Highlights

The increase in energy prices in recent months does not yet seem to have had a significant impact on other consumer prices. The 12-month change in the All-items index excluding energy remained stable at 1.6%, while the 12-month change in the All-items index (CPI) jumped to 3.4%. This 12-month change represents a significant increase compared to the 2.6% recorded in August 2005. For the past year the 12-month change in the All-items index excluding energy has been between 1.4% and 1.7%.

The strong increase in the 12-month change in the All-items index was due mostly to higher gasoline prices. A large price increase for gasoline played a substantial part in the rise in the 12-month percentage change to a level of 34.7%, as compared to 20.1% in August.

Gasoline, Canada (1992=100)

Like the All-items index excluding energy, the All-items index excluding the eight volatile components as defined by the Bank of Canada remained stable. The 12-month percentage change remained at 1.7% in September and has not risen above 2% since December 2003.

On a monthly basis, the CPI All-items rose by 0.9% in September. There have been only three increases of comparable magnitude over the past 15 years. Not since the introduction of the GST in January 1991, and the increase in tobacco and gasoline taxes in May 1989, has a monthly increase exceeded 0.9%. Most of the monthly increase is due to higher prices for gasoline and men’s and women’s clothing.

The All-items index excluding the eight volatile components identified by the Bank of Canada was up 0.3% in September, more than the 0.2% rise in August.

Twelve-month percentage change in the CPI: +3.4%
Twelve-month percentage change in the CPI excluding energy: +1.6%

In September, the CPI posted a 3.4% increase over September 2004. Most of this increase can be attributed to higher gasoline prices. Over the past year the rise in prices for fuel oil, purchase and leasing of automotive vehicles, restaurant meals as well as homeowners’ replacement costs served to push up the CPI. Those increases were partly offset by lower prices for computer equipment and supplies.

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

Gasoline prices rose 34.7% and accounted for 1.5 percentage points of the 3.4% 12-month increase in the CPI. Gasoline price increases ranged from 20.3% in Yellowknife to 37.9% in Prince Edward Island.

Fuel oil prices were up 37.0% from one year ago. Concerns over supply capacity as well as the recent increases in world crude oil prices served to push up prices.

Prices for the purchase and leasing of automotive vehicles were up 2.3% between September 2004 and September 2005. The 6.4% increase in November 2004 with the introduction of the new models, along with a lower monthly decrease compared to the same period last year, explains this 2.3% increase.

Prices for restaurant meals rose 3.0% from September 2004. This index has risen continuously over the past year, with monthly increases of between 0.1% and 0.5%. Price increases calculated over 12 months ranged from 1.7% in Saskatchewan to 5.0% in Yellowknife.

Homeowners’ replacement cost, which represents the worn out structural portion of housing and is estimated using new housing prices (excluding land), rose by 4.6% over September 2004. As in August, most of this increase was attributed to labour and material costs.

Students paid an average of 1.8% more  for tuition fees this year. This is the weakest advance observed in the last 30 years. Increases in tuition fees varied from 0.3% for residents  of Saskatchewan  to 6.1% for  those of New Brunswick. In Quebec,  tuition fees are frozen for the eighth consecutive year.

Lower prices for computer equipment and supplies dampened the 12-month change in the All-items index by 0.1%. The computer equipment and supplies index plunged 21.6% compared to September 2004.

Monthly percentage change in the CPI: +0.9%
Monthly percentage change in the CPI excluding energy: +0.2%

With the upward pressure exerted by the substantial increase in gasoline prices, the CPI rose by 0.9% in September to a level of 129.1 (1992=100). To a lesser extent, prices for women’s clothing, fuel oil and natural gas also contributed to the rise in the All-items index. Lower prices for fresh vegetables and fresh fruit exerted a moderating effect on the increase.

In September, the gasoline index of 203.6 (1992=100) was 10.8% higher than that of August and was the fifth highest monthly increase since 1949. All provinces posted price increases that varied from 8.3% in Manitoba to 20.2% in Prince Edward Island. Higher crude oil prices, strong demand and uncertainty over future supply in the aftermath of Hurricane Katrina pushed up prices at the pump. For example, the average price of regular unleaded gasoline at self-service stations in Montreal was 119.0 cents per litre in September as compared to 107.4 in August. In Toronto, the average price was 108.1 cents per litre as compared to 97.9, similar to Ottawa, where a litre was 112.6 cents as compared to 97.6 in August. Vancouver posted 115.7 cents per litre, up from 105.3.

