Data quality, concepts and methodology: Explanatory notes for tables

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Table 1 The Consumer Price Index, major components and special aggregates, Canada, not seasonally adjusted

and

Table 2 The Consumer Price Index, major components and special aggregates, Canada, seasonally adjusted

1. 2005 Consumer Price Index (CPI) basket weights at April 2007 prices, Canada.
2. Figures may not add to 100% due to rounding.
3. The measure of core consumer price index (CPI) excludes from the all-items CPI the effect of changes in indirect taxes and eight of the most volatile components identified by the Bank of Canada: fruit, fruit preparations and nuts; vegetables and vegetable preparations; mortgage interest cost; natural gas; fuel oil and other fuels; gasoline; inter-city transportation; and tobacco products and smokers' supplies. For additional information on core CPI, please consult the Bank of Canada Web site: http://www.bankofcanada.ca/en/inflation/index.htm.

Table 3 The Consumer Price Index, provinces, Whitehorse, Yellowknife and Iqaluit, not seasonally adjusted

1. Data for Iqaluit are on a December 2002=100 base (200212=100) and the Standard Geographical Classification (SGC) 2001. Previous to April 1, 1999, the town of Iqaluit formed part of the Northwest Territories. Subsequent to April 1, 1999, the town of Iqaluit formed part of the newly-created territory of Nunavut.

Table 4 The Consumer Price Index, major components and selected sub-groups, Canada, not seasonally adjusted

Table 4-1

1. Food expenditure information below the aggregate level of "food purchased from stores" was unavailable after 2001. To obtain 2005 basket weights for food categories under this aggregate, expenditures of 2001 for each food category were adjusted to reflect price movements to 2005. However data from the 2005 Survey of Household Spending were used to update the weight at the major component level of "food" compared to all other components.

Table 4-2

1. In July 2004, the 2001 basket weights introduced with the January 2003 data were adjusted; the weights for mortgage interest cost were re-evaluated.
2. Due to changes in the Ontario electricity market that became effective May 1, 2002, it was necessary to adjust the treatment of electricity prices in the consumer price index (CPI) for that province. A question and answer fact sheet that explains those changes is now available. To obtain the fact sheet on the treatment of electricity prices in Ontario, please contact Client Services Unit, Prices Division, telephone: (613) 951-9606, toll-free: 1-866-230-2248, fax: (613) 951-2848, e-mail: prices-prix@statcan.gc.ca.

Table 4-5

1. Over the previous two years, Statistics Canada has updated, by province, the model year of passenger vehicles used in the calculation of the passenger vehicle insurance premiums index over a three month period. In 2008, this quality adjustment exercise will be reflected in the month of May for all provinces.

Table 4-7

1. From April 2006, Statistics Canada changed its implementation of the price index formula used for traveller accommodation. As a result, data from April 2006 are not strictly comparable to earlier time periods.

Table 5 The Consumer Price Index for Canada, all-items, not seasonally adjusted, historical data

1. The annual average index is calculated as the average of the published 12 individual monthly indexes, rounded to one decimal place. Percentage changes between the annual average indexes are calculated based on these published rounded numbers. Between May 2007 and September 2007, the annual average percentage changes in Table 5 were calculated based on annual average indexes that were not rounded. As a result, some percentage changes were different by +/- 0.1 from the official percentage change. This problem only affected the annual average column of Table 5.

Table 6 Core consumer price index (CPI) (Bank of Canada definition), not seasonally adjusted, historical data

1. The measure of core consumer price index (CPI) excludes from the all-items CPI the effect of changes in indirect taxes and eight of the most volatile components identified by the Bank of Canada: fruit, fruit preparations and nuts; vegetables and vegetable preparations; mortgage interest cost; natural gas; fuel oil and other fuels; gasoline; inter-city transportation; and tobacco products and smokers' supplies. For additional information on core CPI, please consult the Bank of Canada Web site: http://www.bankofcanada.ca/en/inflation/index.htm.
2. The annual average index is calculated as the average of the published 12 individual monthly indexes, rounded to one decimal place. Percentage changes between the annual average indexes are calculated based on these published rounded numbers.

