Twelve-month percentage change in the CPI: +4.5%

Twelve-month percentage change in the CPI excluding energy: +3.5%

Energy prices were the main factor behind the 4.5% increase in the CPI between January 2002 and January 2003. While a $75 refund to electricity consumers in Ontario explained most of the slowdown in the 12-month increase in the CPI from 4.3% in November to 3.9% in December, the return to full cost for these same consumers is largely responsible for its rebound to 4.5% in January. An increase in the price of gasoline also contributed to this climb. Although the base effect has been fading since December, it is still present.

All-items Index, Canada

Percentage Change from the Same Month of the Previous Year, Canada

Monthly percentage change in the CPI : +0.8%

Monthly percentage change in the CPI excluding energy: +0.1%

The decrease in Ontario’s electricity index strongly affected the decrease of the All-items index (-0.3%) in December 2002. In January 2003, it is the return to normal of Ontario’s electricity index that had the most significant influence on the 0.8% increase in the All-items index. Aside from this factor, increases in the prices of gasoline, natural gas and non-alcoholic beverages also exerted a significant upward pressure on the All-items index. The drop in prices for automotive vehicles and travel tours mitigated this increase. The increase in the CPI excluding energy (+0.1%) slowed down, having increased by 0.3% in December.

The 18.8% increase in Canada’s electricity index from December 2002 to January 2003 was almost entirely attributable to the 85.1% increase in the one for Ontario. In December, a $75 refund significantly reduced the cost paid by Ontario consumers. The return to full cost brought the index back to a level more in line with that of November.

In January, consumers paid 6.2% more for gasoline than they had in December 2002. Gasoline prices increased in all provinces and territories except for Prince Edward Island (-1.5%), where prices are regulated. Increases ranged from 0.4% in Yellowknife to 10.0% in Saskatchewan.

Between December 2002 and January 2003, there was a 7.6% average increase in natural gas prices. This rise was largely due to a 17.2% price hike in Alberta following an increase in service charges. A significant price rise was also recorded in Ontario (+6.9%) as a result of higher supply and delivery costs. Between December 2002 and January 2003, the price of non-alcoholic beverages increased by 9.4% due to a return to regular prices after holiday promotions.

The automotive vehicle purchase price index fell by 1.2% in January. More generous rebates more than offset the few increases in suggested retail prices of some manufacturers.

In January 2003, the travel tour index fell by 8.6%. Prices decreased in all provinces. The strongest drops were posted in Ontario (-12.6%) and Saskatchewan (-11.4%), while in British Columbia, the index recorded a decrease of only 2.5%. Travel tour prices are collected every year in January, February and March when they are most popular among Canadians. Of these three months, January is the month with the lowest demand. Since January prices are directly compared to those in March of the previous year, the index usually falls in January. However in all provinces, travel tour prices increased over those of January 2002. The increases varied from 1.4% for Manitoba residents to 19.2% for those from the Maritimes.

The seasonally adjusted CPI rose by 1.0% from December 2002 to January 2003

After adjustment for seasonal variations, the All-items CPI increased by 1.0% between December 2002 and January 2003. This increase followed a 0.1% drop posted in December. The decrease in December was caused by a $75 refund to Ontario’s electricity consumers. After a return to normal levels for the electricity index in January, the shelter index jumped by 1.9%. Other components that had an upward effect on the index were transportation (+1.3%), alcoholic beverages and tobacco products (+0.4%), food (+0.3%), recreation, education and reading (+0.2%), household operations and furnishings (+0.1%), and health and personal care (+0.1%). These increases were partially offset by a drop in the clothing and footwear index (-0.7%).

Special aggregates

All-items excluding the 8 most volatile components (Bank of Canada definition)

The prices of goods and services included in the All-items index excluding the 8 most volatile components as defined by the Bank of Canada increased by 3.3% between January 2002 and January 2003. While the drop in Ontario’s electricity index accounted for much of the deceleration in the 12-month change in this index from 3.1% in November to 2.7% in December, its resurgence in January is mainly due to the increase in this same index. A $75 refund received by Ontario residents led to a drop in the index in December.

The All-items index excluding the 8 most volatile components as defined by the Bank of Canada increased by 0.7% between December 2002 and January 2003, after decreasing 0.5% in December. Contributing the most to this turnaround in the monthly percentage change were the return to full cost for electricity in Ontario, a reduction in the number of promotions for clothing and a return to regular prices for non-alcoholic beverages.

Energy

Energy prices jumped by 15.3% between January 2002 and January 2003. Gasoline prices (+25.1%) accounted for three quarters of this increase, while the increase in the prices of fuel oil (+31.2%), electricity (+1.8%) and natural gas (+5.3%) accounted for the rest of the increase.

Between December 2002 and January 2003, energy prices increased by 10.0%. Half of this increase can be accounted for by a return to normal electricity cost in Ontario. Even excluding the effect of electricity, the monthly increase remains the highest since May 2001. The 6.2% increase in gasoline prices contributed greatly to January’s increase in the energy index.

Goods and services

Prices in the goods sector rose by 4.5% from January 2002 to January 2003, after posting an increase of 3.4% in December. In December, the drop in the electricity index helped slow the progression of this index, which was no longer the case in January. The 4.5% increase is mainly due to the increase in the non-durable goods index (+7.5%), which was fuelled by higher prices for gasoline, cigarettes, fuel oil, electricity, natural gas, bakery products and tomatoes. Decreases in the prices of some fruits and vegetables mitigated these increases to some extent. The durable goods category also progressed (+0.8 %), mainly under the effect of an increase in new automotive vehicle prices. The semi-durable goods category index fell by 0.2%, mainly as a result of the downward pressure exerted by lower women’s and men’s clothing prices.

The cost of services rose 4.4% between January 2002 and January 2003. This increase was similar to the one registered between December 2001 and December 2002 (+4.3%).

The goods index rose 1.6% between December 2002 and January 2003. Non-durable goods prices (+3.3%) had an upward effect on this index. The durable and semi-durable goods indexes both fell by 0.7%. The greatest part of the increase in non-durable goods was attributable to the return to full cost for electricity in Ontario. Higher prices for gasoline, natural gas, non-alcoholic beverages, fresh vegetables and fuel oil accounted for most of the rest of the increase in the non-durable goods sector. The drop in the durable goods index is mainly due to the decrease in new automotive vehicle prices, while price decreases were generalized among semi-durable goods but were mostly felt in the clothing category.

The services index rose 0.2% between December 2002 and January 2003, after increasing 0.6% in December. However, January’s monthly increase matches those of October and November.