The Consumer Price Index dropped 0.2% in April over a 12-month period, reported Statistics Canada. This marks the first 12-month CPI decrease since September 2009, the agency stated. The major contributing factor to this drastic decline was the decrease in energy prices across the board because of the COVID-19 pandemic. The CPI actually increased by 1.6%, excluding the index for energy. On a seasonally adjusted basis, the CPI dipped 0.7% for the month of April.
Food prices soared in April increasing 3.4%, which was the largest rise of any major index, reported Stats Can. Canadian consumers paid substantially more for staples items in particular. Over the past year, the price of rice rose 9.2%, eggs increased by 8.8%, and the price for margarine rose 7.9%. The price of certain meats such as pork and beef also posted significant increases, rising 9% and 8.5%, respectively on a year-over-year basis.
Additionally, Statistics Canada reported an increase in the index for household cleaning supplies, which edged up 4.6%. Likewise, the index for paper supplies (which includes toilet paper) rose 6%. The agency stated that this was the largest monthly rise of the paper supplies index on record.
The price of gasoline plummeted a staggering 39.3% in April, compared to this time last year. Statistics Canada stated that this was the largest 12-month drop on record. The agency reported that the decline was due to the repercussions of the Coronavirus pandemic, in addition to an oversupply of oil due to geopolitical tensions between major oil-producing nations.
Statistics Canada released a statement regarding the impact of the COVID-19 pandemic on its data collection.
“Statistics Canada continues to monitor the impacts of the novel coronavirus (also known as COVID-19) on Canada’s Consumer Price Index (CPI). During the month of April, measures were in place across the country to restrict the movement of people and order the temporary closure of businesses. Subsequent 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 April 2020, select sub-components of the CPI received temporary special imputations. Some goods and services were unavailable for consumption in April. The following sub-indexes were imputed from the monthly change in the all-items index: some components of child care services; housekeeping services; personal care services; travel tours; spectator entertainment; and use of recreational facilities. These imputations have the effect of removing the impact of these goods and services on the CPI. Although prices for airfares were collected prior to the suspension of flights, prices for suspended flights are excluded from the April CPI calculation because passengers were ultimately unable to consume them. As a result, select sub-components of the air transportation index were imputed from the parent index. The indexes, beer served in licensed establishments, wine served in licensed establishments, and liquor served in licensed establishments were imputed from indexes to which consumers likely redirected these 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.”