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Controversy over Statistics Canada’s plan to obtain personal banking records is exposing growing concern over the reliability of the data currently produced by Canada’s statistics agency.

The agency’s reports on growth, employment, inflation and other economic statistics routinely dominate the news and heavily influence stock-market fluctuations. But the fast pace of digital trading that occurs after the release of these numbers is at odds with the imprecise, old-school methods still used to produce them.

Former chief statistician Ivan Fellegi, who led Statistics Canada for 22 years until he retired in 2008, still visits the agency’s Ottawa headquarters about twice a week and met privately last Thursday with current Chief Statistician Anil Arora to discuss the banking-records controversy.

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In an interview with The Globe and Mail, Mr. Fellegi said his understanding of the issue is that long-trusted surveys are no longer reliable and that his former agency should be more forthcoming about the seriousness of the challenge.

Specifically, he points to the agency’s survey on household spending, which recruits Canadians to fill out a diary over time that lists all of their spending.

“Basically, we couldn’t trust the data any longer,” he said, because so many people are declining to participate. Yet the survey continues to be produced and its results inform some of the agency’s most important reports, such as GDP figures.

“It’s moving markets. It’s a major, major important survey, but it’s so onerous that people are refusing to complete it in increasing numbers. Now, the response rate is not even quite 40 per cent,” Mr. Fellegi said.

“When 60 per cent of the population [asked] doesn’t respond, the data is likely to be very biased, unacceptably biased. So something needed to be done and [obtaining banking records] is the only viable alternative in sight, but the rollout didn’t really … explain properly to Canadians why we are into what is definitely a violation of privacy.”

Statscan is on the defensive over a planned pilot project that would see it obtain the personal banking records of 500,000 Canadians as of January. Mr. Arora, the current chief statistician, said in an interview with The Globe that he would be willing to push back that timeline if necessary as the agency addresses public concern over the plan.

Mr. Arora also responded to Mr. Fellegi’s concerns by saying that the problems with the current data should not be overstated.

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“I worked for Ivan for nearly two decades. I have the upmost respect for Dr. Fellegi and I think he is largely correct. I think this is a slow kind of moving issue that we have seen over time,” he said. “I think it would be a gross kind of stretch to say that all of those economic indicators are not useful. They are still strong and they are still very useful and they are still the best indicators that we have. What we are seeing is that over all, we are seeing a steady decline in response rates.”

Mr. Arora said one of the problems that the agency faces with the household survey is that respondents who fill out diaries on their spending may not think about their digital purchases, including automatic subscription services like Netflix. By obtaining a sample of Canadian banking records, Mr. Arora said the agency could produce more accurate figures on consumer spending.

The Statscan plan is now a major political issue as both the Conservative Party and the NDP are calling on the Liberal government to suspend Statscan’s plan to obtain banking records. Many individual Canadians are expressing strong objections to the plan in online comments, petitions, direct phone calls and e-mails to their banks.

The Senate banking committee has invited Mr. Arora, Innovation Minister Navdeep Bains, Privacy Commissioner Daniel Therrien, the Canadian Banking Association and others to appear as witnesses Thursday for a special hearing on the issue.

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