The Consumer Price Index (CPI) edged up 0.7% on a year-over-year basis, reported Statistics Canada. This marks an increase from the 0.4% drop seen in May. Excluding the gasoline index, the CPI increased by 1.2%. In June, the CPI rose 1.0% on a seasonally adjusted monthly basis.
“The year-over-year increase in the CPI for June rose at the fastest pace since March 2011,” explained Stats Can.
Food Index
Both the food and shelter indexes were the largest contributing factors to the increase in CPI, reported the agency. Over a 12-month period, the price of meat rose 8.1%. Specifically, the price of beef increased by 8.3%, marking the highest increase since May 1982, reported Statistics Canada. Conversely, the price for both frozen and fresh chicken dropped 4.4% since this time last year, the largest decrease since November 2004.
Energy Index
In Ontario, electricity prices for June soared 17.2%, since this time last year – the largest percentage increase seen in the province since May of 2003. This was due to the electricity price hike by the Ontario government, implemented at the beginning of the month.
In June, over a 12-month span, the price of gasoline decreased by 15.7%. This marked a smaller decline seen in May (29.8%) on a year-over-year basis.
“Following large price declines in March and April due to the COVID-19 pandemic, gasoline prices declined at a slower pace for the second consecutive month, mainly as a result of higher demand coinciding with the gradual reopening of businesses and public services, as well as a general increase in local travel in June. Higher prices for crude oil also contributed to this slowing decline, as economies around the world continued to reopen,” explained Stats Can.
Statistics Canada released a statement regarding the effects of the COVID-19 pandemic on Canada’s CPI and the collection of data.
“Statistics Canada continues to monitor the impacts of the novel coronavirus (also known as COVID-19) on Canada’s Consumer Price Index (CPI).
In June, measures remained in place across much of the country to restrict the movement of people and order the temporary closure of businesses. Subsequently, in-person field collection was conducted via telephone or Internet, supplementing prices collected via web scraping, transaction data and administrative data. Due to the impact of COVID-19 on product availability in the month of June 2020, select sub-components of the CPI received temporary special imputations.
While some products and services, such as personal care services, started to become available for consumption in June, others, such as spectator entertainment and travel tours, remained unavailable. Availability of goods and services varied throughout the country, as different provinces reopened their economies to various extents at different times. The following sub-indexes were imputed from the monthly change in the all-items index: travel tours; spectator entertainment; and use of recreational facilities. These imputations have the effect of removing the impact of these goods and services from the CPI.
Consistent with previous months of the COVID-19 pandemic, prices for suspended flights are excluded from the June CPI calculation because passengers were ultimately unable to consume these services. As a result, select sub-components of the air transportation index were imputed from the parent index.
The price indexes for beer served in licensed establishments, wine served in licensed establishments and liquor served in licensed establishments were imputed in regions where the restrictions remained in place, using the indexes to which consumers likely redirected their expenditures: beer purchased from stores, wine purchased from stores, and liquor purchased from stores.
Where prices were missing due to high levels of out-of-stock products or the temporary closure of businesses, they were imputed with the average price movement of available prices for those items.”
Source cited: https://www150.statcan.gc.ca/n1/daily-quotidien/200722/dq200722a-eng.htm
Sarah has been writing on the topics of politics, history and finance for over a decade. She is currently an editor at CPI Inflation Calculator, covering the topics of CPI, inflation, US economy and economic commentary.
