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Consumer Price Index: Annual review, 2016

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Released: 2017-01-20

Annual Average CPI

2016

1.4% 

(annual change)

In 2016, the annual average increase in the Consumer Price Index (CPI) was 1.4%. This increase followed gains of 1.1% in 2015 and 2.0% in 2014.

Chart 1  Chart 1: Annual average change in the all-items Consumer Price Index, 1996 to 2016
Annual average change in the all-items Consumer Price Index, 1996 to 2016

Smaller year-over-year declines in gasoline prices in 2016 compared with 2015

On an annual average basis, consumers paid 6.0% less for gasoline in 2016 than they did the previous year. This annual average decrease was smaller than the 16.5% decline registered in 2015.

Excluding gasoline, the annual average rise in the CPI was 1.8% in 2016, following a 2.0% increase in the previous year.

Prices rise in seven of eight major components in 2016

Prices were up on an annual average basis in seven of eight major components in 2016. The clothing and footwear index was the only major component to record an annual average decrease in 2016.

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

Food prices were up 1.5% on an annual average basis in 2016, after rising 3.7% in 2015. The fresh or frozen beef index decreased 1.1% in 2016, following a 15.1% increase in 2015. Both the fresh fruit and the fresh vegetables indexes posted smaller annual average gains in 2016 than in the previous year. Prices for food purchased from restaurants rose 2.6% in 2016.

The shelter index posted a 1.6% annual average gain in 2016, following a 1.1% increase in 2015. The electricity index (+5.7%) contributed the most to this advance, following a 3.3% rise in 2015. The homeowners' replacement cost index rose 3.2% in 2016, while natural gas prices decreased more in 2016 than in 2015.

Transportation costs increased 1.1% on an annual average basis in 2016, after decreasing 3.0% in the previous year. The purchase of passenger vehicles index (+4.4%) was the main upward contributor to the annual average price change in this major component. While gasoline prices declined for a second consecutive year, their downward contribution was less in 2016 than in 2015.

On an annual average basis, the clothing and footwear index declined 0.2% in 2016, following a 1.5% increase in 2015. Children's clothing prices fell 2.3% in 2016, following a 2.9% gain in the previous year. The athletic footwear index and women's footwear (excluding athletic) index also registered annual average declines in 2016, following increases in 2015.

Consumer prices rise at faster rates in seven provinces

All provinces posted gains in consumer prices in 2016. Seven provinces posted larger annual average increases in consumer prices in 2016 than in 2015. Gains in the annual average all-items CPI in Alberta in 2016 matched those from the previous year. Meanwhile, Quebec and Saskatchewan posted smaller annual average increases in consumer prices in 2016 than in 2015.

Newfoundland and Labrador (+2.7%) and New Brunswick (+2.2%) recorded the largest increases in the annual average CPI in 2016, partly reflecting increases to the provincial component of their Harmonized Sales Tax (HST) in July. In Prince Edward Island, the provincial component of the HST increased in October.

Chart 3  Chart 3: Consumer prices rise at a faster rate in seven provinces
Consumer prices rise at a faster rate in seven provinces

The evolution of prices in Canada

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

Since 1967, Canada's centennial year, gasoline's annual average price index has increased 944.9%. Within this period, 1981 saw the largest annual average growth rate (+36.1%) while 2009 saw the largest recorded decline (-17.5%). These compare with a 6.0% decrease in gasoline prices in 2016. Since 1967, there have been 12 declines in the annual average gasoline price index.

Chart 4  Chart 4: Annual average gasoline index since 1967
Annual average gasoline index since 1967

  Note to readers

This release examines the percentage change between the annual average Consumer Price Index (CPI) in 2015 and 2016.

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.

Products

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

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

Contact information

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

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