Highlights

The 12-month change in the Consumer Price Index (CPI) held steady at 2.2% in March 2006. Excluding energy, the CPI rose 1.7% between March 2005 and March 2006, up slightly from 1.6% in February.

The All-items index excluding the eight volatile components identified by the Bank of Canada rose 1.7% on a 12-month basis, the same increase as in the previous two months.

On a monthly basis, the CPI rose 0.5% between February and March 2006, after decreasing 0.2% in the previous month. This increase was mainly due to rising gasoline prices. Excluding the energy components, the index rose 0.4%.

The All-items index excluding the eight volatile components identified by the Bank of Canada increased 0.4% between February and March, mainly due to price increases for women’s clothing.

Twelve-month percentage change in the CPI: +2.2%
Twelve-month percentage change in the CPI excluding energy: +1.7%

In March 2006, consumers paid 2.2% more than in March 2005 for the goods and services included in the Consumer Price Index (CPI) basket, matching February’s increase. Higher prices for gasoline, for the purchase and leasing of automobile vehicles and increase in homeowners’ replacement cost were partly offset by lower prices for computer equipment and supplies, as well as for women’s and men’s clothing.

Average gasoline prices were 7.4% higher in March compared to the same month a year ago, the same average 12-month increase as in February 2006. Higher prices occurred across the country with increases ranging from 5.7% in Newfoundland and Labrador to 9.1% in Alberta. In March, the average retail price for unleaded gasoline at a self service station in Toronto was 91.1 cents per litre compared to 83.8 cents in March 2005. In Montreal, the average price was 98.2 cents per litre this March compared to 91.4 cents per litre last March. For Vancouver, prices were 97.1 cents per litre compared to 92.0 cents for the same time last year.

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

The price of the purchase and leasing of automotive vehicles rose 3.5% in March compared to one year ago. All provinces posted increases, the most modest being in Alberta (+3.0%) and the strongest being in Manitoba (+5.5%).

Homeowners’ replacement cost, which represents the worn out structural portion of housing, and is estimated using new housing prices (excluding land), increased by 6.0% between March 2005 and March 2006. All provinces showed increases with Alberta posting the highest (+20.2%). Since December 2005, the Alberta homeowners’ replacement cost index has recorded 12-month increases above 10%, from 11.7% in December 2005 to above 20% in March 2006. Alberta also showed strong numbers for housing permits over the same period.

The index for computer equipment and supplies dropped 16.7% compared to March 2005. This index is at a level of 12.5 (1995=100).

Both women’s and men’s clothing posted lower prices compared to March 2005. Driven by imported products available to Canadian customers, lower prices for clothing items have been the usual trend over the last few years. The women’s clothing index was 3.4% lower in March 2006 compared to March 2005 and the men’s clothing index was 3.9% lower.

Six of the eight major components of the CPI showed higher prices in March 2006 than in March 2005. The indexes for shelter (+3.5%), transportation (+3.5%), food (+2.4%), and alcoholic beverages and tobacco products (+2.7%) exerted the strongest upward pressure. The indexes for clothing and footwear (-2.5%), and for recreation, education and reading (-0.2%) exerted downward pressure.

Monthly percentage change in the CPI: +0.5%
Monthly percentage change in the CPI excluding energy: +0.4%

Between February and March, the CPI rose by 0.5% from a level of 128.6 to 129.3 (1992=100). Increases in the prices of gasoline and women’s clothing were offset in part by lower prices for fresh vegetables, for the purchase and leasing of automotive vehicles and for fresh fruits.

Gasoline prices rose by 5.2% between February and March 2006, after having dropped by 6.8% in February. Except for Newfoundland and Labrador, and Prince Edward Island, all provinces recorded increases which ranged from 2.3% in New Brunswick to 8.1% in Manitoba. Crude oil prices fluctuated during the first half of March, but then steadily went up towards the end of the month. Increases in crude oil prices and in wholesale gasoline prices lead to higher retail prices paid at the pump in March.

In March, retailers introduce their summer collections which lead to higher prices as compared to February. This year, the women’s clothing index increased by 6.8% in March as compared to February 2006.

Exerting downward pressure on the All-items CPI, vegetable prices decreased by 6.5% in March. All categories of fresh vegetables posted decreases in prices but tomatoes and «other fresh vegetables» were the main contributors to the drop.

