Highlights

In February 2005, Canadian consumers paid 2.1% more than in February 2004 for the goods and services included in the Consumer Price Index (CPI) basket. This increase follows a 12-month rise of 2.0% in January.

The CPI excluding energy went up by 1.6% between February 2004 and February 2005. The 12-month increase for this index has remained relatively stable since June 2004, fluctuating between 1.4% and 1.6%.

The All-items index excluding the eight volatile components identified by the Bank of Canada rose by 1.8% between February 2004 and February 2005, compared with 1.6% in January 2005.

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

Between January and February, the All-items index rose by 0.4% after slipping 0.1% in January. An important part of the shift from a decrease in January to an increase in February was caused by higher travel tours prices. Significantly higher prices are usually noted in February, when demand increases considerably as compared with January.

On a monthly basis, the All-items index excluding the eight volatile components identified by the Bank of Canada was up 0.3%, in comparison with a 0.1% decrease in January and December.

Twelve-month percentage change in the CPI: +2.1 %
Twelve-month percentage change in the CPI excluding energy: +1.6%

In February, the CPI registered a 2.1% increase over February 2004. Upward pressure was exerted primarily by gasoline prices, homeowners’ replacement cost, and the purchase and leasing of automotive vehicles.

These increases were nonetheless attenuated by lower prices for computer equipment and supplies, fresh vegetables, and women’s and children’s clothing.

On average, gasoline prices in February 2005 were 8.5% higher than in February 2004. Residents of Alberta experienced the largest increases (+15.3%), followed closely by those of Manitoba (+14.4%) and Prince Edward Island (+13.7 %). The smallest increases were noted in Quebec (+5.9%) and Ontario (+7.0%).

Homeowners’ replacement cost, which represents the worn out structural portion of housing and is estimated using new housing prices (excluding land), rose 5.9% over February 2004. Since the last peak in July 2004, 12-month increases have been gradually diminishing, with February’s increase being the lowest.

The index for the purchase and leasing of automotive vehicles climbed 1.9% between February 2004 and February 2005, from 123.3 to 125.7 (1992=100). North American automotive vehicle manufacturers significantly reduced their financial incentives when their 2005 models were introduced.

A number of factors exerted a moderating effect on the 12-month increase in the All-items index. These include the index for computer equipment and supplies, which has dropped by 22.1% since February 2004.

Fresh vegetable prices were 5.7% lower than in February 2004, largely under the influence of prices for “other fresh vegetables” (-8.6%). Prices for tomatoes (-5.6%) and lettuce (-3.2%) were also down. The favourable weather conditions of recent months completely reversed the negative impact on prices of the hurricanes and torrential rains that hit the United States last fall. The increase in potato prices (+11.4%) offset slightly the decreases in these indexes. A concerted reduction in supply seems to have been behind this increase.

The indexes for women’s clothing dropped by 2.3% and for children’s clothing by 5.9% since February 2004.

Monthly percentage change in the CPI: +0.4%
Monthly percentage change in the CPI excluding energy: +0.2%

Between January and February, the CPI rose by 0.4 %, from a level of 125.3 to 125.8 (1992=100). Higher prices for gasoline, women’s and men’s clothing, and travel tours accounted for most of this increase. Lower prices for the purchase and leasing of automotive vehicles, fresh vegetables and fresh fruit nonetheless exerted a mitigating effect on the increase.

In February, gasoline prices were up 3.4%, representing the second consecutive monthly rise. Increases ranged from 2.0% in Ontario to 7.6% in Saskatchewan.

Between January and February 2005, prices for women’s clothing rose by 4.7% and those for men’s clothing by 4.2%. It is usual to note increases in these indexes in February.

In February 2005, the index for travel tours climbed by 8.1%, with every province posting an increase. The highest rise was recorded in Ontario (+9.3%) and the lowest in the Atlantic Provinces (+3.3%).

One of the factors that exerted downward pressure on the All-items index between January 2005 and February 2005 was the 0.6% reduction in prices for the purchase and leasing of automotive vehicles. This monthly decrease was attributable to increases in the financial incentives offered in February by some automotive vehicle manufacturers.

