Consumer Price Index

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Consumer prices rose 1.2% in the 12 months to March 2009, down from the 1.4% increase in February.

The upward pressure on the Consumer Price Index (CPI) came primarily from two sources: higher food and shelter costs.

Food prices, the largest factor, rose 7.9% during the 12-month period to March, on the heels of a 7.4% rise in February. March's increase was the largest since November 1986.

Shelter costs, the second largest factor, advanced at a 12-month rate of growth of 2.1% in March, after increasing 3.0% in February. While still a major contributor to consumer price growth, the 12-month change in the shelter price index has slowed since reaching a peak of 5.4% in July 2008.

Mitigating the overall increase in the CPI was a 6.2% decline in transportation costs. Year-over-year price drops for gasoline and for purchasing and leasing passenger vehicles were the primary downward contributors. Increasing prices for passenger vehicle insurance mitigated the overall 12-month drop in transportation costs.

Excluding gasoline, the CPI rose 2.4% in the 12 months to March. Overall, energy prices fell 11.2% during the same period, a larger drop than February's decline of 8.8%.

Seasonally adjusted monthly CPI falls

On a seasonally adjusted monthly basis, the CPI fell 0.3% from February to March, after increasing 0.4% from January to February. March's fall was due primarily to a 0.5% drop in the shelter price index. Tempering the fall was a 0.4% increase in prices for food and a 0.3% rise in transportation costs.

Excluding food and energy, the seasonally adjusted monthly CPI posted no growth from February to March, following a monthly rise of 0.3% from January to February.

12-month change: Food prices continue to push up consumer prices

The cost of food continued to be pushed up primarily by prices for food purchased from stores, which rose 9.5%. Excluding food, the CPI fell 0.2% in the 12 months to March.

Food price increases were widespread in March 2009 compared with March 2008, with large price increases observed for fresh vegetables (+26.5%), fresh fruit (+19.3%), non-alcoholic beverages (+10.2%) and cereal products (+11.0%).

A 12-month price increase of 54.9% for potatoes pushed up vegetable prices. This occurred largely as a result of poor harvests in Canada that led to a reduction in supply.

Price increases were also observed for meat (+7.6%) and bakery products (+7.4%). Meat prices rose mainly because of higher beef and chicken prices.

March's increase in shelter costs was due primarily to higher mortgage interest costs, natural gas prices and property taxes. The Mortgage Interest Cost Index, which measures the change in the interest portion of payments on outstanding mortgage debt was up 4.2% in March 2009 compared with March last year. This index has been slowing since reaching a peak of 9.0% in June 2008, reflecting the downward trend in mortgage interest rates and housing prices.

Mitigating the overall rise in costs for shelter were declines in prices for fuel oil and other fuels and homeowner's replacement costs. Prices for fuel oil and other fuels posted a fourth consecutive 12-month decline, falling 32.9%.

The 6.2% fall in the transportation price index was due primarily to falling prices for gasoline and the purchase and leasing of passenger vehicles.

Gasoline prices were down 21.0% in March 2009 compared with March 2008, following a 19.7% decline in February. The 12-month decline in March was due more to high prices in 2008 than to recent developments. On a month-to-month basis, gasoline prices rose 2.0% from February to March.

The cost of purchasing and leasing passenger vehicles fell 7.4% in March, following a 6.4% year-over-year drop in February. The decline in March was a result of higher rebates offered on new vehicles.

Tempering the overall decline on transportation costs was a 6.4% increase in passenger vehicle insurance premiums.

Provinces: 12-month change in consumer prices slows in most provinces

Compared with February, growth in consumer prices slowed in all provinces except Ontario and Quebec in the 12 months to March. In Ontario, consumer prices rose 1.8%, larger than the 1.5% increase recorded in February.

The larger increase in Ontario was due primarily to a rise in passenger vehicle insurance premiums.

In Quebec, the growth in consumer prices held steady, advancing 0.8%.

With the exception of Ontario, the only other province to outpace the national average was Saskatchewan, where prices rose 1.8%. However, this was slower than the 2.6% rise posted in February. Larger price declines for gasoline and a fall in homeowner's replacement costs were the primary reasons for the slowdown.

The 12-month rise in consumer prices in Alberta also slowed substantially, from 2.1% in February to 0.9% in March. The slowdown was due primarily to a 19.3% decline in natural gas prices, after increasing 4.5% in February.

Consumer prices fell 0.2% in Prince Edward Island in March 2009 compared with the same month last year.

Of the eight major components, rising food prices were the main upward contributor in all provinces, while a decline in transportation costs was the primary downward contributor.

12-month change in the Bank of Canada's core index increases slightly

The Bank of Canada's core index advanced 2.0% over the 12 months to March, up slightly from the 1.9% rise posted in February.

The seasonally adjusted monthly core index posted no growth from February to March, after increasing 0.4% from January to February.

For a more detailed analysis, consult the publication The Consumer Price Index.

Available on CANSIM: tables 326-0009, 326-0012, 326-0015 and 326-0020 to 326-0022.

Definitions, data sources and methods: survey number 2301.

More information about the concepts and use of the CPI are also available online in Your Guide to the Consumer Price Index (62-557-XIB, free) from the Publications module of our website.

The March 2009 issue of the Consumer Price Index, Vol. 88, no. 3 (62-001-XWE, free) is now available from the Publications module of our website. A paper copy is also available (62-001-XPE, $12/$111). A more detailed analysis of the CPI is available in this publication. See How to order products.

The Consumer Price Index for April will be released on May 20.

For more information or to enquire about the concepts, methods or data quality of this release, contact the Dissemination Unit (toll-free 1-866-230-2248; 613-951-9606; fax: 613-951-2848; prices-prix@statcan.gc.ca), Prices Division.