Table 7 The Consumer Price Index for Canada, major components and special aggregates, not seasonally adjusted, historical data

1. Goods are physical or tangible commodities usually classified according to their life span into non-durable goods, semi-durable goods and durable goods. Non-durable goods are those goods that can be used up entirely in less than a year, assuming normal usage. For example, fresh food products, disposable cameras and gasoline are non-durable goods. Semi-durable goods are those goods that may last less than 12 months or greater than 12 months depending on the purpose to which they are put. For example, clothing, footwear and household textiles are semi-durable goods. Durable goods are those goods which may be used repeatedly or continuously over more than a year, assuming normal usage. For example, cars, audio and video equipment and furniture are durable goods.
2. A service in the consumer price index (CPI) is characterized by valuable work performed by an individual or organization on behalf of a consumer, for example, car tune-ups, haircuts and city public transportation. Transactions classified as a service may include the cost of goods by their nature. Examples include food in restaurant food services and materials in clothing repair services.
3. The special aggregate "energy" includes: "electricity", "natural gas", "fuel oil and other fuels", "gasoline", and "fuel, parts and supplies for recreational vehicles".
4. The annual index level is the average of the 12 individual monthly indexes.

Table 8 Annual average percentage changes for the Consumer Price Index

Table 8-1 and 8-2

1. The annual index level is the average of the 12 individual monthly indexes. The percentage change for a given calendar year is calculated using the annual average indexes.

Table 9 The Consumer Price Index, major components, selected sub-groups and special aggregates, provinces, Whitehorse and Yellowknife, not seasonally adjusted

Tables 9-1, 9-2, 9-3, 9-4, 9-5, 9-7, 9-8, 9-9, 9-10 and 9-11

1. The special aggregate "energy" includes: "electricity", "natural gas", "fuel oil and other fuels", "gasoline", and "fuel, parts and supplies for recreational vehicles".
2. Food expenditure information below the aggregate level of "food purchased from stores" was unavailable after 2001. To obtain 2005 basket weights for food categories under this aggregate, expenditures of 2001 for each food category were adjusted to reflect price movements to 2005. However data from the 2005 Survey of Household Spending were used to update the weight at the major component level of "food" compared to all other components.
3. Over the previous two years, Statistics Canada has updated, by province, the model year of passenger vehicles used in the calculation of the passenger vehicle insurance premiums index over a three month period. In 2008, this quality adjustment exercise will be reflected in the month of May for all provinces.

Table 9-6

1. The special aggregate "energy" includes: "electricity", "natural gas", "fuel oil and other fuels", "gasoline", and "fuel, parts and supplies for recreational vehicles".
2. Food expenditure information below the aggregate level of "food purchased from stores" was unavailable after 2001. To obtain 2005 basket weights for food categories under this aggregate, expenditures of 2001 for each food category were adjusted to reflect price movements to 2005. However data from the 2005 Survey of Household Spending were used to update the weight at the major component level of "food" compared to all other components.
3. Due to changes in the Ontario electricity market that became effective May 1, 2002, it was necessary to adjust the treatment of electricity prices in the consumer price index (CPI) for that province. A question and answer fact sheet that explains those changes is now available. To obtain the fact sheet on the treatment of electricity prices in Ontario, please contact Client Services Unit, Prices Division, telephone: (613) 951-9606, toll-free: 1-866-230-2248, fax: (613) 951-2848, e-mail: prices-prix@statcan.gc.ca.
4. Over the previous two years, Statistics Canada has updated, by province, the model year of passenger vehicles used in the calculation of the passenger vehicle insurance premiums index over a three month period. In 2008, this quality adjustment exercise will be reflected in the month of May for all provinces.

Table 9-12

1. The special aggregate "energy" includes: "electricity", "natural gas", "fuel oil and other fuels", "gasoline", and "fuel, parts and supplies for recreational vehicles".
2. Food expenditure information below the aggregate level of "food purchased from stores" was unavailable after 2001. To obtain 2005 basket weights for food categories under this aggregate, expenditures of 2001 for each food category were adjusted to reflect price movements to 2005. However data from the 2005 Survey of Household Spending were used to update the weight at the major component level of "food" compared to all other components.
3. Part of the increase first recorded in the shelter index for Yellowknife for December 2004 inadvertently reflected rent increases that actually occurred earlier. As a result, the change in the shelter index was overstated in December 2004, and was understated in the previous two years. The shelter index series for Yellowknife has been corrected from December 2002. In addition, the Yellowknife all-items consumer price index (CPI) and some Yellowknife special aggregate index series have also changed. Data for Canada and all other provinces and territories were not affected.
4. Over the previous two years, Statistics Canada has updated, by province, the model year of passenger vehicles used in the calculation of the passenger vehicle insurance premiums index over a three month period. In 2008, this quality adjustment exercise will be reflected in the month of May for all provinces.

