Section K: Price Indexes

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A.D. Holmes, Prices Division, Statistics Canada, (Retired)

Retail Price Indexes (Series K1-32)
Wholesale Price Indexes (Series K33-55)
Export and Import Price Indexes (Series K56-67)
Industry Selling Price Indexes (Series K68-107)
Construction Price Indexes (Series K108-159)
Implicit Price Indexes of Gross Fixed Capital Stocks (Series K160-171)
Implicit Price Indexes of Gross National Expenditures (Series K172-183)

The price indexes presented herein have been grouped into seven subsections, namely: (1) consumer price indexes, series K1-32, (2) wholesale price indexes, series K33-55, (3) export and import price indexes, series K56-67, (4) industry selling price indexes, series K68-107, (5) construction price statistics, series K108-159, (6) fixed capital stocks implicit price indexes, series K160-171, and (7) implicit price indexes of gross national expenditures, series K172-183.

Group (1) indexes relate to purchase-for-consumption of specific population groups, whereas groups (2) to (5) relate to the production and distribution of goods and services. Group (6) reflects prices of the stock of fixed capital in Canada available for future production or consumption, and group (7) provides price indexes for broad summary aggregates of economic activity within the national accounting framework.

In the current edition of this publication, series which were published in the previous edition (1965) and which were terminated prior to 1961 have not been repeated. Discontinued series not repeated herein, continued series, and new series added in the current edition are summarized in tabular format in the descriptive text provided below for each group. For data, descriptive text and source references relating to series not reproduced in the current edition, users should consult Section J: Price Indexes, 1965 edition, pp. 281-305. For series continued in the current edition and for new series introduced herein, source references are included directly in the description of each series provided below. Publications in which current continuing indexes are released are also listed.

Only annual data are presented. With some exceptions, however, subannual figures are available apart from the very early periods, generally monthly. Also, indexes for only broad aggregates and their major components are presented here. Indexes for subcomponents and lower levels of detail are published currently and historical series of them over fairly long periods are available on request from Statistics Canada, Ottawa, Ont. Classification changes and other difficulties affecting comparability of series over longer periods tend to be more acute at less aggregative levels, however, and users are urged to consult Statistics Canada on questions of consistency, comparability and relevance of specific, detailed series in particular uses.

Particular attention is drawn to the fact that the indexes in this current edition, with only a few exceptions, have been placed on a 1971 price reference base, that is, 1971 = 100. While this does not change the year-to-year movements of previously published series (1965 edition), it does change the index number figures. The price reference base is simply the period for which an index is set equal to 100. An index can be arithmetically converted to any other reference base by multiplying each index number in the series by '100 ÷ the index number of the preferred reference period'.

The tables are available as comma separated value files (csv). They may be viewed using a variety of software. You may have to create an association between your software application and the csv files. The pdf files should be used to verify table formats. For example, footnotes appear in a column to the right of the cell they reference in the csv files; while in the pdf files footnotes appear as superscript numbers.

General note

As stated in the 1965 edition, 'a price index number is a device for measuring price change in a group of commodities and services with reference to a base period for which the index is made equal to 100'. The notion of a price index may be considered in two ways. It may be viewed as measuring the changing aggregate value between two periods of a given set or basket of goods and services, where the basket is valued in each period in terms of prices of that period. The index then is the value in one period expressed as a percentage of the value in the other period, the price reference base period. Because the basket is identical between the two periods, the index measures price change only. Alternately, a price index may be viewed as an average of the price relatives between two periods of a given set of goods and services, in which a price relative is the ratio of the price of a commodity in a current period to its price in a price reference (base) period. In this view, it is seen more directly that a price index measures price change. In practice, most price indexes are weighted averages of the price relatives of the goods and services included in them. In either case, prices of individual items within price indexes should be comparable from period to period, that is, prices should relate to identical or equivalent quantity and quality of goods or services.

There are a variety of types of index numbers reflecting variation in the types of averages involved and the weight base periods employed. The most commonly used type for the series presented in this edition is the Laspeyres price index which is a base-period fixed-basket index or, alternately, a weighted arithmetic average index. It is the type employed for all series in the first five subsections listed above, that is for series K1-159, with the exception of series K146 which is an unweighted geometric mean. The indexes for the remaining series K160-183 are a quasi Paasche type, termed 'implicit' price indexes, computed as a byproduct of the derivation of constant dollar value series. The latter are described more fully in the texts below relating to series K160-171 and series K172-183.

The Laspeyres index formula may be written algebraically as

where the p's designate prices, the q's quantities, and the subscripts n and o the given current and base periods respectively. The Σ sign indicates summation over all the individual items of goods and services included in the index basket. The p's and q's relate to the individual detailed items. This 'basket' formula may be rewritten without changing the value of the index (I) as

In this formulation, the index is seen to be a weighted arithmetic average of the price relatives (pn/po) of the individual detailed items included in the index. Here the weights attached to the price relatives are shown as the values in the base period of the base-period quantities expressed as a percentage or relative value of the base-period aggregate value of the index basket. In formula (1), of course, the q's in effect are weights attached to absolute prices. In practice, formula (1) tended to be employed for indexes in earlier periods, whereas formula (2) was and is used generally in latter and current periods. It should be noted that the two formulations yield identical indexes, the choice between them being dictated by practical problems of actual computation.

In the basic Laspeyres index the price reference base and the weight base period are identical, namely period '_o'. In practice the two periods can be different with the basket quantities relating to a period other than the price reference period. However, when this occurs, for example, if the q's relate to an earlier period, say "0-2", it is essential for weights in formula (2) above to value those quantities in terms of prices of the price reference period. In the example suggested the value weights attached to the price relatives (p_n/p_o) would become

If this is not done, the index based on formula (1) will differ from that based on formula (2).

A final technical point concerns the fact that the longer term historical price index series are composed of chronologically successive but separate Laspeyres-type indexes, each separate index being based on an index basket and price reference base appropriate to the shorter segment of years to which the separate index relates. The successive indexes are 'linked' at selected overlapping periods to provide a longer term historical series. For example, the Consumer Price Index for Canada, 1913-1975 is a linked Laspeyres-type index derived by linking six separate but closely related indexes covering six distinct periods within the longer term of the linked series.

The necessity for linking arises because price index baskets of goods and services appropriate to a given period of time become less and less relevant to actual patterns of production, distribution and consumption in the economy in later time periods, and indexes in which such earlier weighting systems are used tend to become less reliable measures of current price movements. Accordingly, weighting systems for indexes are updated periodically to maintain the relevance of indexes to current conditions. Also periodically, price reference base periods are updated to facilitate percentage change comparisons among current time intervals and among indexes. To maintain a longer term index series the old index and the updated index are linked and the combined series placed on the most recent official price reference base.

Linking may be accomplished mechanically in a variety of ways. Given a new index with updated basket and a new price reference base, a standard practice is to link the old index to the new by multiplying the old index numbers by the ratio of the new to the old index at a selected period where both old and new index numbers overlap. In effect, then, the old index measures price change up to the link period and the new index measures price change forward from the link period. At the same time, both the adjusted old index numbers and the new index numbers express prices in any given year as a percentage of prices in the new price reference period. If the price reference year is not updated, then the new index is linked to the old using the ratio of the old to the new at the link period (rather than the new to the old). It should be emphasized that in linking indexes to form longer series, separate linking must be carried out at each level of detail of an index for which the linked series is wanted, using the ratio between the two indexes at the particular level of index detail being linked.

The choice of the link period is important. For linking, the old and new indexes must overlap, that is, there must be a common period in which both indexes are available. Accordingly, the minimum overlap period must be one year for annual indexes and one subannual period (month) for subannual indexes (monthly). The overlap period often is longer than the minimum required and a choice must be made of a particular year (month) or a sequence of years (months) and the link ratio between the two indexes calculated for that link period. Because index movements are unlikely to be the same for the two indexes throughout the overlap period link ratios based on different periods will not be identical. While there is no unique answer to the question of which, then, is the best link period, the problem of choice among them is minimized if prices are fairly stable over the overlap period or changing uniformly among commodities included in the two indexes. In this case, differences among alternative link ratios are slight. Where price movements are not fairly uniform among items in indexes to be linked, a link ratio based on a longer period averages out the differences among ratios of shorter link periods.

In the following descriptions of the specific price indexes presented in this volume information is provided in the following sequence: (a) an introductory general note, (b) basic source or sources for historical series of the particular price index presented and current publications in which current statistics on the price indexes are released, and (c) the objectives, scope and concepts of the indexes and the essentials of the methodology employed in their construction, including the primary sources of information on their nature and the detail of their construction. The summaries of necessity tend to be brief. Users requiring fuller accounts of the indexes may wish to consult the source documents and/or consult with the producers of the indexes. The price indexes presented here are produced at Statistics Canada with responsibility for the various series being vested in particular divisions of the bureau as follows: Prices Division: series Kl-55 and K68-159; External Trade Division: series K56-67; Construction Division: series K160-171; and Gross National Product Division: series K172-183.

An important source reference for historical and current series of price indexes (and other series) has been developed by Statistics Canada since publication of the 1965 edition of this volume. The new source is the Canadian Socio-economic Information System (CANSIM) which is a fully computerized data bank. A Summary Reference Index is available, free on request, which provides a key to the contents of CANSIM. A Users' Manual for Data Retrieval and Manipulation, (Catalogue 12-531), and a Series Directory containing titles and descriptive detail of series in CANSIM are available from Statistics Canada, Ottawa, K1A 0Z8. In the description of indexes below, the matrix numbers for the series stored in CANSIM are provided as a source reference for historical data.

Retail Price Indexes (Series K1-32)

General note

Retail price indexes measure the changing cost to consumers of selected goods and services. The indexes are based on changing prices paid by consumers in retail outlets, including private and government stores, offices and other consumer service establishments. Prices in the indexes include sales and excise taxes insofar as they enter into the cost required to be paid by the consumer for acquisition of the goods or services from such retail outlets.

Retail price indexes presented in this edition and those presented in the 1965 edition are listed in the table below, including the periods covered in each edition and the price reference base periods. The dash (–) in columns (1) and (2) indicates the series is not included in the edition specified in the column heading.

