The North American Industry Classification System (NAICS) and the National Occupational Classification (NOC) are data classification systems that help to define, organize, and categorize data related to economic activities.
The North American Classification System (NAICS) is a four-tier hierarchical system that classifies all economic activity within North America (Canada, the United States, and Mexico).
At the highest, most broad level, all economic activities are classified as operating within 1 of 20 sectors. NAICS has a four-tier hierarchical structure which means that an economic activity can be classified on four levels: sector, subsector, industry group, and industry. Following this structure, each economic activity within a sector can be further specified into a subsector. Within subsectors there are industry groups, and at the lowest level there are industries (there are 928 industries across all sectors).
Each economic activity is assigned a specific code that corresponds to the four-tiered classification system to make it easier to define, organize, and categorize labour market information. Depending on the context, the number of specified digits used will vary. The figure below provides an example of a NAICS code and how it is assigned.
Labour Market Information
NAICS data is available through the Labour Force Survey which is released monthly by Statistics Canada.
The Labour Force Survey provides data for each of the hierarchical levels. Essentially, this means that labour market information is available by sector, subsector, industry group, and industry. For example, each month within the Labour Force Survey there is data available on income by sector (2-digit codes). This is a high level breakdown of income across the 20 economic activity sectors. More specific data on the 928 industries is also available.
The Business Register also utilizes NAICS as a way to sort and organize data. The Business Register is Statistics Canada's repository for information on businesses operating in Canada. The registry can be filtered based on geography, employment size, and NAICS code and is continuously maintained.
Learn More About NAICS
The National Occupational Classification (NOC) is a system used to classify occupations into a four digit code according to their broad occupational category and skill level (now TEER categories).
The NOC system assigns occupations to 1 of 10 categories, known as broad occupational categories. The first digit of a NOC code identifies which category the occupation belongs to. The second digit of a NOC code indicates the level of education and training typically required for the occupation, this is known as skill level. For the 2021 census, "skill level" was replaced with "training, education, experience, and responsibilities,” also known as TEER level. The structure of NOC remains the same with the first digit representing the broad occupational category and the second digit representing the level of skill, training, etc.
For example, the first digit of the NOC code “3113” tells us that this represents a health occupation. The second digit tells us that this occupation usually requires university education. The last two digits are critical as they identify characteristics that are specific to the occupation. All together, “3113” represents the dentist occupation which is classified based on things such as main duties. The figure below provides an example of a NOC code and the basic structure.
Labour Market Information
NOC data is available through the census which is released every 5 years by Statistics Canada. The most recent census data was released throughout 2022 and contains data and information collected in 2021. Employment income statistics are available by NOC 1, 2, 3, and 4 digit codes; this means that data is available for broad occupational groups and specific occupations (and other groups in between).
Learn More About NOC
Interested in finding a specific NOC code? Check out this tool developed by the Government of Canada.
If you want to learn more about NOC, The Government of Canada has a helpful tutorial.
NAICS VS. NOC
NAICS and NOC can be used together to get a comprehensive picture of the labour market from both supply and demand perspectives. The way they work is similar, however each of the classification systems work with data differently.
NAICS classifies industries which is a top-down approach that focuses on the employer. NAICS helps to understand the demand perspective of what’s required and happening within an industry.
NOC classifies occupations which is a bottom-up approach that focuses on employees. NOC helps to understand the supply perspective of what individual characteristics are present in an occupation. Together, NAICS and NOC help to complete a full picture of the labour market that includes both labour supply and demand.
NAICS 2022 Version 1.0 is a revision to NAICS that was approved on July 30, 2021. There are two types of changes: real changes and virtual changes.
Real changes affect the meaning and scope of a classification. For example, NAICS 311611 Animal Slaughtering has been replaced by three new NAICS codes: NAICS 311616 Beef Cattle Slaughtering, NAICS 311617 Hog Slaughtering, and NAICS 311619 Other Animal Slaughtering. This will make it easier to differentiate between and find specific data and information on economic activities.
Virtual changes alter coding, titles and/or definitions which have no effect on the meaning or scope of the classification. For example, NAICS 311625 Poultry Processing has been changed to NAICS 311615 Poultry Slaughtering and Processing.
NOC 2021 Version 1.0 is an updated version of NOC that was approved on September 21, 2021.
“Skill level” has been replaced with “Training, Education, Experience and Responsibilities (TEER) categories.” These new categories more accurately reflect the level of training, education, and experience required to gain entry into each occupation, and the responsibilities associated with it. There are six TEER categories that have replaced four skill levels.
Changes to Occupations
This new version of NOC has introduced changes to existing unit groups and the creation of new ones. For example, there is now a new NOC code for the occupation of cyber security specialists. These changes reflect the evolution of the labour market.
STEM NOC variant
The NOC update provides a new way to analyze the labour market through a science, technology, engineering, and mathematics (STEM) lens. The new STEM NOC variant divides occupation data into three categories: STEM, STEM related, and other than STEM.
This article has been sponsored in part by the Future Skills Centre.