Canadians Paid Even More For Food in October (4.1%)

Different Government same story for Inflation in Canada in October, as reported by our friends at Stats Canada. With Gasoline prices down 17.1% year over year, the real inflation rate published is 1.0%, for the 12 months, however, the clarification in the report helps understand about food:

Food prices were up 4.1% year over year in October, after increasing 3.5% in September. This acceleration was attributable to higher prices for food purchased from stores, which increased 4.6% year over year in October, after rising 3.9% the previous month. Prices for fresh fruit increased more in the 12 months to October (+13.0%) than in September (+8.5%). In addition, the dairy products index increased year over year in October, following a decrease the previous month. Prices for food purchased from restaurants were up 2.7% year over year.

Sad to see that healthy food is really going up in price these days. As I have said previously, not that many folks eat Gasoline, and now they are eating less healthy food too (especially if they have fixed incomes). With the dollar dropping in value, the pressure on the Price Index is only getting worse.

CPI for past 5 years

Consumer Price Index for Past 5 Years

That graphic might give you hope, but the following sums it all up far too well, just look at how everything is up, but thanks to lower gas prices, inflation seems low.

Inflation by sector

Inflation by sector compared to last month

Bank of Canada’s core index

The Bank of Canada’s core index was up 2.1% which is unchanged from last month, so the Bank of Canada thinks inflation is higher. (according to their Operational Guide )

Operational Guide

Reports from Previous Months in 2015


Canadians Paid 3.9% More For Food in September

That is really what the headlines should have read from the Stats Canada Consumer Price Index Report for September 2015, instead it read the total CPI is 1.0%, thanks to cheaper gasoline. The whole report starts off optimistically with the following statement:

The Consumer Price Index (CPI) rose 1.0% in the 12 months to September, after increasing 1.3% in August.

The smaller year-over-year increase in the CPI in September compared with August was mostly attributable to an 18.8% year-over-year decline in gasoline prices in September, following a 12.6% decrease the previous month.

Reading that you are thinking rainbows, unicorns and how wonderful things are, until you read the following statement:

Consumers paid 3.5% more for food in September compared with the same month a year ago. Prices for food purchased from stores were up 3.9% year over year in September. Prices for fresh vegetables increased more on a year-over-year basis in September (+11.5%) than in August (+7.7%). The meat index rose 4.4% year over year in September, following a 6.3% increase in August. In the 12 months to September, prices for food purchased from restaurants were up 2.7%.

If that doesn’t tighten one of your 5 sphincters, I am not sure what will.

Here is a pretty graph to make  you feel better about how much you are spending on food.

Inflation in Canada for Past While

Inflation for Past Little While

While that might make you feel better and convince you that things are just fine, the following graphic is much better at showing that you really are paying a fair amount more for your “stuff” but thanks to gas no one really cares. Oh and if this makes you want to have a drink of a smoke, that costs more too (OK that is me just whining).

By Category Inflation

By Category inflation

Bank of Canada’s core index

At least the Bank of Canada seems to be getting a little more right? Remember if things get above 3% is when they start thinking about an interest rate change (remember, Interest Rates can go up!).

The Bank of Canada’s core index was up 2.1% in the 12 months to September, matching the increase in August.

Inflation from Bank of Canada

Bank of Canada’s Graphic

Reports from Previous Months in 2015


Inflation and Silly Gasoline Tricks Continues in August

On Friday our friends from Stats Canada published their monthly report on the Consumer Price Index for August 2015, and their findings are similar to those from earlier months in 2015.

The Consumer Price Index (CPI) rose 1.3% in the 12 months to August, matching the increase in July…. Lower energy prices continued to moderate the year-over-year rise in the CPI, led by the gasoline index, which was down 12.6% year over year in August.

So the story continues with many areas rising by a fair amount, while gasoline dampens the overall index.

Consumer Price Index

CPI with and without energy for past 5 years

As you see we are closer to 2.0% inflation, than we are the “actual” 1.3%. Food is up 3.6% (year over year), which impacts most Canadians, but due to Energy and Transport being down 7.2% and 2.3% no one seems to notice that feeding ourselves continues to be an ever-increasing commodity. Doesn’t even seem to be an election issue, haven’t heard anybody talk about it.

This graphic is useful to see how the numbers are skewed:

CPI by category

What was Cheaper and what was more expensive

Bank of Canada’s core index

Just remember that the bank of Canada uses their own data to calculate inflation, and there numbers are more telling:

The Bank of Canada’s core index was up 2.1% in the 12 months to August, following a 2.4% rise in July

CPI from Bank of Canada Graphic

It is interesting that this is really not a topic on the election trail.

Reports from Previous Months in 2015


Gas Dampens CPI for July

For yet another month the lowering price of gasoline and transport continues to dampen (and possibly hide) a CPI that has been around 2.0 % or higher for a long time (yet it continues to be called 1.0%, fun eh?). Stats Canada stated for July:

Lower energy prices continued to moderate the year-over-year rise in the CPI; however, the effect was less pronounced in July than in the previous month. In particular, the gasoline index was down 12.2% in the 12 months to July, compared with a 14.1% decrease in June.

