Skip to content
Canajun Finances Home » Zap Electricity Prices Pushes Inflation in June 2016

Zap Electricity Prices Pushes Inflation in June 2016

Stats Canada announced on Friday their monthly CPI report for June 2016, with the following two points (no mention of the zap electricity part of things):

  • The Consumer Price Index (CPI) rose 1.5% in the 12 months to June, matching the gain in May.
  • Excluding gasoline, the CPI was up 1.9% year over year in June, matching the increase in May.

This cursory overview suggests things are as usual in terms of inflation, however, if you read the detailed June Report, (about the Inflation Rate in Canada) you see a few more telling truths (to turn your financial stomach).

I like this part of the detailed report where we find out what major parts of the categories are contributing to higher prices, the electricity zap is quite noticeable.

Main upward contributors:

  1. Purchase of passenger vehicles (+5.6%)
  2. Electricity (+6.9%)
  3. Homeowner’s replacement cost (+3.5%)
  4. Food purchased from restaurants (+2.6%)
  5. Air transportation (+5.1%)

Main downward contributors:

  1. Gasoline (-8.5%)
  2. Natural gas (-12.5%)
  3. Mortgage interest cost (-1.3%)
  4. Fuel oil (-13.2%)
  5. Dairy products (-2.1%)

As usual we see that Fossil Fuels are big downward contributors (although now in Ontario, we will have a Carbon Tax, which will then have the HST on top of it, so that might change here).

zap electricity Inflation in Canada with and without Gasoline
The 12-month change in the Consumer Price Index (CPI) and the CPI excluding gasoline

Bank of Canada’s core index:

The Bank of Canada’s core index increased 2.1% in the 12 months to June, matching the rise in May.

The Bank of Canada has been saying that inflation is “under control” (for now), but my guess is the fragility of the world economy (and Canadian economy) will continue to keep interest rates lower (for now).

Reports from the Past While.

If you want to have a walk down memory lane about how prices have gone up, here you go.

Feel Free to Comment

  1. Anyone really looking at his cost of living will realize that the 2.1% gov’t inflation rate does not apply to every day costs.

    The university article and this one just reinforces the need to find an investment strategy which will generate real income, not just paper gains. I feel fortunate that I’m not forced to live on a fixed income (as we don’t have a work pension). Dental costs up 8%, property taxes 4%, groceries 8%, utilities Up, insurance Up, the majority of others up. Even gas only stayed down a short period and does not make up a large portion of annual expenses. Even during 2008\2009 my annual income rose and has continued to go up each year, while portfolio market value dropped 35% and took years to recover. My portfolio value has followed dividend growth, but took a while to recover from fin crisis.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Verified by MonsterInsights