For series J128-131 and series J132-138, see the 1965 edition of this volume (Section J) for index figures and their concept, scope and methodology.

Users should note also that the 1965 edition, series J147-152, which has been continued and extended in this edition as series K8-18, have been converted to a new price reference base 1971 = 100.

Source: Historical Statistics of Canada, (1965 edition) p. 304, series J139-146.

For a more detailed description of methods than is given here, see pp. 288-289 of the 1965 edition, and additional sources cited therein.

The cost-of-living index numbers presented here are reproduced from the 1965 edition because the indexes for the period 1913 to January 1949 are incorporated, through linking, in the longer term series K8-18 (Consumer Price Index for Canada) presented below. An understanding of the latter longer term series is therefore dependent on the description of these index series K1-7.

The cost-of-living index from 1913 to 1952 is a linked series of three separate indexes, namely, (a) an index for the period 1913 to 1926 (1913 = 100), (b) one for the period 1926 to January 1935 (1926 = 100) and (c) an index for the period January 1935 to 1952 (1935-39 = 100). The (b) index is linked to the (c) index using the ratio of the two indexes for January 1935. The (a) index is then linked to that combined series using the ratio of the linked (b) index and the (a) index for the year 1926. Monthly indexes were linked first and then averaged to obtain the annual indexes.

Series No.			Period covered		Price reference period = 100
–	J128-131	Price index numbers of a family budget (Dept. of Labour)	–	1900-39	–	1913
–	J132-138	Price indexes of selected retail services	–	1900-38	–	1913
K1-7	J139-146	Cost-of-living index	1913-52	1913-52	1935-39	1935-39
K8-18	J147-152	Consumer price index	1913-75	1913-60	1971	1961
New series
K19-22	–	Consumer price index for Canada, classified by goods and services	1961-75	–	1971	–
K23-32	–	Consumer price indexes for regional cities	1940-75	–	1971	–

The concept for the (a) index covering the period 1913 to 1926 (1913 = 100) was 'the measurement of the general movement of retail prices and living costs in the country as a whole'. A Laspeyres base-weighted index formula was used with weights based on the total consumption of each commodity in 1913. Prices used were obtained from the Department of Labour's collection for the earlier years and from direct surveys of retailers. The Department of Labour prices were collected by local correspondents of the Labour Gazette in approximately 60 cities, with Canada prices being simple averages of city prices.

In the (b) index in the linked series 1926 to January 1935, the concept of the previous period was continued. Weights were updated to 1926 and again based on aggregate consumption in Canada. The number of commodities included in the index was greatly increased, however.

For the (c) index from 1935 to 1952, a modification in concept and scope of the index was introduced. Weights for commodities, subgroups and groups were based on a 1938 family budget survey of urban wage-earner families with annual earnings ranging from $450 to $2,500. The index thus was specifically oriented to reflecting changes in the cost of living of a particular, but still broad, consumer group rather than consumers as a whole.

Source: CANSIM, Matrix No. 429(A) for series K8, 1913 to 1975; K9-18, 1949 to 1975. Retail Price Section files, Prices Division, Statistics Canada for series K9-14 and combined series 15-18, 1926 to 1948. Current indexes are published in Consumer Price Movements, (Catalogue 62-001) and Prices and Price Indexes, (Catalogue 62-002), both published monthly.

The Consumer Price Index for Canada, from 1913 to 1975 is a linked Laspeyres-type index derived by linking six separate but related indexes covering six distinct periods within the longer term. The six period indexes may be summarized as follows:

Index designation	Period covered	Weight base period	Price reference period	Link ratio period
(a)	1913-25	1913	1913
(b)	1926-34	1926	1926	1926
(c)	1935-48	1938	1935-39	Jan. 1935
(d)	1949-60	1947-48	1949	Jan. 1949
(e)	1961-72	1957	1957	Jan. 1961
(f)	1973-75	1967	1967	Apr. 1973

Indexes designated (a), (b) and (c) are those described above under series K1-7. Note that the link ratio period (last column) is the period for which the ratio of the designated index to that of the immediately preceding index is used to link that particular pair of indexes. For example, the ratio between the (b) and (a) indexes in 1926 is used to link that specific pair of indexes. Also, with the exception of the (e) and (f) indexes, the link ratio period corresponds with the starting point of the designated index, either the price reference period or the beginning month of it. The reason for and the effect of the recent departures from this practice are outlined below in the descriptions of the (e) and (f) indexes.

The (d) index above represented a major updating of the item content and weighting system of the preceding cost-of-living index (see The Consumer Price Index, January 1949 - August 1952, Catalogue 62-502). The title was changed to Consumer Price Index to avoid the implication that the index measured all changes in living costs. The index was defined as measuring "the percentage change through time in the cost of purchasing a constant 'basket' of goods and services representing the consumption of a particular population group during a given period of time". The 'target group' for the index was modified to include families (1) living in cities of 30,000 population or more, (2) ranging in size from two adults to two adults with four children, and (3) with incomes ranging from $1,650 to $4,050. Index weighting was based on data from a family budget survey, (Canadian Non-farm Family Expenditures, 1947-1948, Catalogue 62-513) and the item content and price samples were expanded to reflect the buying habits and outlet sources of that period. The price reference base was changed to 1949 = 100 and the previous linked indexes were linked to the new index using the link ratio for January 1949.

Prices in the index from 1949 onward were collected from retail outlets at frequencies ranging from monthly to only annually depending on the volatility and sensitivity of prices. Where changes through time in qualities of items to be priced created an adjustment problem to ensure comparability of prices from period to period, collection was restricted to eight cities across Canada where full-time pricing agents were located. Where prices could be satisfactorily collected by mail, pricing was extended to 33 cities. Within each city judgment samples of typical retail outlets, by outlet type, were selected for pricing of index items characteristically sold therein, and prices were collected for narrowly specified qualities of items in those outlets. For each item, city average prices and then Canada average prices were derived from reported prices, using a system of internal weighting reflecting the relative importance of qualities, outlets and cities. Indexes were then computed for each item and weighted in a Laspeyres-type formula to derive indexes for successively larger and larger groupings of items and the 'total' index.

The index was again updated, effective January 1961, respecting item content, outlet sources and weights (The Consumer Price Index for Canada (1949 = 100), Revision Based on 1957 Expenditures, Catalogue 62-518), resulting in the (e) index indicated in the summary table above. The income criterion for the targeted population group for the index was revised upward to the range $2,500 to $7,000, in keeping with the general upward shift in incomes of urban families. The weighting system was revised based on family expenditure patterns of 1957 (Urban Family Food Expenditure, 1957, Catalogue 62-516 and City Family Expenditure, 1957, Catalogue 62-517). With the advent of government-sponsored hospital care plans direct payments by consumers for this service became negligible and premiums paid did not reflect the price of the service. Accordingly, this item was dropped from the index. The bulk of pricing continued to be carried on by full-time pricing officers in eight major cities across Canada covering the full range of goods and services in the index. In seven other cities, part-time agents undertook pricing for a limited but significant range of items, including foods. Pricing by mail in smaller centres for less complex items was continued. Rents paid and data on the qualities of corresponding rental accommodation were obtained from monthly surveys of some 10,000 rented households in urban areas through the continuing Labour Force Survey.

The 1957-weighted index was linked to the 'official' Consumer Price Index series at January 1961 using the link ratio of that month. Even though the newly weighted index was available from 1957, the 1947-1948 weighted index was retained as the 'official' index for the period 1957 to 1960, to avoid very difficult revision problems of users where the official index was employed in escalation clauses of wage and other income contracts. For the total and most main component indexes, the 1957-weighted index rose insignificantly less than the official indexes. For the transportation and the recreation and reading components, the upward movement of the 1957-weighted indexes was appreciably less.

The latest periodic updating of the Consumer Price Index (the (f) index, above) incorporated a revised weighting system based on family spending patterns in 1967 (Urban Family Expenditure, 1967, Catalogue 62-530) and within the food component, patterns of food purchases in 1969 (Family Food Expenditure in Canada, 1969, Catalogue 62-531). The target population group for the index was widened to include urban families ranging in size from two to six persons of any adult-child composition, and the income range was updated and broadened to $4,000 to $12,000. The item content and price samples were extended and improved. However, doctors' services, optical care and prepaid medical care were deleted from the index because the introduction of federal-provincial medical care plans rendered realistic pricing through time highly improbable. The 1967-weighted index was linked to the previous linked series at April 1973, using the link ratio between the official linked series and the 1967-weighted index for that month.

Full details of the 1967 weight revision and an extended discussion of linking procedures and the rebasing of historical series to various price reference periods is given in The Consumer Price Index for Canada (1961 = 100) Revision Based on 1967 Expenditures, (Catalogue 62-539).

The long-term linked series from 1913 to 1975 on the 1961 = 100 price reference base was rebased to 1971 = 100 by arithmetic conversion. Current indexes are published monthly on the 1971 reference base.

Source: CANSIM, Matrix No. 429(A) for series K19 and K21, Matrix No. 431(A) for K20 and K22. Current indexes are published in the Consumer Price Index, (Catalogue 62-001) and Prices and Price Indexes, (Catalogue 62-002), published monthly.

The series K19 is identical to the series K8 described above. Series K20-22 result from a reclassification of the items in the Consumer Price Index for Canada into two broad categories, namely goods and services, according to 'their most characteristic or dominant attribute'. Indexes for sub-groups within 'Goods' classified by categories of expected useful life of the item are published in the above sources, as are indexes for sub-groups within 'Services' classified in broad functional categories. This classification system is a detailed reordering of items in the index. It is not just a merging of the traditional purpose classifications of the parent index.

The item content of the goods and services classifications and sub-groups within them is detailed in Appendix II(a) of The Consumer Price Index for Canada, Revision Based on 1967 Expenditures, (Catalogue 62-539). Appendix II(b) on page 41 of that publication provides a graphic outline of the system.

Source: CANSIM, Matrix No. 7116 for K23 (1952 to 1975), K24-29 and K32 (1949 to 1975). Retail Prices Section files, Prices Division, Statistics Canada, K24-29 and K32 (1940 to 1948) and K30-31 (1940 to 1975). Current indexes are published monthly in Consumer Price Indexes for Regional Cities, (Catalogue 62-009), Statistics Canada.

