Highlights

In March 2005, Canadian consumers paid 2.3% more than in March 2004 for the goods and services included in the Consumer Price Index (CPI) basket. This increase followed a 12-month rise of 2.1% in February.

The CPI excluding energy was up 1.7% from March 2004 to March 2005. The 12-month increase was slightly higher than the ones registered since October 2004, when they ranged between 1.5% and 1.6%.

The All-items index excluding the eight volatile components identified by the Bank of Canada rose by 1.9% between March 2004 and March 2005, a slight increase over the 1.8% rise of February.

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

Between February and March, the All-items index rose by 0.6% after edging up 0.4% in February. Prices for gasoline and fresh vegetables were the major factors behind this increase in the monthly change.

On a monthly basis, the All-items index excluding the eight volatile components identified by the Bank of Canada was up 0.4% following a 0.3% increase in February.

Twelve-month percentage change in the CPI: +2.3%
Twelve-month percentage change in the CPI excluding energy: +1.7%

In March, the CPI registered a 2.3% increase over March 2004. Upward pressure was exerted primarily by gasoline prices, homeowners’ replacement cost, restaurant meal prices, property taxes and fuel oil prices.

These increases were however moderated by lower prices for computer equipment and supplies, fresh vegetables, and traveller accommodation.

On average, gasoline prices in March 2005 were 11.2% higher than in March 2004. Residents of Manitoba experienced the highest increases (+16.4%), while those of Newfoundland and Labrador saw the lowest (+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 March 2004, a 12-month increase identical to that of February. This advance is attributed to higher prices for construction materials and labour.

Canadian consumers experienced a 2.9% increase in prices for restaurant meals purchased between March 2004 and March 2005.

The changes in property taxes reflected in the CPI in October 2004 (+4.3%) are still playing a large part in the 12-month rise in the All-items index.

Fuel oil prices jumped on average by 25.8% in Canada between March 2004 and March 2005. Increases occurred in all provinces, ranging from 22.4% in Ontario and Newfoundland and Labrador to 29.7% in British Columbia.

A number of factors exerted a moderating effect on the 12-month increase in the All-items index. These included the index for computer equipment and supplies, which has dropped by 21.1% compared to March 2004.

Fresh vegetable prices were 4.7% lower than in March 2004, solely under the influence of “other fresh vegetables” (-8.7%), since prices for potatoes (+7.6%), tomatoes (+0.6%) and lettuce (+4.4%) were up.

The index for traveller accommodation was down 5.0% as compared with March 2004. Price decreases were recorded in all provinces except Saskatchewan (+0.7%).

Monthly percentage change in the CPI: +0.6%
Monthly percentage change in the CPI excluding energy: +0.3%

Between February and March, the CPI rose by 0.6%, from a level of 125.8 to 126.5 (1992=100). Higher prices for gasoline, women’s clothing, and travel tours accounted for most of this increase. Lower prices for the purchase and leasing of automotive vehicles, fresh fruit, and traveller accommodation nonetheless exerted a mitigating effect on the increase.

In March, gasoline prices were up 5.2%, representing a third straight monthly rise. Increases ranged from 1.5% in Newfoundland and Labrador to 5.9% in Quebec.

Between February and March 2005, prices for women’s clothing were up 6.0%. Price increases are usually seen in March when the new summer collections are introduced.

In March 2005, the index for travel tours climbed by 5.0%. An increase of this magnitude is normal in March, when demand is at its highest. The strongest rise was recorded in Ontario (+8.2%), whereas British Columbia posted a slight decrease (-0.9%).

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

Prices for apples (-3.1%), oranges (-4.5%), bananas (-0.6%) and “other fresh fruits” (-7.7%) were lower in March, pushing down the index for fresh fruits by 5.5%.

Travellers in Canada enjoyed a 2.9% reduction in prices for traveller accommodation in March 2005. It is normal to see lower prices in March, when winter activities are ending and vacationers are waiting for warmer weather to travel. Decreases were observed by residents of every province except Prince Edward Island, Nova Scotia and New Brunswick.

The seasonally adjusted CPI rose 0.3% between February and March

Seasonally adjusted, the CPI was up 0.3% between February 2005 and March 2005.

The indexes for transportation (+0.9%), shelter (+0.3%), clothing and footwear (+1.3%), alcoholic beverages and tobacco products (+0.9%), food (+0.2%), health and personal care (+0.4%), as well as household operations and furnishings (+0.1%) pushed up the All-items index.

The seasonally adjusted index for recreation, education and reading (-0.2%) exerted downward pressure.

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 rose by 1.9% between March 2004 and March 2005. The main contributors to this increase were homeowners’ replacement cost (+5.9%), restaurant meal prices (+2.9%) and property taxes (+4.3%). The increase was partially offset by lower prices for computer equipment and supplies (-21.1%) and for traveller accommodation (-5.0%).

Between February and March 2005, the All-items index excluding the eight volatile components identified by the Bank of Canada increased by 0.4%, largely under the influence of higher prices for women’s clothing (+6.0%), travel tours (+5.0%) and men’s clothing (+2.0%). 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 9.5% between March 2004 and March 2005, mainly as a result of higher gasoline prices (+11.2%). Higher prices for fuel oil (+25.8%), natural gas (+10.3%), electricity (+3.4%), as well as for fuel, parts and supplies for recreational vehicles (+7.6%) also contributed to pushing up the energy index.

On a monthly basis, the energy index rose 3.0%, mainly owing to higher gasoline prices (+5.2%). Prices for fuel oil (+4.0%), natural gas (+1.2%) and fuel, parts and supplies for recreational vehicles (+2.5%) also served to push the index up. Electricity prices (-0.1%) alone exerted a very slight dampening effect on this increase.

Goods and services

Prices in the goods sector rose 2.5% between March 2004 and March 2005.

Most of this increase can be explained by the rise in prices for non-durable goods (+4.5%). Prices for semi-durable goods (+0.6%) were also up, whereas a decrease was posted in the index for durable goods (-0.6%).

In March, the strongest upward pressure on the index for non-durable goods came once again from gasoline prices, which shot up 11.2% as compared with March 2004. Higher prices for fuel oil (+25.8%), cigarettes (+4.7%), natural gas (+10.3%) and electricity (+3.4%) were also factors. The effect of these price increases was minimized mostly by a reduction in fresh vegetable prices (-4.7%). The 0.6% increase in the index for semi-durable goods could be attributed largely to higher prices for women’s clothing (+1.4%). The durable goods index was down 0.6%, largely as a result of plunging prices for computer equipment and supplies (-21.1%).

The services index rose 2.2% from March of last year. Increases in homeowners’ replacement cost (+5.9%), restaurant meal prices (+2.9%), property taxes (+4.3%) and homeowners’ insurance premiums (+8.2%) were the main factors behind this increase. Lower prices for traveller accommodation (-5.0%), leasing of automotive vehicles (-1.9%) and travel tours (-1.9%) accounted for most of the downward pressure exerted.

The goods index rose 1.1% between February 2005 and March 2005. The increase in the indexes for non-durable goods (+1.3%) and semi-durable goods (+2.5%) was slightly moderated by the decrease in the index for durable goods (-0.2%)

Between February 2005 and March 2005, the cost of services increased by 0.2%. The increase in prices for travel tours (+5.0%) and homeowners’ maintenance and repairs (+1.0%) was the main reason behind this rise.