What does the model measure?
The main purpose of the model is to determine the Québec content of an expenditure in the economy. Based on different types of expenditures, also called “shocks”, the model assesses the economic benefits for Québec in terms of added value and net indirect taxes. It also estimates the contribution of imports and other production sectors, commonly referred to as “leakage”, in response to the simulated spending shock.
In the simulations, the economic benefits are divided into different categories: added value (and its components), labour, and tax contributions to different levels of government.
The input-output model makes it possible not only to estimate these benefits, but also to classify them as direct or indirect effects in the production process. Using the results of the model, it is therefore possible to assess the impact of a spending shock both in the sector that is directly affected and in its supplier sectors. This ability to iteratively break down economic impact is one of the model’s major advantages.
The Institut de la statistique du Québec has expanded the results of its impact studies to include greenhouse gas (GHG) emissions generated by economic activity. Data from the Canadian System of Environmental-Economic Accounting are combined with those from the Québec input-output model to determine GHG emissions intensity by industry sector. GHG emissions are measured by multiplying the results of an economic impact simulation in terms of added value by the GHG emissions intensity associated with the simulated project.
Nearly 55 years after its creation and after more than 15,000 simulations, the Québec input-output model remains as relevant as ever. Every year, the Institut updates the model on a recurring basis in order to respond to numerous requests from both public sector organizations and private stakeholders. In a field where analytical models are short-lived, the recurring use of the input-output model, 50 years after its implementation, is a remarkable success.
To learn more about the model, please refer to the following documents:
Le modèle intersectoriel du Québec : Fonctionnement et applications, édition 2017 (PDF) (in French only)
Bulletin sur différents résultats d’impact économique estimés par le MISQ (PDF) (in French only)
Limits of impact studies and responsibility of the Institut de la statistique du Québec
Although it can serve as a very useful complement to studies on ecological or social consequences, for example, an impact study carried out by the Institut de la statistique du Québec cannot replace market studies, profitability studies or cost-benefit analyses.
In addition, the Institut’s responsibility in carrying out an impact study is limited to using the model to measure the economic impact of the initial expenditures estimated by the client. The Insitut is not familiar enough with the client’s project to validate the information supplied by them, but it does provide the client with the information required to adequately process the initial data based on the model’s concepts and limitations.
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