The Consumer Price Indexes for regional cities are similar in concept and methodology to the Consumer Price Index for Canada (series K8-18), with the population group to which a given city index relates being a specified range of families living in the given city. Generally, the city population groups are similar to the Canada index group respecting range of income and family size and composition. The index for a regional city measures the effect of price change in that city on the cost of purchasing a constant (or equivalent) basket of goods and services representative of the expenditure-for-consumption patterns of the specified population group in the particular city. The indexes thus reflect the average movement of consumer prices in the respective cities. The indexes, however, cannot be used to compare levels of prices among cities, levels having been arbitrarily set equal to 100 in all cities in the price reference year (1971=100). The historical series are linked Laspeyres-type indexes.

Indexes for regional cities were first introduced in 1941 for eight cities, namely Halifax, Saint John, Montreal, Toronto, Winnipeg, Saskatoon, Edmonton and Vancouver (see Regional changes in living costs, Canada, August 1939 to April 1941, Catalogue 62-D-91). The item content and weights in each city were based on a 1938 family budget survey of urban wage-earner families with annual earnings ranging from $450 to $2,500. The price reference base was August 1939 = 100. Prices used in the indexes were the city prices collected in the price samples of the Canada index.

The indexes were converted to the reference base 1949 = 100 and new indexes with updated content and weights based on a 1947-1948 family budget survey (Canadian Non-farm Family Expenditures, Catalogue 62-513) were linked to the former indexes at September, 1953 using the link ratio of that month (see Prices and Price Indexes, October 1953, pp. 4-5, Catalogue 62-002). For the 1947-1948 weighted indexes, the index population group was revised, as in the Canada index, to include families ranging in size from two adults to two adults with four children, and income of $1,650 to $4,050. The index title was changed to 'Consumer Price Index'. Calculation of the city indexes from September 1953 was similar to that for the Canada index except for the shelter component. In city indexes the weight for home ownership was imputed to rent, that is, the price movements of home ownership were measured by changes in rents, whereas in the Canada index the home ownership component of the shelter index was measured directly by price and cost elements of ownership and maintenance. The effect of this difference in pricing was of little importance until fairly recent years.

Indexes for two additional cities also were introduced in the early 1950s, for Ottawa and for St. John's, Newfoundland. The Ottawa index was released in October 1953. It was originally developed on a reference base August 1939 = 100 and then converted to 1949 = 100. Weights used were those of the Canada index rather than the Ottawa city weights. Ottawa prices were used for food, fuel and lighting, rent, household supplies and services and miscellaneous items, whereas Toronto price indexes were employed for clothing and home furnishings (Prices and Price Indexes, October 1953 p. 5). A 1947-1948 weighted index based on Ottawa family budget patterns and Ottawa prices was linked to the former index at September 1953, as in the other city indexes.

The St. John's index was constructed on the reference base June 1951 = 100 and released in 1951 (St. John's, Newfoundland, Cost-of-Living Index, June 1951 = 100, Reference Paper No. 28, Catalogue 62-D-94, 1951). The item content and weights in the index were based on a range of data on production, imports and consumption from several sources and reflected a consumption pattern typical of average families in St. John's of the 1948 to 1950 period. Prices used in the index were collected by pricing agents located in St. John's. In the September 1953 revision of other city indexes, only a change in titles and a merging of some component classes were made for the St. John's index.

The city indexes were again updated for content, weight and price samples, effective February 1962. In this revision, weights were based on family expenditure patterns of 1957 (Urban Family Food Expenditure, 1957, Catalogue 62-516, and City Family Expenditure, 1957, Catalogue 62-517) in the respective cities. In regions where government sponsored hospital care programs made direct pricing of such services unrealistic, hospital care was deleted from the city indexes. As with the Canada index, the income range for the city target population group was revised upward to range from $2,500 to $7,000, and the price reference base year was retained as 1949 = 100. The 1957-weighted index was linked to the preceding linked series at February 1962 using the link ratio of that month.

The latest updating of index contents and weights was introduced in April 1973. Prior to that, city indexes had been arithmetically converted to a 1961 = 100 price reference year. Weights for the new indexes were based on city spending patterns in 1967 (Urban Family Expenditure, 1967, Catalogue 62-530) and within the food component 1969 patterns (Family Food Expenditure in Canada, 1969, Catalogue 62-531). The target population group was changed to include urban families of two to six persons of any adult-child composition, with income of $4,000 to $12,000. Because of growth in federal-provincial medical care programs and attendant direct pricing difficulties, doctor's services, optical care and prepared medical care were deleted as items in city indexes. The 1967-weighted indexes were linked to the previous 1961 = 100 linked historical series for each city at April 1973 using the link ratio of that month. The entire historical series were then arithmetically converted to the new price reference year 1971 = 100, for each city. Some 300 items are included in Consumer Price Indexes for Canada and regional cities.

Current indexes are published monthly and are available for other cities in Canada. Historical series of shorter duration also are available on request for other cities and separately for Saskatoon, Regina, Edmonton and Calgary. Indexes for major components of each city index are published currently and these as well as more detailed component indexes over varying historical periods are available on request from the Prices Division, Statistics Canada, Ottawa.

Wholesale Price Indexes (Series K33-55)

General note

The term wholesale price indexes may be ambiguous. The indexes include prices at various stages in the production and distribution of raw and processed materials, semi-finished goods and fully manufactured products. The prices relate to larger scale or bulk transactions. The indexes should not be interpreted therefore as relating to prices of 'wholesalers' or the 'wholesale trade'. Rather, the indexes measure movements of prices of a very broad but ill-defined mix of materials and products below the retail level.

The wholesale price indexes presented in this edition and those presented in the 1965 edition are listed in the table below, including the periods covered in each edition and the price reference base periods. The dash (–) in columns (1) and (2) indicates the series is not included in the edition specified in the column heading.

For index numbers in the 1965 edition not repeated herein, namely J1-14, J15-33, J45-61 and J62-69 and descriptions of them, readers are referred to Section J: Price Indexes (beginning page 281) in the 1965 edition. Note also that old series J73-74 have been continued in this edition as series K137 and 140, a later subsection (Construction Price Indexes).

Series No.			Period covered		Price reference period = 100
Current edition	1965 edition	Series title	Current edition	1965 edition	Current edition	1965 edition
–	J1-14	Wholesale price indexes, by commodity groups (Mitchell)	–	1868-1925	–	1900
–	J15-33	Wholesale price indexes by commodity groups (Dept. of Labour)	–	1890-1924	–	1890-99
K33-43	J34-44	Wholesale price indexes, chief component material classification	1867-1975	1867-1960	1935-39	1935-39
–	J45-61	Wholesale price indexes, classified according to origin and degree of manufacture	–	1890-1948	–	1926
–	J62-69	Wholesale price indexes, classified according to purpose	–	1890-1948	–	1926
K44-46	J70-72	Wholesale price indexes, classified according to degree of manufacture, industrial materials	1890-1975	1890-1960	1935-39	1935-39
K137	J73-74 140	Wholesale price indexes, classified by residential, non-residential building materials	1926-75	1926-60	1971	1935-39, 1949
K47-55	J75-83	Wholesale price indexes of Canadian farm products	1890-1974	1890-1960	1935-39, 1913	1935-39, 1913

Source: Historical Statistics of Canada, (1965 edition), pp. 293-294 for period 1867 to 1960; Prices and Price Indexes (Catalogue 62-002), successive issues, for period 1961 to 1975; CANSIM, Matrix No. 262. Current indexes are pub-lished in the monthly Industry Price Indexes, (Catalogue 62-011).

The general wholesale price index is a linked series of five separate indexes, each covering a specific period within the longer term, and each having a unique weighting diagram representing an updating of weights to reflect the changed mix of materials and products of the successive index periods. The five period-indexes may be summarized as follows:

Index designation	Period covered	Weight base period	Price reference period	Link ratio period
(a)	1867-1889	none	1890
(b)	1890-1912	around 1900	1890	1890	Net weights
(c)	1913-1925	1913	1913	1913
(d)	1926-1934	1926	1926	1926
(e)	1935-1975	1935-39	1935-39	Dec. 1934

The description of the indexes and methods in constructing them given below have been condensed for the period 1867 to 1960 from the more detailed account provided in the 1965 edition of this publication (pp. 281-284).

The index numbers designated (a) in the above summary covering the period 1867 to 1889 were computed as unweighted geometric means of price relatives of 89 commodities. Prices were obtained from newspapers and trade journals. Indexes for components within the general (total) index were at best only approximate indicators of price movements for each group because of the small numbers of quotations, which were chiefly in the vegetable and animal product groups. The indexes were calculated retroactively on the price reference base 1890 = 100 and were linked to the (b) index using the link ratio between items for the year 1890.

For the (b) index of the period 1890 to 1912, a weighted Laspeyres index formula was introduced. Weights were 'net' quantities marketed in a period not later than 1900, that is, around 1900. The concept of 'net' marketings required that the quantities marketed of a commodity, for example wheat, be exclusive of quantities which were later used in domestic processing or production of another product, for example flour. This avoided over-weighting of the price of commodities at earlier stages of production which would be duplicated otherwise through prices of commodities at later stages. Prices were obtained from newspapers and trade journals, a major source being the Department of Labour's collection mainly from trade journals. The number of price series ranged between 203 and 247. As stated above, the (a) and (b) indexes were linked using the link ratio of 1890.

In the (c) index, for 1913 to 1925, a weighted Laspeyres-type index was continued with commodity weights updated to net marketings of the year 1913. The number of price series used in the index was 236. Lesser use was made of newspapers and trade journals for prices, with business firms and government agencies becoming an alternative source. This index was linked to the preceding (b) index using the link ratio for 1913.

The (d) index, for 1926 to 1934, was based on an updated weighting diagram, using net marketings of commodities in 1926. The number of price series was almost doubled to 502 and more use was made of mail surveys of business firms in price collection. The (d) index produced on the price reference base 1926 = 100, was linked with the linked series using the link ratio for 1926.

