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Consumer Price Index, December 2016

Released: 2017-01-20

Consumer Price Index

December 2016

1.5% 

(12-month change)

The Consumer Price Index (CPI) rose 1.5% on a year-over-year basis in December, following a 1.2% gain in November.

Chart 1  Chart 1: The 12-month change in the Consumer Price Index
The 12-month change in the Consumer Price Index

12-month change in the major components

Prices were up in seven of the eight major components in the 12 months to December, with the transportation and shelter indexes contributing the most to the year-over-year rise in the CPI. The food index declined on a year-over-year basis for the third consecutive month.

Chart 2  Chart 2: Consumer prices increase in seven of the eight major components
Consumer prices increase in seven of the eight major components

The transportation index rose on a year-over-year basis for the fifth consecutive month, up 3.0% in December, after a 1.4% gain in November. This increase was led by gasoline prices, which increased 5.5% in the 12 months to December, following a 1.7% decline in November. At the same time, the purchase of passenger vehicles index rose less year over year in December (+2.6%) than in November (+3.0%), and the air transportation index registered its largest year-over-year gain since August 2013.

The clothing and footwear index increased 0.2% in the 12 months to December, following a 1.2% decline in November. This turnaround was partly attributable to the women's clothing index, up 2.0% on a year-over-year basis in December after decreasing 0.2% in November. Additionally, prices for footwear were flat in the 12 months to December, after declining 1.7% the previous month. Meanwhile, the children's clothing index (-4.5%) posted a year-over–year decrease for the eighth consecutive month.

Consumers paid 1.3% less for food in the 12 months to December. Prices for food purchased from stores decreased 2.8% year over year in December, with the fresh vegetables, fresh fruit, and cereal products indexes contributing most to the decline. In contrast, prices for fish, seafood and other marine products, and prices for sugar and confectionery rose in the 12 months to December. Prices for food purchased from restaurants were up 2.3% in the 12 months to December, following a 2.5% gain in November.

Chart 3  Chart 3: Food purchased from stores index
Food purchased from stores index

12-month change in the provinces

Consumer prices rose more year over year in six provinces in December than they did in November. At the same time, two provinces reported a deceleration in consumer price growth. In Nova Scotia and Quebec, the year-over-year advance in the CPI in December matched the increase in November.

Chart 4  Chart 4: Consumer prices rise at a faster rate in six provinces
Consumer prices rise at a faster rate in six provinces

In Alberta, the CPI increased 1.0% on a year-over-year basis in December, after rising 0.2% in November. The gasoline index rose 7.9% year over year in December, following an 8.6% decline in November. The electricity index was down less in the 12 months to December than in November. At the same time, natural gas prices rose less on a year-over-year basis in December than in November.

The CPI in Ontario was up 2.0% on a year-over-year basis in December. Homeowners' replacement costs contributed the most to this gain, up 7.4% in the 12 months to December. Electricity rates increased 11.2% year over year in December, matching the gain in November. At the same time, the fresh fruit index declined 9.2% in the 12 months to December.

In New Brunswick, the CPI increased 2.3% year over year in December, following a 2.5% gain in November. The telephone services index (-0.3%), which led this deceleration, declined on a year-over-year basis for the first time since November 2015. The homeowners' home and mortgage insurance index posted its smallest increase since October 2012, up 4.7% year over year in December, following a 9.4% gain in November. Meanwhile, clothing prices increased more in the 12 months to December in New Brunswick than at the national level.

Seasonally adjusted monthly Consumer Price Index

On a seasonally adjusted monthly basis, the CPI increased 0.3% in December, after declining 0.1% in November.

Chart 5  Chart 5: Seasonally adjusted monthly Consumer Price Index
Seasonally adjusted monthly Consumer Price Index

In December, six major components increased on a seasonally adjusted monthly basis, while the alcoholic beverages and tobacco products index declined 0.1%. The food index was unchanged.

On a seasonally adjusted monthly basis in December, the transportation index (+1.5%) posted the largest gain.

The evolution of prices in Canada

As 2017 marks the 150th anniversary of Confederation, we take a look back at an aspect of price movements in Canada.

In December 2016, the food index registered its third consecutive year-over-year decline, down 1.3%.

The last period of prolonged food deflation in Canada occurred in the early 1990s, from January to August 1992. During this eight month period, the year-over-year declines in food prices ranged from 0.7% to 2.1%.

The longest period of food price deflation recorded in Canada began in July 1952 and lasted for over one year, until September 1953. The year-over-year declines ranged from 1.5% to 7.1% over this period.





  Note to readers

A seasonally adjusted series is one from which seasonal movements have been eliminated. Users employing CPI data for indexation purposes are advised to use the unadjusted indexes. For more information on seasonal adjustment, see Seasonally adjusted data – Frequently asked questions.

New data table

As of January 20, 2017, CANSIMtable 326-8023, containing historical data for the Bank of Canada's preferred measures of core inflation, has been published.

Upcoming basket update

Every two years, the expenditure weights for the basket of goods and services used in the calculation of the CPI are updated based on new estimates from the Survey of Household Spending (SHS).

On February 24, 2017, with the release of the January 2017 CPI, these expenditure weights will be updated with the 2015 SHS. This new weighting pattern will replace the current expenditure weights, which are based on the 2013 SHS. Table 326-0031, Basket Weights of the Consumer Price Index, will be updated with 2015 basket weight data on February 20, 2017.

The index base period, for which the CPI equals 100, will remain 2002.

There will be changes to the CANSIM tables as two published series will be terminated: "Rental of digital media" and "Other home entertainment equipment, parts and services." As a result, their assigned vectors within CANSIMtables 326-0020 and 326-0021 will no longer be updated.

Next release

The CPI for January will be released on February 24.

Products

The December 2016 issue of The Consumer Price Index, Vol. 95, no. 12 (Catalogue number62-001-X), is now available.

More information about the concepts and use of the Consumer Price Index (CPI) is available in The Canadian Consumer Price Index Reference Paper (Catalogue number62-553-X).

For information on the history of the CPI in Canada, consult the publication Exploring the First Century of Canada's Consumer Price Index (Catalogue number62-604-X).

Two videos, "An Overview of Canada's Consumer Price Index (CPI)" and "The Consumer Price Index and Your Experience of Price Change," are available on Statistics Canada's YouTube channel.

Contact information

For more information, or to enquire about the concepts, methods or data quality of this release, contact us (toll-free 1-800-263-1136; 514-283-8300; STATCAN.infostats-infostats.STATCAN@canada.ca) or Media Relations (613-951-4636; STATCAN.mediahotline-ligneinfomedias.STATCAN@canada.ca).

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