originate from the HS Committee which is composed of representatives from all signatories to the HS convention. This committee meets regularly at the offices of the World Customs Organization in Brussels, Belgium. It is supported by a permanent secretariat. Proposals for HS changes are submitted to the committee through national representatives. Normally, three or four years elapse between the time a proposal is presented to the committee and the time it affects the collection of data, and thus the SCG. The first set of changes affecting the HS component of the SCG came into effect on January 1, 1992 and consisted of a minimal number of description changes, additions and deletions. The next set of Harmonized System changes came into effect on January 1, 1996 and have been incorporated into this version of the SCG. The 1996 HS changes are significant in number and scope and reflect WCO recommendations or user initiated requests for revision. The text of approximately 125 HS headings, subheadings and classification numbers were modified by the WCO in order to revise or clarify meaning. As well, the 1996 HS changes included 253 deletions of six-digit subheadings, and the addition of 348 new six-digit subheadings. The deletion and addition of subheadings have allowed for more appropriate classification structures, for the incorporation of new technological products such as 'compact disc' products (see HS 8524.31) and to provide more detail for goods whose trade values are high. The 1996 HS changes impact a large number of eight digit SCG codes. A significant portion of the over 2000 code deletions and the over 2600 code additions are a result of the 1996 HS code changes. Every attempt was made to recreate, under the new HS code numbers, the SCG classes that were deleted. In some cases, however, the new HS structure precludes this, the result being a break in historical continuity. Another significant change to the HS takes place on January 1, 2002.
Changes also occur when new surveys are incorporated into the SCG. At this time a process of integration takes place, in which commodities at the appropriate level of the SCG are selected and negotiations are undertaken, in order to modify the seventh and eighth digits of the SCG to reflect the best arrangement for a standard. Most changes arise from ongoing surveys. Routinely, in the last half of each calendar year, a series of meetings to discuss changes in commodity detail to be covered by the various surveys in the next reference year takes place. From these meetings, changes to the SCG are made to reflect the latest requirements for commodity data, and survey coverage for the next data year is settled. Finally, in-depth studies of selected commodity groups are conducted periodically, taking into account the nature of the commodities on the market, requirements for data and modifications to the classification structure. A significant portion of the SCG should undergo such scrutiny annually, from which well-documented proposals for changes should be produced.
|Annual Survey of Manufactures (240 different industry questionnaires)||7,406 categories of shipments; 3,566 categories of materials||1988 data year|
|Industry Division current surveys (approx. 54)||varies by industry||about 90% were SCG-based for 1992 data|
|Water transport||483 categories||1991 data, to be replaced by SCTG 1|
|Truck transport||unknown||to be based on SCTG 1|
|Rail transport||unknown||to be based on SCTG 1|
|Dairy product surveys||varies by survey||draft classification ready 1991|
|Other Agriculture Division surveys||varies by survey||preliminary work done 1991|
|Family expenditure surveys||over 300 categories of goods||preliminary work done 1992|
|Consumer Price Index||over 182 categories of goods||no action to date|
|Capital Expenditure Surveys||varies by survey||field test completed and accepted by Methods and Standards Committee; not yet implemented, with the exception of Electric Power Industry Survey, 1991|
Concordances are prepared to assist users of commodity statistics to compare classifications and to link data. Two of the concordances included in this publication show how the codes actually used to collect data on imports (Annex C) and exports (Annex D) relate to the SCG. These concordances may be used to compare classifications or regroup data since the relationship between exports or imports and the SCG is 1 to 1 or many to one. Concordances in which classes in one classification relate to more than one class in another must provide ratios before the concordances can be used to regroup data.
A variety of concordances is available to assist users of commodity data. Analysts of commodity data may find concordances linking the classifications before and after HS implementation to be of interest. Others find it useful to group commodities by industry. In the latter context we would like to mention the following concordances: