Analysis
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The Consumer Price Index (CPI) rose 1.6% in the 12 months to December, after increasing 1.4% in November.
Excluding gasoline, the CPI rose 1.9% year over year in December, matching the increase in November.
12-month change in the major components
Prices were up in all eight major components on a year-over-year basis in December, with the food and shelter indexes contributing the most to the rise in the CPI. The transportation index, which includes gasoline, registered its first year-over-year increase since October 2014.
Consumers paid 3.7% more for food in December compared with the same month a year earlier. Prices for food purchased from stores were up 4.1% year over year in December, following a 3.7% increase the previous month. The acceleration was mainly attributable to the fresh vegetables and fresh fruit indexes, which rose more on a year-over-year basis in December than in the previous month. In contrast, the meat index increased less in the 12 months to December (+2.4%) than in November (+3.9%). Prices for food purchased from restaurants rose 2.8% year over year in December, matching the increase in November.
The transportation index was up 0.6% on a year-over-year basis in December, after recording 13 consecutive year-over-year declines. This turnaround was mainly attributable to the gasoline index, which registered a smaller year-over-year decrease in December (-4.8%) than in November (-10.6%). In addition, the purchase of passenger vehicles index rose 3.1% year over year in December, following a 1.9% increase the previous month.
The clothing and footwear index was up 0.7% year over year in December, after rising 2.1% in November. The men’s clothing index registered a smaller year-over-year increase in December than in November, while prices for women’s clothing declined in the 12 months to December, after increasing in November.
12-month change in the provinces
Consumer prices rose in all provinces in the 12 months to December, with British Columbia posting the largest gain. In the Prairie provinces, consumer prices were up less on a year-over-year basis in December than in November.
The CPI in British Columbia was up 1.9% year over year in December, after increasing 1.7% in November. This acceleration was led by the gasoline index, which posted its first year-over-year gain (+4.4%) since June 2014. The traveller accommodation index was also up more on a year-over-year basis in December (+9.6%) than in November (+8.4%).
In Ontario, the CPI rose 1.7% on a year-over-year basis in December, the largest gain since December 2014. Electricity prices increased 8.9% in December compared with the same month a year earlier, partly as a result of new winter electricity prices introduced in November 2015. In addition, the purchase of passenger vehicles index was up 2.8% year over year in December, after increasing 1.3% the previous month.
The CPI in Alberta was up 1.5% in the 12 months to December, after increasing 2.0% in November. This deceleration was mainly attributable to the natural gas index, which was down more on a year-over-year basis in December (-14.5%) than in November (-8.0%).
Seasonally adjusted monthly Consumer Price Index increases
On a seasonally adjusted monthly basis, the CPI was up 0.1% in December, after rising 0.2% in November.
In December, four of the eight major components increased on a seasonally adjusted monthly basis, three decreased, while the recreation, education and reading index posted no change.
On a seasonally adjusted monthly basis, the largest increase in December was recorded in the food index (+0.6%), while the clothing and footwear index (-0.9%) posted the largest decline.
Non-seasonally adjusted monthly Consumer Price Index decreases
On a monthly basis and before seasonal adjustment, the CPI declined 0.5% in December, after decreasing 0.1% in November.
Consumer prices were down in all the provinces, with Manitoba (-1.0%) posting the largest decrease.
Bank of Canada’s core index
The Bank of Canada’s core index was up 1.9% in the 12 months to December, following a 2.0% rise in November.
On a monthly basis and before seasonal adjustment, the core index fell 0.4% in December, after decreasing 0.3% in November.
The seasonally adjusted core index was up 0.1% on a monthly basis in December, matching the increase in November.
Annual Review of the 2015 Consumer Price Index
In 2015, the annual average increase in the CPI was 1.1%. This increase followed gains of 2.0% in 2014 and 0.9% in 2013.
