Analysis
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The Consumer Price Index (CPI) rose 2.4% in the 12 months to June, following a 2.3% increase in May.
12-month change in the major components
Prices increased in all major components in the 12 months to June. Higher prices for shelter, food and transportation contributed the most to the rise in the CPI.
Shelter costs rose 2.9% on a year-over-year basis in June, following a 3.4% increase in May. Consumers paid more for natural gas and property taxes in June compared with the same month a year earlier. Prices for electricity rose 4.2% in the 12 months to June, a slower increase than in May (+7.0%).
Food prices increased 2.9% in the 12 months to June, after advancing 2.3% in May. Prices for food purchased from stores rose 3.2% year over year in June, following a 2.5% gain the previous month. Consumers paid 9.4% more for meat and 9.5% more for fresh vegetables. Prices for food purchased from restaurants increased 2.3% on a year-over-year basis in June.
The transportation index increased 2.2% year over year in June, following a 2.7% rise in May. Gasoline prices advanced 5.4% in the 12 months to June, after increasing 6.3% in May. As well, prices for the purchase of passenger vehicles rose 1.6% on a year-over-year basis in June, following a 2.0% increase the previous month.
Prices for clothing and footwear rose 1.6% in the 12 months to June, after posting a 0.6% gain in May. This faster increase was largely attributable to fewer discounts observed this June compared with the same month a year ago.
The index for alcoholic beverages and tobacco products increased 4.1% in the 12 months to June. This rise was mainly attributable to a 10.3% year-over-year advance in cigarette prices. Quebec’s tobacco tax increased in June. Previously in 2014, the federal excise tax on tobacco, as well as the tobacco taxes in Newfoundland and Labrador, Ontario and British Columbia increased.
12-month change in the provinces
Consumer prices rose in all provinces in the 12 months to June. Ontario posted the largest increase, while Quebec recorded the smallest.
In Ontario, consumer prices rose 3.0% in the 12 months to June, following a 2.8% gain in May. Among the provinces, Ontario recorded the largest year-over-year price increases for natural gas (+38.4%) and gasoline (+9.4%) in June.
Quebec’s CPI increased 1.7% on a year-over-year basis in June. The indexes for natural gas, clothing, and homeowners’ home and mortgage insurance rose at slower year-over-year rates in Quebec compared with Canada as a whole in June.
Seasonally adjusted monthly Consumer Price Index increases
On a seasonally adjusted monthly basis, the CPI increased 0.3% in June, marking the eighth consecutive rise. The June increase followed a 0.2% advance in May.
Six of eight major components increased on a seasonally adjusted monthly basis in June. The indexes for shelter as well as health and personal care were the exceptions.
The seasonally adjusted index for transportation (+0.8%) posted the largest monthly rise. Before seasonal adjustment, the transportation index rose 0.3%, led by a 2.0% gain in gasoline prices.
The clothing and footwear index increased 0.5% in June on a seasonally adjusted monthly basis, while on an unadjusted basis this index declined 1.9%. This indicates that the decrease in clothing and footwear prices was smaller than the usual seasonal decline for June.
The seasonally adjusted food index rose 0.5% in June. On an unadjusted monthly basis, prices for both fresh vegetables (+3.5%) and meat (+1.5%) rose more this June compared with the price changes typically observed for these components in June.
Non-seasonally adjusted monthly Consumer Price Index increases
On a monthly basis and before seasonal adjustment, the CPI rose 0.1% in June, after increasing 0.5% in May.
Prices for traveller accommodation advanced 5.4% and the cost of telephone services rose 1.2% between May and June. In contrast, consumers paid less for clothing (-2.3%), electricity (-2.5%) and for the purchase of passenger vehicles (-0.6%).
Consumer prices fell in seven provinces on a monthly basis in June, with the largest decline occurring in Alberta (-0.4%). Of the three provinces recording monthly price increases, Ontario (+0.3%) posted the largest rise.
Bank of Canada’s core index
The Bank of Canada’s core index rose 1.8% in the 12 months to June, after increasing 1.7% in May.
On a monthly basis and before seasonal adjustment, the core index declined 0.1% in June. This followed a 0.5% increase the previous month.
The seasonally adjusted core index rose 0.2% on a monthly basis in June, matching the increase in May.
Note to readers
A seasonally adjusted series is one from which seasonal movements have been eliminated. Users employing Consumer Price Index (CPI) data for indexation purposes are advised to use the unadjusted indexes. For more information on seasonal adjustment, see Seasonally Adjusted Data - Frequently Asked Questions.
The Bank of Canada’s core index excludes eight of the CPI’s most volatile components (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) as well as the effects of changes in indirect taxes on the remaining components.
The travel tours index, which is part of the recreation, education and reading major component, underwent a methodology update effective with the September 2013 CPI. Therefore, until the release of the September 2014 CPI, the 12-month rate of change for this index should be interpreted with caution as it compares periods before and after the update.
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