Table 10 The all-items Consumer Price Index, provinces, Whitehorse, Yellowknife and Iqaluit, not seasonally adjusted, historical data

1. Data for Iqaluit are on a December 2002=100 base (200212=100) and the Standard Geographical Classification (SGC) 2001. Previous to April 1, 1999, the town of Iqaluit formed part of the Northwest Territories. Subsequent to April 1, 1999, the town of Iqaluit formed part of the newly-created territory of Nunavut.
2. The annual index level is the average of the 12 individual monthly indexes.

Table 11 The Consumer Price Index and selected sub-groups, by urban centre, not seasonally adjusted

1. With the introduction of the 1992 basket in January 1995, emphasis was shifted from urban centre data to provincial data. Urban centre all-items series were continued since many users had come to rely on this service, but the method of calculation was changed. Shelter indexes are calculated for each urban centre. This recognizes the importance of shelter in the basket, the significant and persistent differences in price movements between urban centres, and the availability of local data. For the other seven major components, the movement of the provincial counterpart is used except in the cases of Montréal, Toronto, and Vancouver, where a sub-provincial counterpart is used. The major components are aggregated using the urban centre's expenditure pattern to arrive at each urban centre's all-items index.
2. Users of the urban centre indexes should note that, effective July 2007, Statistics Canada has corrected the weights of some urban centres that were in error in the Consumer Price Index 2005 basket update. The weights of St. John's, Charlottetown, Halifax, Saint John, Québec City, Montréal, Ottawa, Thunder Bay, Winnipeg, Regina, Saskatoon, Edmonton, Calgary and Victoria were adjusted, while those of Toronto, Vancouver, Whitehorse, Yellowknife and Iqaluit were not. With this correction, the July 2007 level of each urban centre index has been restored to reflect the correct movement for May 2007 and June 2007. The published urban centre indexes for May and June 2007 will remain unchanged. The calculation of urban centre indexes is separate from the calculation of the provincial and national indexes. Therefore, the correction made to the urban centre weights has no effect at all on the provincial or national indexes. Published weight documentation was also not affected.
3. Formerly Ottawa (Ottawa-Gatineau, Ontario part), represents Ottawa only.

Table 12 The all-items Consumer Price Index by urban centre, not seasonally adjusted, historical data

1. With the introduction of the 1992 basket in January 1995, emphasis was shifted from urban centre data to provincial data. Urban centre all-items series were continued since many users had come to rely on this service, but the method of calculation was changed. Shelter indexes are calculated for each urban centre. This recognizes the importance of shelter in the basket, the significant and persistent differences in price movements between urban centres, and the availability of local data. For the other seven major components, the movement of the provincial counterpart is used except in the cases of Montréal, Toronto, and Vancouver, where a sub-provincial counterpart is used. The major components are aggregated using the urban centre's expenditure pattern to arrive at each urban centre's all-items index.
2. Users of the urban centre indexes should note that, effective July 2007, Statistics Canada has corrected the weights of some urban centres that were in error in the Consumer Price Index 2005 basket update. The weights of St. John's, Charlottetown, Halifax, Saint John, Québec City, Montréal, Ottawa, Thunder Bay, Winnipeg, Regina, Saskatoon, Edmonton, Calgary and Victoria were adjusted, while those of Toronto, Vancouver, Whitehorse, Yellowknife and Iqaluit were not. With this correction, the July 2007 level of each urban centre index has been restored to reflect the correct movement for May 2007 and June 2007. The published urban centre indexes for May and June 2007 will remain unchanged. The calculation of urban centre indexes is separate from the calculation of the provincial and national indexes. Therefore, the correction made to the urban centre weights has no effect at all on the provincial or national indexes. Published weight documentation was also not affected.
3. The annual index level is the average of the 12 individual monthly indexes.
4. Formerly Ottawa (Ottawa-Gatineau, Ontario part), represents Ottawa only.