The (e) index, for 1935 to 1975 (1935-39 = 100), incorporates the last official updating of the weighting system for the general wholesale price index. The concept of the weights was changed to 'gross' marketings, that is, no adjustments were made to earlier-stage full marketings of a commodity for quantities used in domestic production of other products. Weights were based on marketings of the period 1935 to 1939. The weighting system included commodity, sub-group and group weights. The number of price series in the index was increased to 604. Specifications of transactions for pricing were improved and the principal source of prices were industrial firms and government agencies with direct market contacts. The majority of prices were collected by mail monthly, as of the 15th of the month. The (e) index was linked to the preceding linked series (1867 to 1934) using the ratio of the new to former series at December 1934. This automatically placed the entire series 1867 to 1975 on the 1935-39 = 100 price reference base.

Since 1960 index content and weighting has remained largely unchanged from that described in the 1965 edition of this volume. No changes have been made in the relative weights of major groups (K35-39, K41-43) in the index. Within major groups some changes were effected directly or implicitly. In the non-ferrous metals group, series K41, the relative weight for gold was reduced substantially in the early 1970s based on changes in production of minerals since 1961. Also, with development of the Industry Selling Price Indexes for manufacturing indexes (see below, series K68-107) commodity price series based on expanded price samples in that system of indexes became available. Where such new commodity series were appropriate in terms of item content and internal weighting, they were introduced into the General Wholesale Price Index by linking at the commodity level. This was done within the major group 'Iron and its products' in the earlier 1970s and implicitly altered the relative weightings of commodity content within the major group. By weight, only about 10 per cent of the General Wholesale Price Index was affected by such substitution of industry indexes. Most substitutions of this type have occurred in more recent years so that by the end of 1977 perhaps up to one-third of the General Wholesale Index, by weight, was represented by Industry Selling Price Indexes.

The General Wholesale Price Index is a commodity classified index. It is 'general', covering a heterogeneous mix of transactions rendering it incapable of association with any well-defined value aggregate. Its principal characteristic is its long historical continuity, an attribute useful for long-term cycle analyses. Its usefulness for shorter-term current analyses is doubtful and for this purpose it is being superseded by other specifically-defined indexes, for example, Industry Selling Price Indexes and Construction Price Indexes.

Source: same as series K33-43.

These two series are merely regroupings of the major group indexes (K35-43) of the general wholesale price indexes described above, with grouping according to the two degrees of manufacturing specified in the column headings. Weights used in regrouping the indexes are those attached to component indexes in the general index, K34.

K46. Thirty industrial materials (price index), 1926 to 1975

Source: CANSIM, Matrix No. 131. Current indexes are published monthly in the monthly Industry Price Indexes, (Catalogue 62-011).

This index was included in the 1965 edition of this volume as series J72 (p. 285), for the period 1926 to 1960.

The series was introduced in a reference paper published in 1939 (Canadian Index Numbers of Industrial Material Prices, Catalogue 62-D-71). Its purpose is to provide early and frequent (week-by-week) statistical measurement of price behavior in markets for basic materials required as inputs by industry. It was and still is an unweighted geometric mean of the price relatives of 30 selected commodities. The original selection, based on intensive testing of volatility, sensitivity to changing economic conditions and importance to industries, included 18 commodities sensitive to economic changes and 12 which exhibited a more stable price behavior. The commodities selected are listed on page 21 of the above reference paper (Catalogue 62-D-71). Of the 30, five are food and 25 are manufacturing materials.

No change has been made in the commodities included since the original selection, though Industry Selling Price Indexes have been substituted for some individual commodity price series in recent years. Materials which have become important as industry inputs since World War II are not represented in the index, such as plastics and other modern synthetics. The index is currently published on a monthly basis. Component commodity index series are available on request from Statistics Canada.

Source: Historical Statistics of Canada, (1965 edition) for period 1890 to 1958 (except for noted revisions footnoted 'r'). CANSIM, Matrix No. 953, for period 1959 to 1974 and footnoted revisions in period 1926 to 1958. Industry Price Indexes, (Catalogue 62-011) for period 1971 to 1974 (1971 = 100). Current monthly indexes are published in the monthly Industry Price Indexes. (Note: current indexes are subject to revisions based on delayed declarations of interim and final payments on some products.)

These indexes measure price movements of Canadian farm products at 'Terminal' markets such as stockyards, creameries and processing plants. Prices may include transportation, storage and some handling and processing costs, depending on the terminal market at which a price transaction is recorded. These indexes differ from indexes of prices received by farmers 'at the farm gate', (see series M88, this edition, Section M, Agriculture) which reflect prices at the farm for more broadly defined commodities.

The indexes are presented here in three time segments, namely for (1) the period 1890 to 1934 (1913 = 100), (2) the period 1926 to 1974 (1935-39 = 100) and the period 1971 to 1974 (1971 = 100). Indexes for the first two periods are a repeat of those included in the 1965 edition, with extension of the 1935-39 = 100 index to 1974 in this edition. The new series on the new reference base 1971 = 100 is presented here for the first time.

The indexes for the time segment 1890 to 1934 (1913 = 100) are identical to those presented and described in the 1965 edition. They are composed of three linked period series covering the successive periods 1890 to 1913, 1913 to 1926 and 1926 to 1934, each period index being a weighted Laspeyres-type index with weights relating to the respective periods. Weights for the 1890 to 1913 period were quantities based on the average production of index commodities as reported in the decennial censuses of production for the years 1890, 1900 and 1910. For the 1913 to 1926 period indexes, commodity weights were based on total quantities marketed in 1913, and for the 1926 to 1934 period indexes, weights were quantities marketed in 1926. The three period-indexes were linked at 1913 and 1926 using link ratios of those years. A full description of the series 1890 to 1934 including construction methods was published in Wholesale Price Index Numbers of Canadian Farm Products, 1890 to 1933, (Catalogue 62-504). Prices in the indexes were for specified grades at specified markets. The number of price series employed increased from 24 in the 1890 to 1913 period to 33 in 1913 to 1926 and to 36 in the 1926 to 1934 period, representing price movements for 10 field and nine animal commodity items.

Indexes for the time segment 1926 to 1974 (1935-39 = 100) incorporate some footnoted revisions, mostly minor, of the figures published in the 1965 edition for 1926 to 1960. These series also are linked Laspeyres-type indexes, the above-described 1926 to 1934 period index being linked to updated 1935-39 = 100 based indexes covering the period 1935 to 1974 (Wholesale Price Index Numbers of Canadian Farm Products, (Catalogue 62-504, 1947). Weights in the new index were the average value of index quantities marketed over the five-year period 1935 to 1939, with regional weighting at the commodity and group levels within the total index. Seasonal fruits and vegetables were not included because of difficulties in obtaining prices which would be comparable through time. Price series used in the index numbered 86 of which 46 were for Eastern markets (17 field, 29 animal) and 40 for Western markets (14 field, 26 animal). This version of the series continued to 1974.

In 1975, the indexes were revised to a 1971 price reference and weight base. New weights were based on farm cash receipts of 1971, using data produced by the Agriculture Division, Statistics Canada, with regional and commodity group weighting being employed in calculation of the indexes. Over 90 per cent of farm cash receipts are represented in the new index. Major exclusions are sugar beets, seasonal fruits and vegetables, and maple and forest products. No reference source is yet available.

Export and Import Price Indexes (Series K56-67)

General note

Price indexes of exports and of imports are designed to measure the movements of prices of commodities in Canada's external merchandise trade. In addition to price indexes for total exports and total imports, indexes are produced for major classifications of commodity groups within the totals. Up to 1964, commodity groupings were in accord with tariff classifications of exports and imports. The classification system was then changed to the Trade of Canada Commodity Classification, (TCCC). Indexes based on the tariff classifications were terminated in 1964. Indexes classified according to the TCCC system have been extended back in time to 1960. Indexes for commodity classes within total exports and total imports presented in this edition cover the period 1960 to 1975 only and are those based on the TCCC system of classification.

A feature of export and import price indexes is the widespread use of 'unit value' series rather than 'specification price' series for individual commodities included in the indexes. A specification price series is a sequence of prices through time of a narrowly specified quantity and quality of a commodity, in which the quantity-quality dimension of the commodity is kept constant or equivalent throughout the series period. A unit value series is a sequence of unit values through time of a more broadly defined commodity, in which the mix of quantities and qualities of implicit specifications within it may vary from period to period. The movement of unit value series thus may reflect both price and quantity-quality changes, the quantity change effect being dependent on the homogeneity through time in the internal mix within the commodity class.

Until fairly recently, Canadian export and import indexes were based primarily on unit value series obtained from trade statistics of quantities and values for commodity classes. Progressive efforts were made to minimize the quantity changes implicit in such series, including the use of specification price series where these became available and were appropriate. In more recent years, the availability of computers has made more detailed examination of class content feasible with attendant improvement in unit values as proxies for specification prices.

The Export and Import Price Indexes presented in this edition and those presented in the 1965 edition are listed in the table below, including the periods covered in each edition and the price reference base periods. The dash (–) in columns (1) and (2) indicates the series is not included in the edition specified in the column heading.

For index number series of the 1965 edition not repeated herein, namely, J84-127 (except J108 and J118) and descriptions of them, readers are referred to Section J: Price Indexes (beginning page 281) in the 1965 edition.

Series No.			Period covered		Price reference period = 100
Current edition	1965 edition	Series title	Current edition	1965 edition	Current edition	1965 edition
–	J84-95	Export price indexes (Taylor)	–	1869-1915	–	1900
–	J96-107	Import price indexes (Taylor)	–	1869-1915	–	1900
		Export price indexes, 1913-1960
K56	J108-117	Panel A	1926-70	1926-60	1948	1948
–	J118-127	Panel B	–	1913-34	–	1913
		Import price indexes, 1913-1960
K62	J118-127	Panel A	1926-70	1926-60	1948	1948
–	J118-127	Panel B	–	1913-34	–	1913
New series
		Export price indexes, 1926-75
K56-61	–	Panel A	1968-75	–	1971	–
K57-61	–	Panel B	1960-70	–	1948	–
		Import price indexes, 1926-75
K62-67	–	Panel A	1968-75	–	1971	–
K61-67	–	Panel B	1960-70	–	1948	–

Source: Panel B: for series K56 and K62, for 1926 to 1959, Macmillan, Historical Statistics of Canada, 1965 edition, pp. 301-302; for series K56-61 and K62-67, for 1960 to 1970, files of External Trade Division, Statistics Canada.