The introduction of the new fall-winter clothing collections in the stores pushed up the women’s clothing index by 7.5%. This monthly increase is only slightly higher than those for September in the past three years but is nonetheless the highest monthly increase since the introduction of the GST in January 1991.

Canadians paid 13.7% more for fuel oil in September 2005. Concerns over supply capacity, higher crude oil prices resulting from strong demand and uncertainty over supply pushed prices up.

Natural gas prices were up 7.4% in September. The increase 31.5% increase in Alberta was responsible for virtually all of the rise in the natural gas price index. The increase in Alberta was caused by higher commodity prices. With the cold weather approaching, higher demand increases and concerns over the ability to meet this demand cause prices to fluctuate upwards.

The exceptional weather in September was conducive to abundant local vegetable harvests, thus bringing down the fresh vegetable index by 7.9%.

The fresh fruits index was down 7.1%. Almost all categories of fruits showed decreases in September.

Seasonally adjusted CPI up 0.7% between August and September

Seasonally adjusted, the CPI was up 0.7% between August and September 2005.

Upward pressure came from the indexes for transportation (+2.5%), shelter (+0.6%), clothing and footwear (+0.5%), alcohol and tobacco (+0.4%) and household operations and furnishings (+0.1%).

The seasonally adjusted indexes for recreation, leisure and reading, and food were unchanged. The index for health and personal care (-0.1%) exerted a slight downward pressure on the seasonally adjusted All-items index.

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 1.7% between September 2004 and September 2005. The main contributors to this increase were prices for the purchase and leasing of automotive vehicles (+2.3%), restaurant meals (+3.0%), homeowners’ replacement cost (+4.6%) and property taxes (+4.3%). The increase was offset by lower prices for computer equipment and supplies (-21.6%), traveller accommodation (-4.2%) and insurance premiums for automotive vehicles (-1.2%).

Between August 2005 and September 2005, the All-items index excluding the eight volatile components identified by the Bank of Canada rose by 0.3%. The main factor behind the upward pressure was the rise in prices for women’s clothing (+7.5%), while most of the downward pressure is due to a decrease in prices for homeowners’ maintenance and repairs (-0.7%).

Energy

After rising 12.5% between August 2004 and August 2005, the energy index climbed 21.4% between September 2004 and September 2005.

Higher gasoline prices (+34.7%) accounted for most of the 12-month increase, but prices for fuel oil (+37.0%), natural gas (+8.4%), electricity (+2.7%) also contributed.

On a monthly basis, the energy index was up 7.5%, largely under the influence of prices for gasoline (+10.8%) as well as for fuel oil (+13.7%), natural gas (+7.4%). Electricity prices remained unchanged.

Goods and services

Prices in the goods sector rose by 4.6% between September 2004 and September 2005.

Almost all of this increase can be accounted for by the rise in prices for non-durable goods (+7.7%), while prices for semi-durable goods (+0.5%) increased slightly and those for durable goods were unchanged.

In September, the strongest upward pressure on the index for non-durable goods came from prices for gasoline (+34.7%), fuel oil (+37.0%), natural gas (+8.4%) and electricity (+2.7%). The effect of these price increases was partly offset by lower prices for fresh fruits (-6.4%), beef (-2.2%) and chicken (-2.8%).

The index for semi-durable goods was up slightly, mainly because of the increase in prices for women’s clothing (+1.1%), athletic footwear (+4.1%), and magazines and periodicals (+5.3%). These increases were attenuated by lower prices for kitchen utensils (-7.3%) and men’s footwear other than athletic footwear (-2.3%).

The durable goods index did not record any movement. The increase in prices for the purchase of automotive vehicles (+2.3%) was counterbalanced by lower prices for computer equipment and supplies (-21.6%), video equipment (-6.5%) and household and gardening tools (-5.1%).

The services index was up 2.1% over September of last year. Higher prices for restaurant meals (+3.0%), homeowners’ replacement cost (+4.6%) and property taxes (+4.3%) explained the major portion of this increase. Most of the downward pressure came from traveller accommodation (-4.2%) and insurance premiums for automotive vehicles (-1.2%).

The goods index rose by 1.5% between August 2005 and September 2005. The non-durable goods index was up 1.9%, that for semi-durable goods was up 3.0%, while that for durable goods showed no movement.

Between August 2005 and September 2005, the cost of services rose by 0.2%. Education costs drove most of the upward pressure (+1.8%), while costs for air transportation (-2.6%) accounted for most of the downward pressure.