The reduction of 0.3% in the price for the purchase and leasing of automotive vehicles was attributable to increases in financial incentives offered in March by some automotive vehicle manufacturers.

All categories of fresh fruits recorded price declines in March, leading to a 3.1% fall in the fresh fruit index. This decrease was mainly caused by a drop in price for oranges, as well as for «other fresh fruit» imported from South and Central America.

The seasonally adjusted CPI increased by 0.2% between February and March

Seasonally adjusted, the CPI increased by 0.2% between February and March 2006.

Upward pressure came from the indexes for transportation (+1.3%), shelter (+0.2%), clothing and footwear (+0.7%), alcoholic beverages and tobacco products (+0.7%), food (+0.1%), and health and personal care (+0.1%) indexes.

The seasonally adjusted index was pushed down by household operations and furnishings (-0.2%) and recreation, education and reading (-0.1%).

Special aggregates

The All-items index excluding the eight volatile components defined by the Bank of Canada

The All-items index excluding the eight volatile components identified by the Bank of Canada increased by 1.7% between March 2005 and March 2006. The main factors behind this increase were the purchase and leasing of automotive vehicles (+3.5%), homeowners’ replacement cost (+6.0%), electricity (+4.8%), and restaurant meals (+3.1%). The increase was moderated by a drop in computer equipment and supplies (-16.7%), women’s clothing (-3.4%), men’s clothing (-3.9%), and video equipment (-9.1%).

Between February and March 2006, the All-items index excluding the eight volatile components identified by the Bank of Canada increased by 0.4%. The main factors exerting upward pressure were women’s clothing (+6.8%), automotive vehicle insurance premiums (+2.0%), and travel tours (+4.9%). Factors pushing the index downward were purchase and leasing of automotive vehicles (-0,3%), house and yard tools (-2.5%), and fresh or frozen beef (-1.1%).

Energy

After an 8.1% rise between February 2005 and February 2006, the energy index rose 7.4% between March 2005 and March 2006.

Although all components contributed to the increase in the energy index in March 2006, the gasoline index (+7.4%) was again the main factor, followed by natural gas (+14.4%), electricity (+4.8%), fuel oil (+8.0%), and fuel, parts and supplies for recreational vehicles (+6.2%).

The energy index rose by 2.3% on a monthly basis, largely under the influence of gasoline prices (+5.2%). Except for the fuel, parts and supplies for recreational vehicles index which increased 2.4%, all other indexes dropped or were unchanged. Natural gas index and fuel oil index both decreased by 1.2%, while electricity prices were unchanged from last month.

Goods and services

The goods index was up 1.9% between March 2005 and March 2006. The increase was the result of price increases for non-durable (+3.6%) and durable goods (+0.4%), as semi-durable goods recorded a decrease (-1.9%).

In March, upward pressure on the index for non-durable goods is attributed to the prices of gasoline (+7.4%), natural gas (+14.4%), electricity (+4.8%), and cigarettes (+3.3%). These price increases were offset slightly by the falling prices of fresh and frozen beef (-2.5%) and fresh and frozen pork (-6.5%).

The durable goods index increased 0.4%, largely as a result of higher prices for the purchase of automotive vehicles (+3.5%) and automotive parts and accessories (+3.2%). Lower prices for computer equipment and supplies (-16.7%) and video equipment (-9.1%) offset the increase.

The 1.9% drop in the index for semi-durable goods was due mostly to decreases in prices for women’s clothing (-3.4%) and men’s clothing (-3.9%) but was partially offset by higher prices for newspapers (+2.6%).

The services index was up 2.4% compared to March of last year. Increases in homeowners’ replacement cost (+6.0%), the price of restaurant meals (+3.1%) and property taxes (+3.2%) had the most impact. Most of the downward pressure came from lower costs for traveller accommodation (-4.6%) and for automotive vehicle insurance premiums (-0.5%).

The goods index rose by 0.7% between February and March, as a result of increases in the non-durable goods index (+0.8%) and the semi-durable goods index (+2.5%), while the durable goods index decreased by 0.2%. Among the semi-durable goods index, women’s clothing (+6.8%) and children’s clothing (+3.0%) were the most important contributors to this upward trend. Between February and March, the cost of services increased by 0.4%. Rising prices for automotive vehicle insurance premiums (+2.0%) and travel tours (+4.9%) were the main upward factors.