Panel A: for series K56-61 and K62-67 for 1971 to 1975, Statistics Canada, The 1971-based price and volume indexes of Canada's external trade, (Catalogue 65-001, supplement, December 1976); for 1968 to 1970, files of External Trade Division, Statistics Canada. Current indexes are published in the monthly Summary of Foreign Trade, (Catalogue 65-001). See also CANSIM, Matrix No. 3716 for exports and Matrix No. 3681 for imports. Price indexes of the Paasche type also are available from 1971 onward (1971 = 100) and are published in current issues of the Summary of Foreign Trade. Readers please note that the Paasche indexes differ from the Laspeyres-type indexes included in this edition of Historical Statistics of Canada.

Panel B. The historical series, for 1926 to 1970 (1948 = 100), in Panel B, for total exports, series K56, and total imports, series K62, results from the linking of two period indexes, one for the period 1926 to 1945 (1935-39 = 100), the second covering the period 1946 to 1970 (1948 = 100). Each of the indexes is a fixed-weight index, with weights relating to the value of exports (imports for import indexes) in the 1935-39 and the 1948 periods respectively. Price relative series for selected tariff-classified commodities were based primarily on unit value series, although some were from price series of wholesale and retail price records in Canada and the United States. Individual price relatives were weighted by the percentage of their value, in the respective fixed-weight periods, to the total value of broader tariff groups to which they belonged. The group indexes were in turn weighted by their percentage value shares in total exports (imports). The 1926 to 1945 indexes were linked to the 1946 to 1970 indexes using the link ratio of the latter to the former in 1946. Series K57-61 and K63-67 were constructed for the five one-digit levels of the TCCC commodity classification system, by regrouping and reweighting (1948 percentage value weights) the price relative series of tariff-classified commodities. Users of the indexes should note the doubtful validity of series K56-61 for the war years 1941 to 1945, during which period the commodities entering Canada's actual external trade were not similar in pattern to those of the 1948 peace-time weight base period.

Panel A. New index numbers of prices in merchandise trade were first published in the Summary of External Trade, July 1975, with weighting diagrams relating to 1971 trade values and the price reference base 1971=100. The indexes have been extended back to 1968 and are classified by the TCCC system of commodity classification. A detailed outline of the nature of the indexes and methods underlying their construction is provided in The 1971-based price and volume indexes of Canada's external trade. Both Paasche (variable current year weights) and Laspeyres (fixed 1971 base year weights) indexes were developed. The Paasche price indexes, not presented herein, are published currently in the monthly Summary of Foreign Trade. The Laspeyres price indexes presented herein are available currently from the External Trade Division on request. In the new indexes, an updated and larger selection of elementary price relatives at the five-digit TCCC commodity class level were incorporated. For export indexes, unit value series were used for 57 per cent of the commodity classes (by value weight), specification price series for 29 per cent, while 14 per cent of the classes were not covered directly by price relative. For import indexes, unit value and specification price series were employed for 23 and 50 per cent, by weight, of the classes, with 27 per cent not directly covered. Most of the specification price series for exports were from the Industry Selling Price Indexes and were for 'end products, inedible', series K61. Those for imports were mostly from the U.S. Bureau of Labor Statistics wholesale price indexes and were mostly in 'end products, inedible', series K67. All non-Canadian indexes were adjusted for changes in exchange rates through time.

Short-term price indexes, with 1968 as the weight and price reference bases, were produced and published for the period 1967 to March 1975. The weighting reflects marked changes in trading patterns resulting from the 1965 automotive pact with the United States. These have not been included in this addition because of the short period covered and because the 1971-based indexes, with coverage from 1968, are the current continuing indexes. The 1968-based indexes are available on request from the External Trade Division, Statistics Canada.

A longer term price index series for 1956 to 1975 (1971 = 100) for total exports, series K56, and total imports, series K62, is presented in this edition in Section G: Balance of Payments. For advice on linking of series on export and import price indexes, to obtain longer term series, users may consult the External Trade Division.

Industry Selling Price Indexes (Series K68-107)

General note

A new system of industry-classified price indexes was introduced in January 1961 by Statistics Canada through publication of a set of indexes entitled Industry Selling Price Indexes, 1956-59, (Catalogue 62-515). For each of some 100 manufacturing industries, the indexes measure the movement of selling prices of shipments of commodities produced by the industry.

In the new system, each index relates uniquely to an individual industry as classified in the Standard Industrial Classification (S.I.C.) of industries. In the S.I.C., each business establishment in Canada is classified to one, and only one, industry at the finest level of classification of industries. The S.I.C. classification system is hierarchical, providing mutually exclusive groupings of lower level industry classes, at progressively higher levels. At the most aggregative level, manufacturing industries is one of 12 divisions of industries (in 1970). Within manufacturing, industries are divided into 20 major groups (two-digit level) each of which is subdivided again into three-digit and further for some into four-digit level classes of industry. Accordingly, at any given level of classification each manufacturing establishment is classified to one, and only one, industry.

Through use of the framework of the S.I.C., industry-classified price indexes can be specifically defined in scope and content. Further, they relate directly to important value aggregates of individual industry classes, for example, value of shipments, and are compatible in analytical uses with other major statistical series such as production, employment, man-hours and hourly earnings which also are classified by industry. Examples of analytical uses are studies of growth, productivity and employment. These indexes do not displace the previously available longer term series of commodity-classified wholesale price indexes. Rather, they provide differently classified price indexes for uses for which the commodity-classified indexes were not appropriate.

Industry-classified price indexes were not included in the 1965 edition. A table of indexes presented in this and the earlier edition, therefore, is omitted.

Source: Prices and Price Indexes, (Catalogue 62-002), various monthly issues, 1961 to 1975. CANSIM: Matrix No. 675 to 693, corresponding to S.I.C. major group industries 01 to 20, excluding S.I.C. group 11 (see Panel A of data table for series K69-87); Matrix No. 694 for series K68. Current indexes are published monthly in Industry Price Indexes, (Catalogue 62-011). Detailed accounts of concepts, scope, content and methods are given in: Industry Selling Price Indexes, 1956-59, (Catalogue 62-515), and Industry Selling Price Indexes, 1956-68, (Catalogue 62-528).

The indexes introduced in 1961 have been continued with periodic updating of weights and classifications. The historical series presented in this edition of this publication for the first time, are linked series of Laspeyres base-weighted price indexes relating to three successive time segments within the historical period of the linked series. The three time-segment indexes are the 1956-based indexes for the period 1956 to 1960, the 1961-based indexes for 1960 to 1970 and 1971-based indexes covering the period from 1971 forward. Weights used in the successive indexes were values of shipments of specific commodities of the industry: namely, shipments in 1958 for the 1956-based indexes, 1961 shipments for the 1961-based indexes, and 1971 shipment values for the 1971-based indexes. Pricing and calculation methods common to the indexes are discussed below, following an outline of the selection of industry indexes presented in the data tables as series K68-87 (Panel A) and series K88-107 (Panel B).

In Panel A, composite indexes are presented for major groups (two-digit level of industry classification) and for manufacturing industries (one-digit level). These are gross-weighted averages of industry indexes produced at the three-digit, and in some cases four-digit, level of industry classes. They are gross weighted in the sense that intra-industry shipments of commodities among industries within the class are included in the industry weights used in averaging. Gross weights thus overweigh the effect in major group indexes (K69-87), and in the composite for manufacturing industries (K68), of price movements of commodities shipped to other industries in the same group for use as inputs in production of their shipments. For example, price movements of raw sugar are reflected initially in selling prices of refiners and again in prices of shipments of confectionery manufacturers, soft drink producers and biscuit manufacturers, which are all classed to the major group 'food and beverage industries' (K69). Despite the seriousness of this duplication effect on composite gross-weighted price indexes, which is variable among industries, the advantages to users in having composites for higher level industry groups are deemed to outweigh it. It has not been possible yet to obtain preferable net weights for this purpose.

It will be noted that Panel A includes columns for major groups in which no composite indexes or indexes for only very short periods are presented. For these, indexes at lower levels of classification are presented in Panel B. As part of the column headings for major groups in Panel A the official group S.I.C. number is included. In Panel B, the first two digits in the S.I.C. number designate the major group to which the industry belongs, the next three, the three-digit industry class, and the final digit indicates the four-digit level of classification. If the final digit is '0', the industry is a three-digit level industry. Indexes have been shown at the highest level of aggregation for which they are available. They are available for some 100 industries at the third or fourth digit classification stage, by months, with annual indexes being simple averages of the monthly indexes.

The industry indexes are constructed initially for three-digit or four-digit industry classes, using gross shipment values as commodity weights within the index. At this level, establishments in the class are sufficiently homogeneous that gross weighting causes insignificant duplication of commodity price movements. Prices are selected for each industry by a multi-stage sampling process in which selection is made of commodities, then establishments and finally detailed specifications of transactions for which price quotations are collected monthly as of the 15th of the month. Sampling is by purposive rather than random selection at each stage. Prices are prices for new orders, free on board manufacturing plant, net of quantity or trade discounts, subsidies, federal sales and excise taxes applicable at the manufacturers level. The specification price relative series developed from the prices so collected are averaged to successively higher composite price indexes through reverse stages of the sampling process, using relative shipment values as weights at each stage. The resulting commodity indexes are then averaged to yield the industry indexes. Weights are obtained from the censuses of manufacturers for the base-weight periods specified above.

Particular attention is given to the comparability of prices through time for each specification priced. Where a specification must be changed because quotations no longer can be obtained for it or because a substitute specification has become more important in current shipments, a range of techniques is employed to adjust the new price to maintain a constant or equivalent quantity-quality dimension for the price relative series.

A reference paper detailing scope and methods in the 1971-based updating of the indexes is in preparation for early publication.

