It continues to be more expensive to eat in Canada, and worse, it is really expensive to eat healthy, which is what we found out on Friday from Stats Canada when they published their Consumer Price Index for February 2016 report. As usual the report starts with an optimistic statement:
The Consumer Price Index (CPI) rose 1.4% in the 12 months to February, after increasing 2.0% in January.
However, as we have learned the devil is in the details of the report, and those very interesting details you find in, The Consumer Price Index (62-001-X), which has a lot more interesting details. That report has a much more interesting detailed set of highlights which include:
Main upward contributors:
- Purchase of passenger vehicles (+5.0%)
- Fresh vegetables (+17.2%)
- Electricity (+6.3%)
- Fresh fruit (+14.4%)
- Food purchased from restaurants (+2.7%)
Main downward contributors:
- Gasoline (-13.1%)
- Natural gas (-15.3%)
- Women’s clothing (-2.9%)
- Mortgage interest cost (-1.4%)
- Fuel oil (-19.3%)
Fresh fruit and vegetables are always more expensive in the winter, but this is a little more than just that. The other one I keep noticing is the price of electricity keeps going up. Given it seems to be the energy of the future, I keep wondering what is driving the price up? Here in Ontario it can be attributed to bad choices by Ontario Hydro that we are all having to pay off, but is this seen everywhere else?
The other head scratcher for me is given everyone says we are in a “housing bubble” why isn’t Shelter a bigger contributor. Shelter was only up 1.2% year over year? That seems odd to me. Even odder are some of the components
- Owned accommodated is up 1.8% (year over year), however as part of that there are lower mortgage rates.
- Home and Mortgage insurance is up 6.5% year over year? I can attest to that one, just got my updated insurance for the year, holy cow!
- Property tax and special charges are up 3.0%, again, no surprise for me, not that I like it.
- Maintenance and repairs are up as well at 3.5%
- Lower heating costs (much lower) is what is causing the ownership rate to be so low
So owning a home is getting much more expensive, not just the price of buying a house. Seems to point to the “Renting may not be a bad idea” argument.
We all know that what the Bank of Canada thinks about inflation is important.
Bank of Canada’s core index
The Bank of Canada’s core index increased 1.9% in the 12 months to February, after rising 2.0% in January.
This suggests that inflation will not be cited as a reason to raise interest rates, but that doesn’t mean the rates aren’t going to go up (soon).
Reports from the Past While.
If you want to have a walk down memory lane about how prices have been going up, here you go.
- Veggies up 18.2 pct in Canada for January
- Food Prices up 4.1% For 2015 in Canada
- Gas Prices Drive Down Inflation in December to 1.5%
- Lower Prices in January in Canada, Pull the Other Leg
- Expensive Food in Canada in March
- Prices up 0.8% in April or More Fun with Numbers
- Inflation at 0.9% for May (maybe)
- Gas Dampens CPI for July
- Inflation and Silly Gasoline Tricks Continues in August
- Canadians Paid 3.9% More For Food in September
- Canadians Paid Even More For Food in October (4.1%)
- Food Prices Up 3.4% In November
This is even more reason why you need to keep an eye on your budgets and make any amendments as necessary.