Table 14 Average retail prices, monthly, Canada

1. Prices are expressed in dollars, except for the price of gasoline which is expressed in cents per litre.

Average retail prices for food, household supplies, personal care items, cigarettes and gasoline

Table 14 shows, for the current month and the two previous months, average prices for selected food, household supplies, personal care items, cigarettes and for gasoline.

Prices for these items are collected as part of the regular monthly CPI survey. Prices for the selected food, household supply and personal care items are observed in food supermarkets, while prices for cigarettes are collected in supermarkets, department stores, drug stores and tobacco shops. Average prices for each commodity are calculated as a weighted average of the average prices in the observed urban centres using the population of these urban centres as weights.

The commodities which are priced can vary in quality between outlets or between urban centres. This is the reason why average prices are not published for each of those urban centres. Brands and outlets can also vary from month to month. Therefore, average prices may not necessarily be fully comparable from one month to another and should not be used as an appropriate measure of pure price change through time. A matched commodity and outlet sample is used for the CPI to determine the pure price movement of commodities through time.

Table 15 Inter-city indexes of retail price differentials, as of October 2007, for selected groups of consumer goods and services, not seasonally adjusted

Purpose and Scope

Table 15 shows estimates of retail price differences between 11 Canadian cities in all 10 provinces, as of October 2007. These estimates are based on a selection of commodities (goods and services) purchased by consumers in each of the 11 cities.

These estimates should not be interpreted as a measure of differences in the cost-of-living between cities. The indexes provide price comparisons for a selection of commodities only, and are not meant to give an exhaustive comparison of all goods and services purchased by consumers. Additionally, the shelter price concept used for these indexes is not conducive to making cost-of-living type comparisons between cities (see below).

Methodology

In order to produce optimal Inter-city indexes, commodity comparisons were initially made by pairing cities that are in close geographic proximity. The resulting price level comparisons were then extended to include comparisons between all of the cities, using a chaining procedure. The following initial pairings were used:

Reliable Inter-city price comparisons require that the selected commodities be very similar across cities. This ensures that the variation in index levels between cities is due to pure price differences and not to differences in the attributes of the commodities, such as size and/or quality.

Within each city pair, commodity price quotes were matched on the basis of detailed descriptions. Whenever possible, commodities were matched by brand, quantity and with some regard for the comparability of retail outlets from which they were selected.

Additionally, the target prices for this study are final retail prices and as such, include all sales taxes and levies applied to consumer commodities within a city. This can be an important source of variation when explaining differences in inter-city price levels.

It should be noted that price data for the Inter-city indexes is drawn from the sample of monthly price data collected for the Consumer Price Index (CPI). Given that the CPI sample is optimized to produce accurate price comparisons through time, and not across regions, the number of matched price quotes between cities can be small. It should also be noted that, especially in periods when prices are highly volatile, the timing of the commodity price comparison can significantly affect city-to-city retail price relationships.

The weights used for aggregating the city indexes into the all-items Inter-city index are based on the expenditures of consumers living in each of the 11 cities. The weights are currently based on 2005 consumer expenditure data.

The all-items Inter-city index for a particular city is compared to the average of all 11 cities, which is equal to 100. For example, an index value of 102 for a particular city means that prices for the measured commodities are 2% higher than the weighted, combined city average.

Additional Information on Shelter

Shelter prices were absent from the Inter-city index program prior to 1999 because of methodological and conceptual issues associated with their measurement. The diverse nature of shelter means that accurate matches between cities are often difficult to make.

To account for some of these difficulties, a rental equivalence approach is used to construct the Inter-city price indexes for owned accommodation. Such an approach uses market rents as an approximation to the cost of the shelter services consumed by homeowners in each city. It is important to note that this approach may not be suitable for the needs of all users. For instance, since the rental equivalence approach does not represent an out-of-pocket expenditure, the indexes should not be used for measuring differences in the purchasing power of homeowners across cities.

Footnotes for Table 15

1. The weights shown are rounded 2005 basket weights at April 2007 prices for Canada. They are provided for illustration only; the weights actually used are combined city weights with adjustments for price changes up until October 2007.
2. Includes the following subgroups: sugar and syrup, confectionery items, margarine, other edible fat and oil items, coffee, tea, condiments, spices and vinegar, soup, infant and junior foods, pre-cooked frozen food preparations, non-alcoholic beverages and all other food preparations.

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