Construction Price Indexes (Series K108-159)

General note

A number of price indexes relating to construction and capital expenditures in Canada have been developed since 1960 and are presented in this publication for the first time. In the 1965 edition, only three indexes relating to construction were included, namely a building and construction materials index (J68), a residential building materials price index (J73) and a non-residential building materials price index (J74). Indexes J73 and J74 are continued and extended to 1975 in the current edition as series K137 and K140 respectively. Index J68 is not repeated herein.

The delayed development of price indexes for capital goods is the result of serious difficulty in obtaining comparable prices through time. Capital goods tend to be unique, custom-designed products and capital entities are in turn unique combinations of structures and installed machinery and equipment. Seldom are identical facilities constructed in successive time periods and, correspondingly, it is seldom possible to observe prices in successive time periods for even closely similar capital facilities. The pricing difficulty persists for the components of such facilities insofar as they are not standard, repetitively produced components. Accordingly, price indexes of construction and capital expenditures so far developed are primarily composite-weighted averages of market prices of specified inputs into construction of buildings and structures, market prices of standard items of machinery and equipment, and 'model prices' of non-standard machinery and equipment. A major exception to this generality is the highway construction price indexes series (K150-159) in which 'in-place prices' of components are employed.

'In-place prices' are prices of identifiable units of work completed and in place. For such units of work, (for example, a specified quantity of gravel of specified size put in place on a highway of specified type), costs of all inputs such as materials, labour, construction machinery used, and contractors overheads and profits, and the effects of productivity changes through time on the total cost are included in the in-place price. This contrasts with composite prices of inputs per se in which profit margins and productivity-change effects are excluded.

'Model prices' are prices of specified models of machinery and equipment. In this technique of pricing, detailed specifications of models are drawn up after consultation with purchasers and manufacturers. Manufacturers then price the models annually as though they were tendering bid prices on contracts, having regard for changing input costs, profit margins and productivity in their manufacturing operations.

Construction price indexes presented in this edition and those presented in the 1965 edition are listed in the table below, including the periods covered in each edition and the price reference base periods. The dash (–) in columns (1) and (2) indicates the series is not included in the edition specified in the column heading.

Source: 'Construction Union Wage Rates and Indexes, 1971=100', insert in Construction Price Statistics, October 1976, (Catalogue 62-007), for period 1971 to 1975. Files of Capital Expenditure Section, Prices Division, for period 1950 to 1970. CANSIM: Matrix No. 961. Current indexes are published in Construction Price Statistics, monthly bulletin, (Catalogue 62-007) and quarterly report, (Catalogue 62-008).

Series No.			Period covered		Price reference period = 100
Current edition	1965 edition	Series title	Current edition	1965 edition	Current edition	1965 edition
–	J68	Wholesale price indexes, classified according to purpose	–	1890-1948	–	1926
K137 K140	J73 J74	Wholesale price indexes, classified by residential and non-residential building materials	1926-75 1935-75	1926-60 1935-60	1971 1971	1935-39 1949
New series
K108-135	–	Union wage rate indexes for major construction trades in major cities	1950-75	–	1971	–
K136-141	–	Building construction input price indexes	1926-75	–	1971	–
K142-144	–	Construction machinery and equipment price indexes	1951-75	–	1968
K145-149	–	Electric utility construction price indexes	1956-75	–	1971
K150-159	–	Highway construction price indexes	1956-75	–	1971

The indexes of union wage rates are designed to measure the effect of collective labour agreements and changes in them on union basic wage rates and selected pay supplements of major construction tradesmen in major metropolitan areas in Canada. The indexes do not reflect changes in non-union wage rates, nor the effects of union rate changes in non-metropolitan areas. For basic union wage rates, composite indexes are presented here for each trade (K110-121) for each city (K122-135) and for the overall trade and city aggregate (K109) for the period 1950 to 1975. In addition, a composite for the trade-city aggregate is provided including combined wage rates and selected pay supplements (K108). The indexes measure changes through time. They do not measure differences in levels of wage rates among trades or among locations.

The historical series is composed of linked Laspeyres-type indexes in which the indexes for the period 1961 to 1970 (1961 = 100) with 1961 weights have been linked to 1971-weighted indexes covering the period 1971 to 1975 (1971 = 100). Weights for each trade in each city in the two period indexes were based on census of population data on occupations in 1961 and 1971 respectively, namely, numbers employed by trade and average earnings for construction by province. The indexes were extended backward to cover the period 1950 to 1960 in a special study for the Economic Council of Canada based on data in files of the Prices Division, Statistics Canada.

Rates in the indexes are mainly for the journeyman class for each construction trade and in later periods were derived primarily from the Canadian Construction Association (CCA) publication Construction Collective Agreement Survey Service, an assembly of collective agreements. In earlier periods, the CCA records were supplemented by rate collections of the federal Department of Labour and information from local unions and contractors. Basic union rates used are straight-time hourly compensation. The selected pay supplements included in K108 are payments explicitly stated in contracts as cents-per-hour items or as a percentage of the basic wage rates. They cover vacation pay, statutory holiday pay, pension contributions (employer's contribution to private plans), health and welfare (employer's contribution) and employer's contribution to the industry promotion fund and training fund. In 1971, the number of trades included was expanded to 16 and the numbers of metropolitan areas to 22.

Indexes and rates in dollar terms, with and without pay supplements are available and are published for each trade in each metropolitan area, as well as composites (averages) for the total trades, the total cities and the combined trades and cities in the indexes.

Full descriptions of the indexes are provided in the following source documents: Construction Price Statistics, service bulletin, (Catalogue 62-006), vol. 1, No. 2, 'Basic Union Wage Rates and Indexes for Major Construction Trades and Selected Canadian Cities, 1961 = 100'; vol. 1, No. 5, 'Basic Union Wage Rate Indexes and Indexes Including Selected Pay Supplements, for Major Construction Trades and Specified Cities, 1961 to 1971 Annually, 1961 = 100'; and Construction Price Statistics, monthly bulletin, (Catalogue 62-007), October 1976, 'Construction Union Wage Rates, 1971 = 100'.

Source: CANSIM: Matrix No. 3781 for series K136-138 (residential) for period 1926 to 1975; Matrix No. 967 for series K139-141 (non-residential) for period 1935 to 1975. Current indexes are published in Construction Price Statistics, monthly bulletin, (Catalogue 62-007) and Construction Price Statistics, quarterly report, (Catalogue 62-008).

In this set of price indexes, the series for building materials, K137 (residential) and K140 (non-residential), are a continuation of the series J73 and J74 respectively presented previously in the 1965 edition of this publication for the period 1926 to 1960. In the current edition, these have been updated and extended to 1975 and placed on a 1971 = 100 price reference period. The materials indexes are presented here alongside corresponding labour wage rate series (K138 and K141) in the framework of inputs into residential and non-residential building construction, and composites of the labour and materials indexes are provided for each of the two categories of construction. Annual indexes for earlier periods are available back to 1890 on request to the Prices Division, Statistics Canada.

The indexes measure the effect of changes in materials prices and labour wage rates on the cost of specified baskets of inputs in building construction. The historical series are linked series of component and composite Laspeyres-type indexes covering separate but successive periods in the longer run series. The nature of the successive period-indexes are described below separately for the residential series (K136-138) and the non-residential series (K139-141).

It should be stressed that the indexes do not measure the effect of price changes on the costs of construction of completed buildings. Some input costs are not covered by the indexes, for example, capital inputs of machinery and equipment used in construction. Further, no account is taken of changes in productivity in construction or of changes in profit margins of contractors.

K136-138. Residential building construction input price indexes, 1926 to 1975

The price index series for residential materials (K137) is composed of three period-indexes covering the time periods 1926 to 1960, 1961 to 1970 and 1971 to 1975. Each period-index is of the Laspeyres-type employing fixed weights over the index period. In the 1926 to 1960 index, the item content and weights are based on 'units of material requirements valued at 1946 prices for the national housing target of that year'. Prices for materials in the index are, where possible, selling prices to large contractors, free on board site, but wholesale prices are used in many cases. The 90 commodity price series are weighted into nine commodity group indexes, with regional weights and prices used within groups where feasible. A full description is given in Price Index Numbers of Residential Building Materials, 1926 to 1948 (1935-39=100), (Catalogue 62-505). For the 1961 to 1970 period-index the nine commodity group weights are unchanged from those of the preceding index. Within groups, however, the commodity content is updated to reflect building materials in use since 1961. Also, price series from the industry selling price indexes, with addition of federal sales taxes where applicable, are substituted extensively for previously used wholesale prices (Prices and Price Indexes, May 1970, Catalogue 62-002).

The index for the period 1971 to 1975 incorporates major revisions of the target group, that is, the type of residential construction represented in the index, the commodity content and weighting and the classification structure within it ("Residential Building Construction Input Price Indexes, 1971 = 100', Construction Price Statistics, service bulletin, Catalogue 62-006, vol. 1, No. 7). The target group is restricted to single-detached units of residential construction. New weights are based on a 1969 survey by Central Mortgage and Housing Corporation of materials used in residential construction in Canada and a 1971 cost study, yielding unit material requirements valued at 1971 costs for each construction trade activity in each major city. Prices from the industry selling price indexes collection are employed with adjustment for federal sales tax. Price indexes are calculated for a variety of composites as weighted averages of detailed materials price series, for example, regional indexes, indexes for major construction activities, as well as for total materials.

The wage rate index series for residential construction labour inputs (K138) results from the linking of two period-indexes, one for the period 1926 to 1970, the other covering the period 1971 to 1975. The 1935 to 1970 index is based on wage rates data collected by the federal Department of Labour in annual surveys of fair wage rates from employers of construction trades in selected cities across Canada. Rates incorporated in the index are base rates excluding fringe benefits, representing minimum rates in federal government contracts, for eight construction trades. The composite wage rate index is computed as an average of the trades indexes, using relative weights provided by the Department of Labour, based on materials and labour requirements in some 100 buildings, surveyed after World War II. Two trades, namely, labourers and carpenters, constitute 76 per cent, by weight, of the index. The second period-index for 1971 to 1975, incorporates a major revision of content, weights, and wage rate series, along with internal classification by trade and location as for the materials index (above). Rates used in the new index are basic union wage rates (see outline for series K108-135 above) for specific trades in residential building construction in major cities. Weights are labour requirements in 1969 valued at 1971 costs for each of specified construction activities in each major city, based on Central Mortgage and Housing Corporation studies. The weighted average of the city-trade indexes are linked to the 1926 to 1970 index at January 1971 to form the linked historical series.

