Prices and price indexes

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The Consumer Price Index (CPI) measures the price change, over time, of the goods and services typically purchased by the average Canadian. To calculate the index, Statistics Canada collects around 72,500 price quotes from across the country for a basket of about 600 popular consumer goods and services. When the overall cost of this basket rises, it signals that our purchasing power is declining.

The CPI is used as a common measure of inflation as well as a tool for adjusting people's wages, pensions and government benefits, such as Old Age Security.

In 2011, the All-items CPI rose 2.9%, after a 1.8% rise in 2010. The growth in 2011 slightly outpaced the annual average increases of the early 2000s. It was also the largest increase since 1991, when the All-items CPI rose 5.6%.

What costs more?

Prices rose in all of the CPI's eight major categories: shelter; transportation; food; household operations, furnishings and equipment; recreation, education and reading; clothing and footwear; alcoholic beverages and tobacco products; and health and personal care.

Consumer prices increased at a faster rate in every province in 2011. However, the largest annual average gain was recorded in Nova Scotia, 3.8%, and the smallest in Alberta and British Columbia, 2.4%. Gasoline, as well as food purchased from stores, led the increase in every province in 2011.

By city, the CPI advanced fastest in Halifax (3.5%) and Saint John (3.4%) and slowest in Calgary (2.2%) and Victoria (2.1%). Shelter costs rose 5.4% in St. John's, compared with 0.9% in Victoria.

The overall cost of transportation went up 6.4% on average in 2011, compared with 4.3% in 2010. In addition to paying more for gasoline, consumers paid 4.4% more in passenger vehicle insurance premiums.

Canadians encountered markedly higher prices at the gasoline pump in 2011, a 20.0% average increase—the largest annual hike in gasoline in a decade. This followed a 9.1% rise in 2010 and a 17.5% decline in 2009. Much of the 2011 increase at the gasoline pumps occurred early in the year.

Stocking the family fridge also cost more: food prices rose 3.7%, compared with 1.4% in 2010. Food purchased from stores climbed even faster—up 4.2% after rising 1.0% in 2010. Among the foods with the largest price increases were coffee and tea, 10.5%; fresh vegetables, 9.4%; and meat, 5.3%. Higher food prices also had an effect on restaurants: food purchased from fast-food and take-out restaurants rose 3.0%.

Shelter costs rose 1.9% in 2011, following a 1.4% increase in 2010. Consumers paid 25.2% more for fuel oil and 3.1% more for property taxes in 2011. Conversely, mortgage interest cost declined 1.8%. Natural gas also fell 3.3%, the third consecutive annual decline.

Digital computing equipment and devices declined 11.3% and photographic equipment decreased 10.5%. Home entertainment equipment, parts and service, declined 5.3%.

In 2011, the clothing and footwear index rose 0.3%, the first increase in 10 years. The leading factor behind the change was the 10.4% increase in jewellery prices, which peaked in the summer alongside record-high gold prices.

Industrial product prices

The Industrial Product Price Index (IPPI), which tracks the prices that manufacturers receive for the goods they produce, increased by 4.6% from 2010 to 2011. IPPI's prices tend to be reflected in higher prices for consumer goods.

Of the 21 major commodities, 16 saw price increases. Much of the gain stems from higher prices paid for petroleum and coal products (24.4%), primary metal products (8.5%), chemical products (7.0%), tobacco and tobacco products (6.3%), fruit, vegetables and feeds (6.0%), and meat, fish and dairy products (3.4%).

Excluding petroleum and coal products, the IPPI increased 2.3% from 2010.

Raw materials prices

The Raw Materials Price Index (RMPI) tracks price changes for raw materials purchased by Canadian factories for further processing, such as crude oil, mined metals and wood. The RMPI rose 15.3% from 2010 to 2011.

The main contributors to the increase were higher prices for vegetable products (27.8%), mineral fuels (18.3%), non-ferrous metals (13.6%), copper materials (13.5%), and animal and animal products (10.8%).

Fishing and trapping had the slowest growth (0.1%) followed by wood (2.0%) and steel foundry input (2.2%).

Chart 25.1 Selected  price indexes
View data source for chart 25.1

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