Prices for fresh vegetables and fresh fruit were down in February. The drop in prices for tomatoes (-18.0%), lettuce (-10.0%) and “other fresh vegetables” (-0.5%) brought down the index for fresh vegetables (-4.7%). Fresh fruit prices followed suit, with an average reduction of 3.6% primarily caused by “other fresh fruit” (-7.4%) and apples (-2.4%). Prices for oranges (+1.7%) and bananas (+5.8%) were up.

The seasonally adjusted CPI rose by 0.2% between January and February

Seasonally adjusted, the CPI was up 0.2% from January 2005 to February 2005.

The indexes for transportation (+0.5%), shelter (+0.2%), clothing and footwear (+0.7%), as well as that for health and personal care (+0.3%) pushed the All-items index up.

Downward pressure was exerted by the seasonally adjusted indexes for recreation, education and reading (-0.2%), and food (-0.1%).

The index for alcoholic beverages and tobacco products, as well as that for household operations and furnishings remained stable in February.

Special aggregates

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

The All-items index excluding the eight volatile components identified by the Bank of Canada increased by 1.8% between February 2004 and February 2005. The main contributors to this increase were homeowners’ replacement cost (+5.9%), the purchase and leasing of automotive vehicles (+1.9%), restaurant meals (+2.7%) and property taxes (+4.3%). The increase was attenuated by lower prices for computer equipment and supplies (-22.1%), and for women’s clothing (-2.3%) and children’s clothing (-5.9%).

From January to February 2005, the All-items index excluding the eight volatile components identified by the Bank of Canada increased by 0.3%, largely under the influence of higher prices for women’s clothing (+4.7%), travel tours (+8.1%) and men’s clothing (+4.2%). The decrease in prices for the purchase and leasing of automotive vehicles (-0.6%) accounted for most of the moderating effect on this increase.

Energy

The energy index climbed 7.3% between February 2004 and February 2005, mainly as a result of higher gasoline prices (+8.5%). Higher prices for fuel oil (+21.1%), electricity (+3.4%) and natural gas (+6.2%), as well as for fuel, parts and supplies for recreational vehicles (+6.7%), also contributed to pushing up the energy index.

On a monthly basis, the energy index rose 2.1%, mainly owing to higher gasoline prices (+3.4%). Prices for fuel oil (+4.4%), natural gas (+1.7%), as well as for fuel, parts and supplies for recreational vehicles (+1.8%) also served to push the index up. Electricity prices remained stable.

Goods and services

Prices in the goods sector rose 1.9% between February 2004 and February 2005.

All of this increase can be explained by the 3.7% rise in prices for non-durable goods, since the indexes for semi-durable goods (-0.7%) and durable goods (-0.2%) were down.

In February, the strongest upward pressure on the index for non-durable goods came once again from gasoline prices, which shot up 8.5% over February 2004. Higher prices for fuel oil (+21.1%) and electricity (+3.4%) were also a factor. The effect of these price increases was attenuated largely by a reduction in fresh vegetable prices (-5.7%). The 0.7% drop in the index for semi-durable goods was attributable mostly to the price decreases for women’s clothing (-2.3%). The durable goods index was down 0.2%, largely as a result of lower prices for computer equipment and supplies (-22.1%).

The services index rose 2.3% from February of last year. Increases in homeowners’ replacement cost (+5.9%), property taxes (+4.3%), homeowners’ insurance premiums (+9.0%) and restaurant meal prices (+2.7%) were the main factors behind this increase. Lower prices for traveller accommodation (-2.8%), automotive vehicle leasing (-1.2%) and travel tours (-1.5%) accounted for most of the downward pressure exerted.

The goods index rose 0.6% between January 2005 and February 2005. The increase in the indexes for non-durable goods (+0.5 %) and semi-durable goods (+2.5%) was slightly moderated by the decrease in the index for durable goods (-0.4%).

Between January 2005 and February 2005, the cost of services increased by 0.2%. The increase in prices for travel tours (+8.1%) was the main reason behind this rise.