The total (or composite) price index of residential building construction inputs (K136) was published as an official series for the first time in Prices and Price Indexes, May 1970, (Catalogue 62-002). Weights used to combine the 1926 to 1970 period materials and labour components are 62.5 and 37.5 per cent respectively and are based on the previously indicated surveys of residential construction conducted after the World War II. The materials and labour weights in the 1971 to 1975 index are 64.1 and 35.9 per cent.

Because of the major change in the classifications used in the indexes from 1971 forward, the longer term historical series is currently being continued for only total materials, total labour and their composite.

K139-141. Non-residential building construction input price indexes, 1935 to 1975

The series for non-residential materials (K140) is a linked series of three period-indexes covering the successive periods 1935 to 1960, 1961 to 1970 and 1971 to 1975. The materials item content and weights in the 1935 to 1960 index are based on cost data for a sample of 99 buildings constructed during the 1948 to 1950 period. Prices in the index are on-site prices paid by contractors or, where these were not available, manufacturers' or wholesale distributors' prices. A Laspeyres formula employing relative value weights is used to combine relative price series (1949=100) into weighted average indexes for 12 materials groups which in turn are averaged in calculating the total materials index (Non-Residential Building Materials Price Index, 1935-1952, Catalogue 62-506). Group weights are retained unchanged in the 1961 to 1970 index. Within groups, however, the item content and weights are modified to reflect materials important in non-residential building in the 1960s. Producers selling prices with adjustment for federal sales taxes as applicable are incorporated extensively as replacements for previously used wholesale and distributor prices (Prices and Price Indexes, Catalogue 62-002, May 1970). In the 1971 to 1975 index, item content and weights have been updated, based on analysis of three typical classes of non-residential buildings in four major cities valued at 1971 costs, and a major restructuring of material detail and sub-indexes is incorporated with classification by construction trade activity within metropolitan areas across Canada. The price series used are selling prices of building material producers and manufacturers from the industry selling price collection. The historical series is continued for total materials only by linking at January 1971, with 1971 = 100 as the reference base. No reference paper on the 1971 to 1975 index has been published as yet.

The index for labour wage rates in non-residential building construction is a linked series of two period-indexes, one for the period 1935 to 1970, the other for 1971 to 1975. The 1935 to 1970 index is the index used for the residential building inputs as outlined above (see the relevant paragraph under K136-138). In the 1971 to 1975 index, a major restructuring of index content with labour input classification by trade within construction trade activity, within metropolitan areas, is introduced. Previously used fair wage rates are replaced by basic union wage rates (see K108-135 above, paragraph 2). Base weights by trade within cities are derived from the above mentioned analysis of typical non-residential buildings in terms of 1971 costs. The index is a weighted average of trade-city rates, calculated at successive stages of aggregation of the rate series.

The total non-residential building input price index (K139) was first published in the May 1970 issue of Prices and Price Indexes, as a weighted average of the materials and labour indexes. Weights in the 1935 to 1970 period index were 65 and 35 per cent for materials and labour respectively. These were modified for the 1971 to 1975 period based on materials/labour statistics from Construction in Canada, (Catalogue 64-201). The indexes do not relate to engineering construction nor do they represent prices of completed buildings.

The historical series is being continued currently for only total materials, total labour and their composite.

Source: CANSIM: Matrix No. 84 for annual indexes, Matrix No. 1787 for monthly indexes. Prices and Price Indexes, June 1971, (Catalogue 62-002) for annual indexes from 1961 to 1970. Construction Price Statistics, quarterly report, (Catalogue 62-008), various issues for annual indexes from 1970 to 1975. Current indexes are published in Construction Price Statistics, quarterly report, (Catalogue 62-008).

The indexes measure the movements of prices in Canada of a fixed basket of machinery and equipment used in construction, representing annual expenditures for such capital goods of contractors classified to the construction industry. The index is the first in a planned program of development of industry-classified price indexes relating to gross capital additions of machinery and equipment. Prices used in the index are primarily manufacturers' selling prices, both Canadian and United States, with adjustment for import duties and federal sales tax as applicable. These are employed as proxies for theoretically preferred purchase prices of contractors, and their movements are expected to approximate movements of purchase prices with reasonable validity.

Prices are for specified quantities and qualities including terms of sale, and adjustments are incorporated for changed specifications when they, of necessity, are introduced. Indexes of manufacturers' selling prices produced by the U.S. Bureau of Labor Statistics for machinery and equipment of a kind related to Canadian imports are incorporated in the import component of the Canadian index where appropriate, with adjustments for duties and sales tax.

Fifteen types of machinery and equipment are priced for the index. Two types, namely, crawler tractors and front end loaders (wheeled), constitute 50.1 per cent by weight, the former being entirely imports, the latter of both domestic and import origin (U.S.). Relative value weights for each type are based on data from Census of Merchandising surveys of 1967 and 1969 supplemented by statistics on imports in those years. The item content and weighting diagrams are recorded in Prices and Price Indexes, June 1971, (Catalogue 62-002). The indexes are calculated using the base-weighted Laspeyres formula with relative value weights.

Source: CANSIM: Matrix No. 118 for annual indexes for series K145-149. Construction Price Statistics, quarterly report, (Catalogue 62-008), third quarter, 1977 for period 1971 to 1975 for K145-148 and for the period 1966 to 1975 for K149. Current indexes are published in detail in the above quarterly report (Catalogue 62-008) and in summary form in Construction Price Statistics, monthly bulletin, (Catalogue 62-007).

The price indexes of electric utility construction are designed to measure the effect of price change on the cost of constructing and equipping electric generating, transforming, transmission and distribution facilities. Indexes for distribution systems, transmission lines, and for transformation and switching stations were the first to be developed. A full description of them respecting concept, scope, methods, uses and limitations accompanied the release of annual indexes of each (K145, 146 and 147) for the period 1956 to 1965 in Price Indexes of Electric Utility Construction, 1956-1965, (Catalogue 62-526). Indexes for hydroelectric generating stations (K148) were published initially for the period 1961 to 1970 with similar full description in Construction Price Indexes for Hydro-Electric Generating Stations, 1961-1970, 1961 = 100, (Catalogue 62-533). The series for fossil fuel fired steam generating stations (K149), the most recent development in the set was released with full description in June 1976 in Construction Price Index for Steam-Electric Generating Stations (Fossil Fuel Fired) 1971 = 100, as an insert in Construction Price Statistics, monthly bulletin, May 1976, (Catalogue 62-007).

Electric utility facilities are unique, custom-designed combinations of structures, machinery and equipment. The price indexes for them are, of necessity, base-weighted Laspeyres-type composites of price series for machinery and equipment components installed in them and for inputs employed in construction of the structures and in installation of the equipment. Through surveys undertaken by Statistics Canada in collaboration with the Canadian Electrical Association covering major electric utility capital projects over a number of years, the item content and weights of items in each of the five categories of indexes (K145-149) are established at the level of detail at which price series comparable through time are obtainable.

A wide range of price series sources are tapped, through utilizing existing collections as well as initiating new series. For standard, repetitively produced items of materials, machinery and equipment, price series are drawn from existing industry selling prices and wholesale price series, with adjustment for applicable sales taxes, and new series are collected from manufacturers where existing ones are not sufficiently appropriate. Price series for selected models of non-standard more complex equipment such as generators, turbines, feedwater heaters and pumps and condensers, supplement the standard item coverage of equipment. For labour inputs, sub-indexes from the union wage rate series (K108-135, above) are used for contract construction work, and wage rates reported by utilities for own-account construction items. Salary series from the federal Pay Research Bureau are employed for overhead inputs, and average hourly earnings series from Statistics Canada, where wage rate series are not available, for labour in-shop fabrication, field erection and construction camp operation. A number of in-place price series from the highway construction price indexes (K150-159, below) are employed, namely, the clearing, excavation and grading sub-indexes. Price indexes from foreign countries also have been incorporated in the indexes where imports of standard goods are appreciable, with adjustment for exchange, duty and federal sales tax changes. This broad outline does not exhaust the sources or the price series.

The item content and weights and the type and source of price series for items are detailed in the above-cited descriptive publications for each of the five series. Since introduction of the indexes, improvements in the price series have been introduced. Also, for the series K145-147, for the period 1971 to 1975, the content of the indexes is revised to include construction indirects (engineering, head office and administrative expenses), interest cost during construction, for K146 and K147, and initial grading and clearing costs for series K146. Weights also are updated, and more in-place pricing has been introduced in K146 and K147. A published account of this updating has not been issued. The historical series for K145-147 are linked Laspeyres-type indexes, the indexes to 1970 being linked to the indexes of the period 1971 to 1975. The series K148 is the original base-weighted index converted arithmetically to 1971 = 100. Series K149 is the base-weighted series produced originally on the reference base 1971 = 100.

Users should realize that the indexes are not indexes of either purchase prices or selling prices of electric utility capital plant and equipment. Indexes for many items of equipment within the indexes are purchase price indexes, or close to it, while those for structures are basically input price indexes which do not reflect changes in profit margins or productivity in construction.

Source: CANSIM: Matrix No. 120. Also, Construction Price Statistics, quarterly report, third quarter, 1977, (Catalogue 62-008). Current indexes are published in Construction Price Statistics, monthly bulletin, (Catalogue 62-007), in summary form and in Construction Price Statistics, quarterly report, (Catalogue 62-008) in full detail.

These price indexes measure the movements of prices paid by provincial governments for a constant or equivalent program of highway construction represented by contracts awarded by the respective governments in a specified period for new construction, reconstruction and betterment work of arterial and secondary highways. Excluded from the program (basket) are bridge work and routine maintenance and repair. Prices used in the indexes are contractors' bid prices for units of completed-work-in-place, for example, an acre of clearing, a cubic yard of excavation, a ton of gravel put in place, a ton of hot mix bituminous paving in place, and prices paid by provincial governments for materials supplied by them to the contractor. Accordingly, the indexes may be described as contractors' selling price indexes. The historical series are linked Laspeyres-type indexes, with indexes for the period up to 1970 linked to those for the period 1971 to 1975.