Decreases in gasoline prices contribute to slower growth in consumer prices in 2015
On an annual average basis, consumers paid 16.5% less for gasoline than they did the previous year, marking the largest annual average decrease in the gasoline index since 2009. The decline in the gasoline index followed price increases in 2014 (+0.2%) and 2013 (+0.6%).
Excluding gasoline, the annual average rise in the CPI was 2.0% in 2015, following a 1.9% increase the previous year.
A mixed bag of price changes among the major components in 2015
Prices were up on an annual average basis in seven of eight major components in 2015. The transportation index was the only major component to decrease in 2015.
Food prices were up 3.7% on an annual average basis in 2015, after rising 2.3% in 2014. The increase in food prices was led by a rise in meat prices, which were up 7.6% in 2015. In particular, beef prices rose 15.1%, their largest increase since 2001. Additionally, consumers paid more on average for fresh vegetables (+8.1%) and fresh fruit (+6.3%) in 2015 than they did in 2014. Prices for food purchased from restaurants rose 2.7% in 2015.
The household operations, furnishings and equipment index increased 2.7% on an annual average basis in 2015, after rising 1.9% the previous year. This acceleration was led by the furniture index, which was up 3.1% in 2015, its largest increase since 1999. Additionally, prices for household appliances rose 4.0% in 2015, after decreasing 0.7% in 2014.
On an annual average basis, the shelter index was up 1.1% in 2015, after increasing 2.7% the previous year. This deceleration was mainly attributable to natural gas prices, which were down 6.4% in 2015, after rising 16.8% the previous year. Fuel oil prices decreased 19.3% in 2015, after increasing 5.1% in 2014. In contrast, homeowners’ home and mortgage insurance costs were up 8.8% on an annual average basis in 2015.
Transportation costs were down 3.0% on an annual average basis in 2015, after increasing 1.1% the previous year. The gasoline index led this decline. In contrast, consumers paid 1.6% more for the purchase of passenger vehicles in 2015, compared with 2014.
Consumer prices rise at slower rates in eight provinces
Among the provinces, eight posted smaller annual average increases in consumer prices in 2015 than in 2014. Prices in British Columbia increased more on an annual average basis in 2015 than they did the previous year, while Prince Edward Island was the lone province to register a decrease in its annual average CPI. The largest annual average gain in consumer prices was recorded in Saskatchewan (+1.6%), followed by Ontario (+1.2%) and Manitoba (+1.2%).
The gasoline index was the largest downward contributor to the annual average change in the All-items CPI in each province.
The Bank of Canada’s core index
On an annual average basis, the Bank of Canada’s core index increased 2.2% in 2015, following a 1.8% rise in 2014.
Note to readers
A seasonally adjusted series is one from which seasonal movements have been eliminated. Users employing Consumer Price Index (CPI) data for indexation purposes are advised to use the unadjusted indexes. For more information on seasonal adjustment, see Seasonally adjusted data – Frequently asked questions.
The Bank of Canada's core index excludes eight of the CPI's most volatile components (fruit, fruit preparations and nuts; vegetables and vegetable preparations; mortgage interest cost; natural gas; fuel oil and other fuels; gasoline; inter-city transportation; and tobacco products and smokers' supplies) as well as the effects of changes in indirect taxes on the remaining components.
The methodology for the traveller accommodation index will be updated with the release of the January 2016 reference month CPI (to be published February 19, 2016). For more information, refer to Changes to the traveller accommodation index of the Consumer Price Index.
A video providing an overview of how the CPI reflects price changes of goods and services purchased by households in Canada is now available on Statistics Canada’s website.
Annual Review
This release examines the percentage change between the annual average Consumer Price Index (CPI) in 2015 and 2014. Annual average indexes are obtained by calculating the average of the 12 monthly index values over the calendar year. Annual average percent change should not be confused with the 12-month percent change that is published every month with the release of the CPI. Unlike annual average change, 12-month change compares the monthly index level with the level from the same month a year earlier.
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