Consumer Price Index, December 2021
Canadians continued to feel the impact of rising prices for groceries in December, as unfavourable weather conditions during the growing season and supply chain disruptions put upward pressure on prices. Supply chain disruptions also led to higher prices for durable goods, including passenger vehicles and household appliances, while higher construction costs and the increased frequency and severity of weather events contributed to rising home and mortgage insurance costs.
The Consumer Price Index (CPI) rose 4.8% on a year-over-year basis in December, up from a 4.7% gain in November. Excluding gasoline, the CPI rose 4.0% year over year.
On a monthly basis, the CPI fell 0.1% in December, following a 0.2% increase in November. This was the first monthly decline since December 2020, as gasoline prices fell in response to lower demand amid the spread of the Omicron COVID-19 variant.
The Consumer Price Index (CPI) rose 4.8% on a year-over-year basis in December, up from a 4.7% gain in November.
Headline CPI grew at a faster pace compared with November, due in part to higher prices for food (+5.2%), passenger vehicles (+7.2%) and homeowners' home and mortgage insurance (+9.3%). Excluding gasoline, the CPI rose 4.0% year over year.
On a monthly basis, the CPI fell 0.1% in December, following a 0.2% increase in November. This was the first monthly decline since December 2020.
On a seasonally adjusted monthly basis, the CPI was up 0.3%.
Prices rose in all eight major components on a year-over-year basis in December. Transportation and shelter prices contributed the most to the increase in the CPI.
Year over year, prices for services (+3.4%) rose at a faster pace in December compared with November (+2.9%). Prices for goods (+6.8%) grew at a slightly slower pace than in November (+6.9%), moderating the price growth in the CPI. Gasoline prices rose to a lesser extent in December (+33.3%) than in November (+43.6%), contributing to the slowdown in goods prices.
Inflation is often compared with changes to average wages. In December 2021, the CPI rose 4.8% on a year-over-year basis. Wage data, which maintains employment composition by occupation and tenure from the Labour Force Survey, found that wages rose 2.6% during the same period, meaning that, on average, prices rose faster than wages, and Canadians experienced a decline in purchasing power.
What's new this month?
2021 annual Daily and infographic
Today, Statistics Canada publishes the release Consumer Price Index: Annual review, 2021 and the infographic Consumer Price Index: 2021 in Review, highlighting the annual average consumer inflation in Canada and the regions in 2021.
The adjusted price index and monthly adjusted basket weights
Using various sources of expenditure data, Statistics Canada, in partnership with the Bank of Canada, has estimated monthly adjusted consumer expenditure weights that reflect shifts in consumption patterns as the pandemic evolves. For more detailed information, consult the document entitled "Adjusted Price Index and Monthly Adjusted Consumer Expenditure Basket Weights."
Explore the CPI tools that can help you make informed financial decisions
Check out the Personal Inflation Calculator! This interactive calculator allows you to enter dollar amounts in the common expense categories to produce a personalized inflation rate, which you can compare to the official measure of inflation for the average Canadian household—the Consumer Price Index (CPI).
Prices for groceries continue to climb
Grocery prices continued to climb in December, rising 5.7% year over year, the largest yearly increase since November 2011. Prices for fresh fruit (+5.6%), including apples (+6.7%), oranges (+6.6%) and bananas (+2.5%), increased on a year-over-year basis. Unfavourable weather conditions in growing regions, as well as supply chain disruptions, led to higher prices for households.
In addition, prices for bakery products rose 4.7% year over year, as drought during the summer months reduced wheat crop yields, in turn raising prices for shoppers.
Prices for durable goods increase at a faster pace
On a yearly basis, prices for durable goods rose at a faster pace in December (+5.7%) than in November (+5.5%). A durable good is a product that can be used repeatedly or continuously over a period of more than one year. Consumers who purchased a new vehicle in December paid 7.2% more than those who did so in December 2020, as the global shortage of semiconductor chips continued to elevate prices.
Consumers who purchased household appliances, like refrigerators and freezers (+13.9%) and laundry and dishwashing appliances (+10.4%), paid 8.9% more in December 2021 compared with December 2020. This was the largest yearly gain since June 1982. The movement is largely attributable to an increase in demand amid global supply chain disruptions.
Homeowners pay more for home and mortgage insurance
With the recent increases in construction costs, mainly due to higher prices for building supplies, Canadian homeowners paid 9.3% more for home and mortgage insurance in December 2021 compared with December 2020. An increase in the frequency and severity of weather-related claims, such as those related to fires and flooding, may have also contributed to higher rates.
Gasoline prices increase at a slower rate year over year
Year over year, gasoline prices rose to a lesser extent in December (+33.3%) than in November (+43.6%).
On a monthly basis, Canadian drivers paid less at the pumps as gasoline prices fell 4.1%, the largest monthly decline since April 2020. The tightening of public health restrictions in response to the new Omicron variant weighed on demand for gasoline.
Prices for air transportation rise amid strong demand for air travel
Month over month, Canadians paid 24.7% more for airfare in December, after a 3.1% drop in November. Strong demand for air travel during the holiday season contributed to the monthly price increase, which was similar to the movement in December 2019 (+23.4%), before the pandemic.
Year over year, prices rose at a faster pace in December than in November in four provinces. The increase in Alberta (+4.8%) was largely attributable to higher prices for natural gas (+35.5%) and electricity (+33.8%). Ontarians paid more for household appliances (+11.8%), contributing to the price growth in Ontario (+5.2%) in December.
Consumer Price Index, major components and special aggregates, Canada – Not seasonally adjusted
Consumer Price Index for the provinces and for Whitehorse, Yellowknife and Iqaluit – Not seasonally adjusted
Consumer Price Index statistics, preferred measures of core inflation – Bank of Canada definitions, year-over-year percent change, Canada,
Note to readers
COVID-19 and the Consumer Price Index
In December 2021, no special treatments for good and services due to the COVID-19 pandemic were required. However, Statistics Canada continues to monitor the impacts of the new Omicron variant on the Consumer Price Index (CPI).
The details of the special treatments from April 2020 to March 2021 are provided in technical supplements available through the Prices Analytical Series. Details and other treatment information for April 2021 and onwards are available upon request.
The CPI is continuously evolving to incorporate the most timely and accurate data sources and methods. In the coming months, new sources of administrative data will be introduced for the mortgage interest cost index and the cellular services price index. Work is also underway to include the price of used cars and trucks, and users will be informed in advance of this change.
Real-time data tables
The Consumer Price Index for January 2022 will be released on February 16, 2022.
The adjusted price index for October 2021 to December 2021 will be released on February 24, 2022.
The "Consumer Price Index Data Visualization Tool" is available on the Statistics Canada website.
More information on the concepts and use of the Consumer Price Index (CPI) is available in The Canadian Consumer Price Index Reference Paper (62-553-X).
For information on the history of the CPI in Canada, consult the publication Exploring the First Century of Canada's Consumer Price Index (62-604-X).
Two videos, "An Overview of Canada's Consumer Price Index (CPI)" and "The Consumer Price Index and Your Experience of Price Change," are available on Statistics Canada's YouTube channel.
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; firstname.lastname@example.org) or Media Relations (email@example.com).