Canada February Consumer Price Index Report (Text)

The following is the text of Canada’s consumer price index report for February released by Statistics Canada.

The Consumer Price Index (CPI) rose 1.2% in the 12 months to February, following a 0.5% advance in January. This 0.7 percentage point increase in the 12-month change was led by transportation prices, which rose 2.0% on a year-over-year basis in February, after falling 0.5% in January.

The rise in the transportation index was attributable to higher prices for gasoline and for the purchase of passenger vehicles, both of which rose in the 12-months to February after declining in January.

Gasoline prices advanced 3.9% year over year in February following a 1.8% decrease in January. On a monthly basis, gasoline prices rose 8.4% in February, the largest monthly increase since May 2008.

The purchase of passenger vehicles index rose 2.5% in the 12 months to February, after declining 0.8% in January. The acceleration in this index was mostly attributable to a notable monthly increase in February. Fewer manufacturers’ rebates were available in February compared with January.

12-month change in the major components

Consumer prices rose in seven of the eight major components in the 12 months to February. The exception was clothing and footwear.

Food prices increased 1.9% on a year-over-year basis in February following a 1.1% rise in January. Consumers paid more for food purchased from stores, particularly meat (+3.1%) and fresh fruit (+6.7%). In contrast, prices for non-alcoholic beverages declined 4.2%.

Consumers also paid 2.2% more for food purchased from restaurants.

Shelter costs rose 0.8% in the 12 months to February, after increasing 0.6% in January. Rent and homeowners’ replacement cost advanced on a year-over-year basis, while mortgage interest cost decreased 4.2%.

Energy prices

Energy prices advanced 2.0% year over year in February, after falling 1.7% in the previous month. In addition to gasoline, prices for fuel oil rose 4.1% on a year-over-year basis in February, following a 0.8% decline in January. Natural gas prices were up 0.6% in the 12-months to February; the first increase since December 2010.

12-month change in the provinces

In all provinces, consumer prices rose at a faster year- over-year rate in February compared with January, led primarily by higher prices for gasoline and for the purchase of passenger vehicles.

The largest increase in consumer prices was in Newfoundland and Labrador, while the smallest occurred in Alberta and British Columbia.

In Newfoundland and Labrador, consumer prices rose 2.3% on a year-over-year basis in February, following a 0.9% advance in January. The province posted year-over-year price increases for electricity, clothing, and passenger vehicle insurance premiums, while at the national level these indexes declined.

Consumer prices in Alberta rose 0.9% in the 12 months to February following a 0.5% decline in the previous month. Natural gas prices increased 20.8% year over year in February. In addition, gasoline prices advanced 3.8% in the 12 months to February, after declining 7.3% in January, a larger acceleration than at the national level.

In British Columbia, consumer prices rose 0.9% on a year- over-year basis in February, after increasing 0.3% in January. The smaller increase in British Columbia’s CPI relative to Canada’s was partly a result of homeowners’ replacement cost, which declined 2.7% in the province.

Seasonally adjusted monthly CPI increases

On a seasonally adjusted (http://www23.statcan.gc.ca:81/imdb/p2SV_e.pl?Function=getSurvey &SDDS=2301&lang=en&db=imdb&adm=8&dis=2#b10) (http://www23.statcan.gc.ca:81/imdb/p2SV_e.pl?Function=getSurvey &SDDS=2301&lang=en&db=imdb&adm=8&dis=2#b10) monthly basis, the CPI increased 0.7% in February after posting no change in January. The February increase was the largest since June 2008.

In February, seven of the eight major components increased. The exception was health and personal care, which registered no change. The seasonally adjusted index for transportation increased 2.4% in February following a 0.1% decline in January. The clothing and footwear index and the food index both rose 0.9% in February.

Bank of Canada’s core index

The Bank of Canada’s core index (http://www.statcan.gc.ca/pub/62-001-x/2013002/technote- notetech2-eng.htm) rose 1.4% in the 12 months to February, following a 1.0% advance in January.

On a monthly basis, the seasonally adjusted core index rose 0.4% in February, after increasing 0.1% in January.

Note to readers

As announced in The Daily (http://www.statcan.gc.ca/daily- quotidien/130125/dq130125b-eng.htm) on January 25, 2013, Statistics Canada has updated (http://www23.statcan.gc.ca/imdb- bmdi/document/2301_D7_T9_V4-eng.htm) the weights in the basket of goods and services used in the calculation of the Consumer Price Index (CPI). This marks the first time in the Canadian CPI’s history that weights were updated two years after the previous update, instead of the four-year interval which was the past practice. In addition, the implementation of the new basket weights has been shortened by three months. As a result, the Canadian CPI has more current and representative weights.

The new weighting pattern (http://www23.statcan.gc.ca/imdb/p2SV.pl?Function=getDocumentati on&Item_Id=137996&TItem_Id=137996&lang=en&db=imd b&adm=8&dis=2) is based on 2011 consumer expenditures and replaces the 2009 weighting pattern. The CPI’s time base remains 2002=100.

For more information, refer to Weights for the Consumer Price Index (http://www23.statcan.gc.ca/imdb/p2SV.pl?Function=getDocumentati on&Item_Id=137999&TItem_Id=137999&lang=en&db=imd b&adm=8&dis=2), Methodology Revisions and Basket updates (http://www23.statcan.gc.ca/imdb/p2SV.pl?Function=getDocumentati on&Item_Id=136886&TItem_Id=136886&lang=en&db=imd b&adm=8&dis=2) and Survey 2301 - Consumer Price Index (http://www23.statcan.gc.ca/imdb/p2SV.pl?Function=getSurvey& SDDS=2301&Item_Id=1565&lang=en) .

Under the CPI Enhancement Initiative, an improved methodology for the passenger vehicle parts, maintenance and repairs index will be implemented with the release of the April CPI on May 17, 2013. For more information, refer to Revision of the Passenger Vehicle Parts, Maintenance and Repairs Index ( http://www23.statcan.gc.ca/imdb-bmdi/document/2301_D54_T9_V1- eng.htm) .

The special aggregate “Energy” includes: electricity; natural gas; fuel oil and other fuels; gasoline; and fuel, parts and supplies for recreational vehicles.

A seasonally adjusted series is one from which seasonal movements have been eliminated. Users employing CPI data for indexation purposes are advised to use the unadjusted indexes. For more information on seasonal adjustment, see Seasonal adjustment and identifying economic trends (http://www5.statcan.gc.ca/bsolc/olc-cel/colc-cel?catno=11-010- X201000311141&lang=fra) .

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.

To contact the reporter on this story: Ilan Kolet in Ottawa at ikolet@bloomberg.net

To contact the editor responsible for this story: Marco Babic at mbabic@bloomberg.net

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