I am sick of how these numbers are being used to hide the fact that inflation is high enough that interest rate controls on them should have been triggered months ago, but due to Canada’s population being Debt Junkies the government is too petrified of what this might entail. The other side of the coin is with oil revenues dropping, and gas prices dropping Canada is paying the price as well.

I am simply being paranoid? Maybe, but if you look at this graph, you will see my statement about 2.0% inflation (without gasoline) is maybe not as much me being paranoid, as being prudent:

CPI for past while

CPI for past little while, with and without energy

I think the center of my vitriolic commentary centers around the numbers is the following statement:

Food prices advanced 3.2% in the 12 months to July, following a 3.4% increase the previous month. Prices for food purchased from stores were up 3.5% on a year-over-year basis in July. The increase in the food index was led by meat prices, which rose 6.1% year over year in July, following a 6.6% increase in June. Additionally, prices were up year over year in July for fresh vegetables and fresh fruit. Prices for food purchased from restaurants rose 2.7% in the 12 months to July.

Food has been over 3% growth for a good long time, and anybody who shops for food knows this, but nothing is being done about it, and the press dismisses it because gas is so darn cheap? You know what really galls me the most? None of the major party leaders have even batted an eye about this.

Bank of Canada’s core index

The nice thing about the Bank of Canada, is their index doesn’t include energy:

The Bank of Canada’s core index was up 2.4% in the 12 months to July, following a 2.3% rise in June.

Food for thought?

The Big Graph

This graphic does an excellent job showing what is really up, and what is keeping the CPi down:


Year over Year CPI

Interesting that Transportation is the only one down?


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Do Canadians Borrow For Wealth ?

The Bank of Canada (and Stats Canada as well) put out a withering barrage of information every month, that I don’t even try to keep up with, but on occasion I am motivated to go over and check things out, and sure enough, this month I found some very interesting information in the Bank of Canada Banking and Financial Statistics June 2015. Be warned this is a PDF file with over 100 pages of tables and data, but the one table that caught my eye was Table C7 : Chartered banks: Quarterly classification of non-mortgage loans  (I have included a somewhat transcribed version at the end of this article).

As with all data, many different lemma, theories and ideas can be implied or inferred, but I will attempt to make two simple comparisons:

  • Borrowed money for investing compared to Car Rentals
  • Investing vs. Funds held on Credit Cards

Here are two harder to read graphs, that show the trends for the past 10 years (including Q1 in 2015), the big table of the real data is at the end of the article (as well).

Credit and Lease Debt

Car Leases and Credit Cards are what we borrow for (not to build wealth)

If you can make out the colours and such, you will see the really big increase in Credit Card and Vehicle Debt over the 10 years and the very small increase in loans to borrow for RRSPs and General investing. I am not really a big fan to borrow to build wealth, and it seems most Canadians don’t think of that, but holy cow, we do want to borrow to buy “things” like Vehicles, Mobile Homes and “stuff” on our Credit Cards.

The numbers are telling:

  • Private Passenger vehicle loans in 2005 were about $15,577,000,000 but now they are $72,961,000,000 almost quintupled over 10 years (2 complete doublings)
  • For Credit Cards $38,922,000,000 in 2005 but by 2010 $75,738,000,000 almost 1 complete doubling in 10 years.

What does this really mean? I guess we Canadians love our cars, love our stuff, and are wary of borrowing money to invest? (yes an over simplification, but the numbers do seem to point in that direction.

 The Big Table from the Bank of Canada

I do suggest having a look at this data on line as well:

Table C7 : Chartered banks: Quarterly classification of non-mortgage loans
Millions of Dollars
Loans to Canadian individuals for Non-Business Purposes
To Purchase Securities To Purchase Consumer Goods and other Personal Services Total
Tax Sheltered plans Marketable stocks and bonds Private Passenger Vehicles Mobile Homes Rennovations of residential properties Other Subtotal Credit Cards Total
V33760 V37759 V37755 V37756 V37757 V37758 V37754 V37753 V37752 V37751
2005 1,262 3,476 15,577 460 2,824 146,231 165,092 38,922 204,014 208,752
2006 1,300 3,714 16,218 422 3,178 158,824 178,642 41,998 220,640 225,654
2007 1,183 3,876 17,311 388 3,721 178,768 200,188 50,638 250,826 255,885
2008 1,099 3,220 23,002 370 4,903 207,126 235,401 53,703 289,103 293,423
2009 1,306 3,531 33,870 372 3,848 235,530 273,620 57,792 331,412 336,249
2010 1,326 3,789 42,095 200 3,618 247,113 293,027 61,325 354,352 359,468
2011 1,242 3,515 49,347 188 3,328 274,229 327,091 81,811 408,902 413,658
2012 1,487 3,521 54,992 242 3,774 285,252 344,260 78,969 423,229 428,237
2013 1,345 3,067 63,862 258 2,569 291,899 358,589 76,886 435,475 439,886
2014 1,070 3,628 71,981 829 3,155 291,750 367,715 79,046 446,761 451,459
2015 QI 1,573 3,713 72,961 814 3,114 291,887 368,775 75,738 444,513 449,799


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