Twelve-month percentage change in the CPI: +2.6%

Twelve-month percentage change in the CPI excluding energy: +2.9%

In August 2002, consumers had to pay 2.6% more than they did in August 2001 for the goods and services included in the Consumer Price Index (CPI). This increase comes after a 2.1% increase observed between July 2001 and July 2002. Energy accounted for a large part of the gap between these 12-month rates of increase.

In August, the energy sector did not temper the All-items index as had been observed in recent months. In August 2002, energy prices overall were at the same level as they were in August 2001, while they had dropped by 3.1% between July 2001 and July 2002. Although the price movements for the components of energy were individually important in August, they offset each other as a whole.

The 12-month change in the CPI excluding energy reached 2.9% in August, having accelerated slowly from 2.2% in January.

Cigarette prices, which climbed 40.2% compared to August 2001, exerted the strongest upward pressure on the All-items CPI. This rise can be attributed largely to increases in provincial and federal taxes in November 2001 and more recent increases in the spring of 2002.

In addition to cigarette prices, automotive vehicle insurance premiums (+15.5%), electricity prices (+13.0%), as well as gasoline prices (+6.1%) all played an important role in the All-items' increase. Note however, that the rise in electricity prices stems almost entirely from the 32.7% leap in prices in Ontario compared to August 2001.

The prices of food purchased from restaurants, as well as rent also exerted upward pressure on the All-items CPI, but to a much lesser degree.

The sharp drop in natural gas prices (-32.0%) has had the strongest moderating effect on the CPI's 12-month increase. The decrease in the cost of mortgage interest, as well as declining prices for traveller accommodation also helped to moderate the CPI's increase.

Monthly percentage change in the CPI: +0.4%

Between July and August 2002, the month-to-month increase in the CPI was 0.4%, which was similar to the rate recorded between June and July 2002 (+0.5%). August's increase was attributable mainly to the rise in prices for electricity and gasoline, as well as to higher automotive vehicle insurance premiums, whereas fresh vegetable prices helped to keep it down.

The 6.8% rise in the electricity index for Canada was the largest monthly increase observed since January 1991. It was entirely attributable to the 18.3% rise in Ontario prices, which reflects the fact that electricity is now sold on an open market in this province and that record heat pushed demand up in August.

A widespread increase in prices across Canada pushed the gasoline index up by 2.5% between July and August 2002. The price increases ranged from 0.1% in Whitehorse to 4.7% on Prince Edward Island.

Automotive vehicle insurance premiums went up by 2.6%, mainly under the influence of price hikes in Québec, Alberta and Ontario.

Fresh vegetable prices dropped in August 2002 (-13.8%) due to an increase in their supply. Summertime and the local availability of these products explained these price drops. Even so, these prices were 5.7% higher than what they were in August 2001.

The seasonally adjusted CPI increased by 0.4% between July 2002 and August 2002

After adjustment for seasonal variations, the All-items CPI advanced 0.4% between July and August 2002. The increases in seasonally adjusted indexes for Transportation (+1.0%), Shelter (+0.8%), Alcoholic beverages and tobacco products (+0.3%), Food (+0.2%), Household operations and furnishings (+0.2%), Health and personal care (+0.2%), as well as Recreation, education and reading (+0.2%) helped to raise the All-items index. These gains were partially neutralised by a drop in the Clothing and footwear index (-0.5%).

Special aggregates

Energy

In August 2002, energy prices had returned to their August 2001 levels. The effect of lower prices for natural gas (-32.0%) and fuel oil (-10.0%) was cancelled out by price increases for electricity (+13.0%) and gasoline (+6.1%).

After a 1.6% increase in July, the energy index went up by 3.4% between July and August 2002. The prices of all components went up, except for fuel oil prices, which remained unchanged. Electricity prices rose 6.8%, while gasoline prices rose 2.5%. As for natural gas rates, they increased 1.7%.

Goods and Services

Prices for goods rose 2.2% from August 2001 to August 2002, which is more than the 1.6% increase recorded in July. August's rise is attributable to the increase in the index for non-durable goods (+3.6%), triggered mostly by higher prices for cigarettes, electricity and gasoline. These increases have been to some degree offset by weaker natural gas and fuel oil prices. The price of semi-durable goods decreased by 0.3% in relation to their August 2001 level, whereas the durable goods index remained unchanged.

In the services sector, prices increased by 2.9% between August 2001 and August 2002, owing to increases in automotive vehicle insurance premiums, the price of food purchased from restaurants, homeowners' replacement cost, and rent. Drops in the cost of mortgage interest and traveller accommodation prices somewhat offset these increases.

The price of goods rose 0.4% between July and August 2002. This rise reflected price increases for non-durable goods, while durable and semi-durable goods indexes were stable. The price of non-durable goods increased 0.7%, pushed along by the rise in electricity and gasoline prices, while held back by the drop in fresh vegetable prices.

From July to August 2002, the cost of services increased 0.3%, mainly due to higher automotive vehicle insurance premiums, air transportation prices, rent and the price of food purchased from restaurants.