Indexes for seven provinces were introduced initially in 1961 and a full description of them was published in Price Indexes of Highway Construction in Canada, base-weighted and current-weighted, 1956 = 100, (Catalogue 62-520), September 1962. Items and their weights in the indexes were derived from highway construction contracts valued at $50,000 or more awarded by the respective provincial governments over the 1956 to 1959 fiscal years. In such contracts, detailed units of construction work to be completed on an in-place basis are listed by the provincial government, and for each such unit the quantity, bid price and total cost is required to be recorded by the contractor in tendering for the contract. The quantities, prices and values of materials supplied by the governments to contractors for each unit of work in each contract are included. Bid prices for each of the in-place units so established were calculated as averages of bid prices in finely stratified classes of contracts. Factors such as size of contract, the location of the road, the type of material to be graded (earth, rock) or placed, cause prices to vary among contracts within a period and between periods, representing a difference in the quantity-quality of the units of work to which the prices relate. To minimize such quantity effects, contracts are stratified to ensure average prices within classes relate through time to basically constant quantity-quality unit of in-place work.

The indexes were revised for the entire period 1956 to 1966 as described in Prices and Price Indexes, December 1967, (Catalogue 62-002). The revision introduced additional refinements in the stratification of contracts to improve the comparability of bid price averages through time at the item level. Weights in the indexes for Ontario and British Columbia were updated to 1964 (valued in 1956 prices) but were unchanged for the other five provinces. The short-term index for contracted federal government highways was dropped, and the composite index correspondingly was modified. The price reference base 1956 = 100 was retained.

An annual index for the province of Quebec for the period 1964 to 1969 (1964 = 100) was introduced and described in Prices and Price Indexes, March 1971. Concepts, scope and methods were essentially the same as in the other provincial indexes. The item content and weights were based on contracts awarded over the fiscal years 1964 to 1967 with revaluation in terms of 1964 prices.

Indexes for the period 1971 to 1975 are based on updated item content and weights derived from highway construction contracts valued at $25,000 or more awarded by provincial governments during the fiscal years 1970 to 1972. Annual indexes for the province of Alberta also are presented for this period. Weights for combining provincial indexes into the composite average are based on expenditure data on contract highway construction in the censuses of construction, 1970 to 1972. A description of the indexes for this period, including detailed weighting diagrams, is provided in Highway Construction Price Indexes, 1971 = 100, as an insert in Construction Price Statistics, monthly bulletin, March 1977, (Catalogue 62-007). Up to two dozen items of units of in-place work and supplies are shown in the weighting diagrams. These are grouped into three major components of highway construction, namely, grading, granular base course, and paving. Indexes are published currently at the all-item, major component and item levels.

Implicit Price Indexes of Gross Fixed Capital Stocks (Series K160-171)

General note

Price indexes of fixed capital stocks are presented in this publication for the first time in the current edition. No price indexes of capital stock were included in the 1965 edition.

The price indexes are termed implicit because they are derived indirectly as the percentage ratio of two value series, namely, the time series of annual current-dollar value of fixed stocks and the corresponding annual constant-dollar value series. Movements through time in the current-dollar series (>= p_nq_n) result from both price and quantity changes, whereas movements in the constant-dollar series (>= p_oq_n) result theoretically from quantity change only. The annual ratios between the two series thus implicitly reflect the price movements embedded in the current-dollar value series.

Algebraically, the implicit price indexes may be written

in which the p's and q's denote prices and quantities respectively and the subscripts '_o' and the price reference base year and any given year respectively. The symbol >= indicates summation over the items included in the aggregate. The index (Ip) is a Paasche price index, the superscript denoting Paasche. In this current-weighted index, the weights (q_n) are the quantities of the given year and these are different for different given years. Thus, while the movement of this index between the base reference year '_o' and any given year results from price change only, index movements between any other years in the series result from price change and some quantity changes. This contrasts with the Laspeyres base-weighted price index (described earlier in this section) in which price index movements throughout the series arise from price change only because quantities (the basket) are kept constant.

A principal favourable attribute of the Paasche price index is that its use in deflation of value indexes yields Laspeyres quantity indexes. Again algebraically, in ratio form,

in which the first ratio (index) is the value series, the second is the Paasche price index and the term on the right is the Laspeyres quantity index. For many uses, it is the Laspeyres quantity index that is appropriate, for example, in studies of productivity and growth. In these uses, however, it is often the constant-dollar series itself (>= p_oq_n) which is most useful and it can be derived directly by deflating (dividing) the current-dollar series by the price index, thus

from this it is obvious that the price index is implicitly derivable given the current- and constant-dollar series.

Unfortunately, in practice, Paasche price indexes are seldom available and Laspeyres base-weighted price indexes are used. However, the deflation is carried out at as low a level of components of an aggregate as possible. The resulting constant-dollar values of the components are then summed in each period (a year, say) to higher levels of aggregations. The implicit price indexes derived by dividing the current-dollar series by the resultant constant-dollar series are (1) Laspeyres price indexes at the component level at which the initial deflation was carried out and (2) quasi Paasche-type price indexes at the higher levels of aggregation. In the higher level indexes, the components are weighted implicitly by the relative current values of the components. In this sense they are partly base-weighted and partly current- weighted and, therefore, termed quasi Paasche price indexes.

Source: for 1926 to 1975, Fixed Capital Flows and Stocks, 1926-1978, (Catalogue 13-568). In addition to the implicit price indexes, this occasional publication includes the current- and constant-dollar capital stock series and the basic price indexes used in their derivation. Current indexes are available from the Construction Division, Statistics Canada, on request.

Price indexes of gross fixed capital stocks are presented for major classes of stocks, namely, building construction, engineering construction, and machinery and equipment, and for total stocks, within each of manufacturing industries, non-manufacturing industries and total industries categories in the Standard Industrial Classification. They are implicit price indexes calculated as percentage ratios of the current-dollar value to the constant-dollar value, annually, of gross fixed capital stocks at mid-year.

The current- and constant-dollar value series cover fixed tangible capital stocks produced by human effort. They exclude natural resources. The constant-dollar gross stock value series is derived on the basis of the 'perpetual inventory' method. In this method, the annual gross additions to stock (gross capital formation) for each detailed type of stock are revalued in prices of a selected price-base year. The revalued annual additions are then cumulated annually over time with deduction from the cumulative total in each year of previous additions whose estimated lifespans have expired. In the gross stock series no deductions are made for gradual depreciation, only the deduction for complete discard at the end of the expected life of the asset. The series by type of stock within industry groups are then summed to higher levels of aggregation.

The current-dollar series is derived from the constant-dollar series by inflating the latter to prices of the respective current years, using price indexes at the lowest component level possible within the series. The resulting annual current-dollar series for detailed components may then be summed to desired higher classes of aggregates.

The price indexes employed in deflation are primarily period price indexes of the Laspeyres base-weighted type. For construction, these deflators are primarily input indexes of materials and labour with weighting appropriate to types of structures, and deflation is undertaken at the level of type of structure. No adjustment is made for changes in profit margins (including the return to capital used in construction) or productivity in construction. In more recent periods, available in-place price indexes have been incorporated in the deflators. For machinery and equipment the deflators tend more to be output price indexes, particularly in more recent years. The historical series of constant-dollar values is a linked series, each segment of which is deflated by price indexes with price reference bases appropriate to the respective time segments.

The basic source document on methods used in fixed capital stock estimating is Fixed Capital Flows and Stocks, Manufacturing, Canada, 1926-1960: Methodology, (Catalogue 13-522). Historical series of both current- and constant-dollar values, annually, may be obtained from CANSIM, by industry and industry groups. The Matrix numbers for each industry and group are specified in table 3, page XV of Fixed Capital Flows and Stocks, (Catalogue 13-211). See also the descriptive text and historical series F183-224 in this publication.

Implicit Price Indexes of Gross National Expenditures (Series K172-183)

General note

For a discussion of the concept, interpretation and methods in principle for 'implicit' price indexes, see the general note for series K160-171 above.

The series K172-183 presented in this edition correspond precisely to series J153-164 in the 1965 edition. They have been extended in time to cover the period 1926 to 1975 and have been placed on a 1971 = 100 price reference base. In the 1965 edition the reference base is 1949 = 100. Also, for series K176 and K177, the series is extended back from 1949 to 1926 in the current edition.

Source: CANSIM: Matrix No. 529, except for K173 and K175 (the latter two from files of National Income and Expenditure Division, Statistics Canada). Current indexes are published in National Income and Expenditure Accounts, (Catalogue 13-001), quarterly and (Catalogue 13-201) annually.

These indexes are derived as percentage ratios of annual current-dollar values and constant-dollar values (1971 dol-lars) of the respective categories of gross national expendi-tures in Canada. The concepts, scope and content of these two value series and the methods employed in constructing them are outlined elsewhere in this publication (see the descriptive text and tables for series E14-32 and E33-35).

The constant-dollar series (E33-35) is based on deflation of the current-dollar series using primarily Laspeyres base-weighted price indexes at detailed disaggregated component levels of expenditure. Deflation is done separately for five successive time segments of the historical series, the deflators and the resulting constant-dollar series for each segment having different price reference bases appropriate to the respective periods. These are arithmetically linked to form the historical constant-dollar value series. The implicit price indexes are then computed for each year by dividing the current-dollar series by the constant-dollar series (and multiplying by 100) at each level of aggregation for which a price index is required. The resulting historical series of price indexes may be said to be composed of the following time-segment price indexes: 1920 to 1946, 1947 to 1955, 1956 to 1960, 1961 to 1970 and 1971 to 1975.

A feature of the deflators used for non-residential construction (K180) since 1949 is an annual adjustment of the price indexes of material and labour inputs for estimated rates of change in labour productivity in construction. Similar adjustment is made to the input deflators for residential construction (K179) for the period 1949 to 1970, while for the period 1971 forward direct valuations in terms of 1971 dollars are employed. The implicit indexes for these two series can be expected to move differently from the building construction input price indexes recorded previously (above) as series K136 and K139.

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