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Thursday, January 22, 2004
Consumer Price IndexDecember 2003
Consumers paid 2.0% more in December for the goods and services included in the Consumer Price Index (CPI) basket than they did in December 2002. In November, the 12-month advance was 1.6%. Most of the increase in the 12-month change was due to a refund given to many Ontario electricity consumers in December 2002, causing the average bill in December 2003 to be significantly higher than the December 2002 bill.
The CPI excluding energy, which excludes the impact of the electricity refund, rose 1.7% from December 2002 to December 2003. This is very similar to the 12-month advance of 1.8% observed in November.
The all-items index excluding the eight most volatile components, as defined by the Bank of Canada, rose 2.2% from December 2002 to December 2003, compared with a 1.8% rise in November. This index was also influenced by the refund to electricity consumers in December 2002.
On a monthly basis, the CPI advanced 0.1%, after rising 0.2% in November.
Refund to electricity consumers main factor of 12-month increase in CPI
Significant factors contributing to the 2.0% 12-month increase in the CPI included electricity, automotive vehicle insurance premiums, natural gas, tuition fees, homeowners' replacement cost, cigarettes and homeowners' insurance premiums.
Lower prices for automotive vehicles and, to a lesser extent, weaker traveller accommodation and gasoline prices exerted some downward pressure on the 12-month increase in the CPI.
The electricity index jumped 18.9% from December 2002 to December 2003. This was mostly attributable to a refund of $75 mailed to many Ontario consumers in December 2002. This refund lowered the average Ontario bill in December 2002 and made the December 2003 bill 84.8% higher in comparison.
Ontario government legislation set the price of electricity at 4.3¢ per kilowatt-hour starting on December 1, 2002 and made a provision for refunds of amounts paid in excess of the 4.3¢ since May 1, 2002.
The CPI excluding energy, which excludes the impact of the electricity refund, rose 1.7% from December 2002 to December 2003. This is very similar to the 12-month rise of 1.8% observed in November.
Automotive vehicle insurance premiums increased on average 8.4% from December 2002 to December 2003.
Natural gas prices jumped 20.6%, with most of the price advances occurring in the first half of the 12-month period. From December 2002 to December 2003, increases ranged from 4.0% in Alberta to 31.5% in Ontario.
Tuition fees rose 8.1%.
Homeowners' replacement cost, which represents the expenditures necessary to compensate for house depreciation and is estimated using new housing prices (excluding land), was up 6.0%.
Cigarette prices were 10.0% higher than in December 2002. This increase was primarily due to higher provincial tobacco taxes introduced throughout the year in most provinces.
Tobacco tax increases have sent cigarette prices skyrocketing by 78.0% since March 2001. In the 33-month period prior to that, cigarette prices rose only 9.0%.
Premiums for homeowners' insurance were up 11.5%.
Automotive vehicle prices were 2.3% lower than in December 2002.
Traveller accommodation prices fell 10.1% since December 2002. Prices in this industry have been trending down for two and a half years, as the 12-month comparison has been negative since June 2001.
From December 2002 to December 2003, gasoline prices fell 2.1%. Price declines ranged from 0.4% in Manitoba to 8.4% in Alberta. Small increases were observed in British Columbia (+0.3%) and Quebec (+0.5%).
Small monthly increase in CPI
From November to December, the CPI increased 0.1%, following a 0.2% increase in the previous month. Significant factors contributing to the 0.1% increase included higher prices for fresh vegetables, cigarettes, air transportation, and electricity.
Downward pressure came from price decreases for automotive vehicles, traveller accommodation, as well as women's clothing.
Excluding the influence of energy prices, the CPI increased 0.1%.
Fresh vegetable prices rose 12.5% from November to December, following an 11.1% increase last month. Cold and wet weather in harvesting areas put upward pressure on prices for tomatoes, broccoli, cauliflower, celery and lettuce.
Cigarette prices climbed 3.3% in December. This rise was due mostly to higher taxes introduced in mid-November by the Ontario government, and in December by the governments of Quebec and British Columbia.
The electricity index went up 1.2% in December, the result of a 3.9% increase in Ontario's index. A refund to some electricity consumers in November made their December's average bill higher in comparison.
Air transportation prices increased on average 7.0%, reflecting the change from a low season rate category to a more expensive category for Pacific/Asia, transatlantic and southern routes.
Automotive vehicle prices fell 0.7%, after going up 4.0% in November, when 2004 models were introduced in the CPI. Manufacturer rebates and discounts were offered by dealers on some models.
Traveller accommodation prices dropped for the fourth consecutive month, decreasing 5.2% in December. This is typical following the end of the peak tourist season, as prices usually fall about 25% in the last four months of the calendar year.
Clothing prices were 1.9% lower in December than in November. Pre-Christmas sale prices were widespread among women's, men's and also children's clothing.
The strongest decline was observed for women's clothing (-2.1%).
The seasonally adjusted CPI increased from November to December 2003
After seasonal adjustment, the CPI rose by 0.4% from November to December.
Higher seasonally adjusted indexes for shelter (+0.4%), alcoholic beverages and tobacco products (+1.9%), food (+0.3%), household operations and furnishings (+0.1), and clothing and footwear (+0.1%) contributed to the increase.
The indexes for transportation (-0.1%) and recreation, education and reading (-0.1%) exerted some downward pressure. The seasonally adjusted health and personal care index remained stable.
All-items excluding the eight most volatile components
The all-items index excluding the eight most volatile components, as defined by the Bank of Canada, rose 2.2% from December 2002 to December 2003. This follows a 12-month advance of 1.8% in November.
Most of the increase in the 12-month change from November to December is attributable to a refund given to many Ontario electricity consumers in December 2002.
Also contributing to the rise in December were higher automotive vehicle insurance premiums, tuition fees, as well as homeowners' replacement cost and insurance premiums.
Lower prices for automotive vehicles and traveller accommodation moderated the impact of these increases on the all-items CPI excluding the eight most volatile components.
From November to December, the all-items index excluding the eight most volatile components, as defined by the Bank of Canada, fell 0.2%. This marks the first decrease since June 2003.
Downward pressure came mostly from lower automotive vehicle prices, as well as from weaker prices for traveller accommodation, women's and men's clothing, and some cosmetics.
Higher prices for electricity and homeowners' replacement cost exerted some upward pressure on the index.
Energy prices were up 6.7% from December 2002 to December 2003. This follows 12-month decreases of 1.0% in October and 0.6% in November.
The rise in the electricity index (+18.9%), due mostly to the Ontario refund in December 2002, combined with stronger natural gas prices (+20.6%) were responsible for the increase. Falling gasoline (-2.1%) and fuel oil prices (-2.9%) partially offset these upward pressures.
From November to December, energy prices rose 0.6%, mostly as a result of price increases for natural gas (+1.8%), electricity (+1.2%) and fuel oil (+3.3%). Gasoline prices decreased slightly (-0.5%).
Definitions, data sources and methods: survey number 2301.
More information about the concepts and use of the CPI is also available in the document Your guide to the consumer price index (/pub/62-557-x/4060137-eng.htm)
Available at 7 a.m. on our website. From the home page, choose Today's news releases from The Daily, then Latest Consumer Price Index.
The January 2004 Consumer Price Index will be released on February 20, 2004.
For more information, or to enquire about the concepts, methods or data quality of this release, call Rebecca McDougall (1-866-230-2248; 613-951-9606; fax: 613-951-1539; Prices Division, or Ron Morency (613-951-3103).