The Consumer Price Index (CPI) increased 2.2% on a year-over-year basis in March, up from the 1.1% rise seen in February, reported Statistics Canada.
“A significant proportion of this increase was attributable to a steep decline in prices in March 2020, as the monthly CPI rose 0.5% in March 2021,” explained Stats Can in its report.
Excluding energy, the CPI increased 1.1% on a year-over-year basis. In March, the CPI edged up 0.1% on a seasonally adjusted monthly basis.
The price of gasoline was the major factor contributing to the increase in energy prices seeing a 35.3% rise since this time last year. Statistics Canada stated that this was the largest increase in the price of gas since March 2000.
“The price increase was mainly driven by growing global oil demand, as well as the continuation of production cuts by the Organization of the Petroleum Exporting Countries Plus. The price increase was mainly driven by growing global oil demand, as well as the continuation of production cuts by the Organization of the Petroleum Exporting Countries Plus. Lower prices for gasoline in March 2020 also contributed to the year-over-year increase in March 2021 as a result of the base-year effect. Crude oil prices fell significantly at this time in the previous year as demand for oil dropped because of COVID-19 lockdown measures, leaving an oversupply in the market. As this historical year-over-year decrease ceased to impact the 12-month movement, an additional temporary upward effect influenced the pace of the year-over-year increase in the gasoline index this March.,” indicated Statistics Canada.
In March, alone with the transportation index (+7.1%), the shelter index increase by 2.4% year-over-year was the largest contributor to the rise in CPI. The homeowners’ replacement cost index, which correlates to new home prices, rose 7.9% since this time last year.
Statistics Canada released a statement pertaining to the COVID-19 pandemic and CPI.
“Statistics Canada continues to monitor the impacts of the novel coronavirus (also known as COVID-19) on Canada’s Consumer Price Index (CPI). Goods and services in the CPI that were not available to consumers in March because of COVID-19 restrictions received special treatments, effectively removing their impact on the monthly CPI. The following sub-indexes were imputed from the monthly change in the all-items index: travel tours, components of spectator entertainment, recreational services, personal care services in some areas, and some components of use of recreational facilities and services in some areas. The price indexes for beer served in licensed establishments, wine served in licensed establishments and liquor served in licensed establishments were imputed in several regions, using the indexes to which consumers likely redirected their expenditures: beer purchased from stores, wine purchased from stores, and liquor purchased from stores. Consistent with previous months affected by the COVID-19 pandemic, prices for suspended flights are excluded from the March CPI calculation because passengers were ultimately unable to consume them. As a result, selected sub-components of the air transportation index were imputed from the parent index (air transportation). Detailed documentation is available in the “Technical Supplement for the March 2021 Consumer Price Index,” within the Prices Analytical Series (62F0014M). It provides further details on the imputations used to compile the March 2021 CPI.”