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Consumer Price Index
April 2002

National Index Highlights

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

Twelve-month percentage change in the CPI excluding energy: +2.4%

Canadian consumers paid 1.7% more than a year ago for the goods and services included in the Consumer Price Index (CPI) basket. This 12-month change is down slightly from the 1.8% increase recorded in March 2002. On a monthly basis however, the index has been increasing at a steady pace for the last three months, rising 0.6% in February, 0.7% in March and 0.6% in April. Higher gasoline prices have been the main driver of the March and April increases. These monthly price increases in the CPI coincide with a more robust economy and employment gains bolstered by consumer demand.

Despite recent increases, energy prices continued to have a moderating effect on the 12-month increase in the index, since the CPI excluding energy has advanced 2.4% in the past year. In fact, energy prices were 5.1% lower than in April 2001. Natural gas continued to lead the way with an average price decrease of 26.5%. Nearly three-quarters of this drop is attributable to the Ontario market, where supply costs have declined. Gasoline prices, despite recent increases, were nevertheless 4.2% lower than a year ago. Fuel oil prices were also lower than last April, while electricity prices rose 8.2%, somewhat tempering the drop in the energy index.

Higher food prices were once again the main factor exerting upward pressure on the CPI. Much of the 3.3% increase recorded since April 2001 can be explained by the prices of restaurant meals and fresh vegetables. The 23.3% rise in cigarette prices, mainly attributable to higher taxes, also contributed significantly to the increase. To a lesser extent, automotive vehicle insurance premiums, rents, air transportation, homeowners' maintenance and repairs, and homeowners' replacement cost also played a role in this increase. On the other hand, decreases in the indexes for mortgage interest cost, traveller accommodation and computer equipment and supplies exerted some downward pressure on the CPI.

The two economic giants, the USA and Europe, appear to be experiencing a situation similar to that of Canada with respect to consumer prices inflation. European inflation fell for a fourth consecutive month in April. This, along with other factors, paved the way for the European Central Bank to maintain interest rates at their current level. The U.S. Consumer Price Index has registered variations almost identical to that of the Canadian index with increases of 1.6% compared to 12 months ago and 0.6% between March and April.

Monthly percentage change in the CPI: +0.6%

The overall consumer price index rose for a fifth consecutive month with stronger increases in the last three months. The 0.6% increase between March and April 2002 was driven mainly by rising gasoline prices (+6.8%), as was last month's increase. Other factors contributing to the rise, although to a lesser extent, were higher prices for cigarettes, new vehicles and air transportation. These increases were partially offset by lower prices for natural gas and lettuce.

The 6.8% jump in gasoline prices for April, though smaller than last month's, was still the main factor in the monthly rise in the All-items index. Like in March, it accounts for at least half of the increase. The steady rise in crude oil prices since the start of the year contributed to these price increases. In fact, the price per barrel of crude oil almost reached its level of last April ($40).

The 4.0% rise in cigarette prices is due mainly to increases in provincial sales taxes. These increases were felt mainly in Alberta (+22.5%) and Saskatchewan (+27.4%), although the governments of Nova Scotia, Newfoundland, Prince Edward Island and Manitoba also increased their sales taxes on cigarettes. Except for Nova Scotia and Manitoba, the increases came into effect in March and part of the increase was reflected in the March index.

The prices of new vehicles rose 1.0%, largely because of a price increase in the manufacturer's retail suggested price. The price rises were felt mainly in Quebec (+1.4%), Ontario (+1.3%) and Manitoba (+1.0%).

Air transportation prices advanced 4.8% in April. More than half of this rise was attributable to the new Air Traveller Security Charge. That charge is applied as follows: $12 for each departure from Canada for domestic and North American destinations and $24 for other international departures. It therefore cost $24 more to fly Toronto-Vancouver return, for example, and $12 more to fly Toronto-Los Angeles return.

Natural gas prices fell 12.9% from March to April, the sixth consecutive monthly decline. This decrease was attributable to market conditions in Ontario (-23.2%), while the markets for Alberta (+13.9%) and Quebec (+5.1%) registered increases.

Lettuce prices, which had risen dramatically in March, fell back in April. The 29.8% drop was mainly attributable to improved weather conditions in California and Arizona. Crops however remained smaller than last year, which explains why price levels were 67.7% higher than those of April 2001.

The seasonally adjusted CPI advanced 0.5% between March 2002 and April 2002

After adjusting for seasonal influences, the All-items CPI rose by 0.5% between March and April 2002. The increase in the seasonally adjusted index for April is attributable to increases in the indexes for alcoholic beverages and tobacco products (+2.2%), transportation (+1.7%), clothing and footwear (+0.4%), health and personal care (+0.3%), food (+0.2%), as well as household operations and furnishings (+0.2%). These increases were partially offset by a drop in the seasonally adjusted index for recreation, education and reading (-0.2%) and shelter (-0.2%).

Special Aggregates


In April 2002, energy prices remained 5.1% below their level of a year earlier. This decrease is attributable to lower prices for natural gas (-26.5%), gasoline (-4.2%) and fuel oil (-10.8%). Only electricity prices posted an increase compared with last year (+8.2%).

Energy prices rose 1.7% from March to April 2002. Higher gasoline prices (+6.8%) were largely responsible for the increase. On the other hand, a sizable drop in the prices of natural gas in Ontario (-23.2%) did much to slow the rise in the energy index. Price increases of 6.1% for fuel oil and 0.1% for electricity were also recorded.

Goods and Services

From April 2001 to April 2002, prices in the goods sector increased by 0.9%. This rise is mostly attributable to the non-durable goods index (+1.5%), which was pushed up primarily by higher prices for food, cigarettes and electricity. Lower prices for natural gas and gasoline partially offset these increases. The rise in the semi-durable goods category (+0.2%) was more modest, with lower prices for women's clothing and for footwear partially offsetting higher prices for reading material and other printed matter. The prices of durable goods declined 0.4% from their level in April 2001, as lower prices for computer equipment and supplies and new vehicles were only partially offset by price increases for automotive vehicle parts and supplies.

Again this month, price increases in the services sector were larger than those in the goods sector. Widespread increases caused the services index to advance 2.6% over April 2001, led by automobile insurance premiums. The prices of restaurant meals, rents and prices for air transportation also contributed significantly to this increase. The only factors exerting even a weak slow-down effect on the index were mortgage interest cost and the prices of traveller accommodation and childcare.

From March to April, prices for the goods category advanced by 0.8%. The non-durable goods index contributed the most to the increase with a rise of 1.1%, reflecting higher gasoline and cigarette prices. This increase was only partially offset by lower prices for natural gas. The durable goods index advanced by 0.6%, with higher prices for new motor vehicles dominating this sector. Prices in the semi-durable goods category declined 0.3% from March to April 2002, reflecting the widespread price decreases in the women's clothing categories.

The cost of services rose 0.4%, primarily because of increased air transportation prices and automobile insurance premiums, as well as higher prices for homeowners' maintenance and repairs.

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