Canada: Consumer Price Index, March 2017

The Consumer Price Index (CPI) rose 1.6% on a year-over-year basis in March, following a 2.0% gain in February.

Excluding food and energy, the CPI was up 1.7% year over year in March, after posting a 2.0% increase in February.

12-month change in the major components

Prices were up in five of the eight major components in the 12 months to March, with the transportation and shelter indexes contributing the most to the year-over-year rise in the CPI. The food index and the clothing and footwear index declined year over year, while the price index for household operations, furnishings and equipment was unchanged.

Transportation costs rose 4.6% over the 12-month period ending in March, after increasing 6.6% in February. The increase in transportation costs, as well as the deceleration in the growth of these prices compared with the previous month, was led by the gasoline index. On a year-over-year basis, gasoline prices rose 15.2% in March, following a 23.1% increase in February. The purchase of passenger vehicles index was up 2.1% in the 12 months to March, following a gain of 3.6% in February.

The clothing and footwear index fell 0.9% year over year in March, following a 0.9% increase the previous month. This turnaround was led by a decrease in the women’s clothing index, down 1.0% in March, following a 3.5% increase in February. A larger year-over-year decline in the children’s clothing index (-4.4%) in March, compared with February, more than offset a 0.3% increase in the footwear index.

Consumer prices for food were down on a year-over-year basis for the sixth consecutive month, dropping 1.9% in March. Prices for food purchased from stores declined 3.6% in the 12 months to March. Meanwhile, prices for food purchased from restaurants posted a 2.4% increase.

Shelter cost increases in March matched those of February, up 2.2% on a year-over-year basis. The homeowners’ replacement cost index was the main upward contributor to the 12-month change in the shelter index, up 4.0%, despite slowing growth since November 2016. At the same time, rent increased 0.6% year over year, after posting a 0.5% increase for six consecutive months.

The recreation, education and reading index rose 3.6% in the 12 months to March, following a 3.3% gain in February. This acceleration was led by the travel tours index, up 6.8% in March, following a 0.5% decline the previous month. In contrast, traveller accommodation prices rose less in March than in February.

12-month change in the provinces

In eight provinces, consumer prices rose less on a year-over-year basis in March than in February. The 12-month increase in the CPI in New Brunswick was unchanged from a month earlier, while consumer price growth in Prince Edward Island accelerated year over year in March.

The CPI in Saskatchewan posted a 0.6% gain in the 12 months to March, after increasing 1.4% in February. Traveller accommodation prices fell the most in Saskatchewan (-8.2%) among the provinces on a year-over-year basis in March. At the same time, prices for telephone services declined more in Saskatchewan (-14.3%) than at the national level (-3.1%) in the 12 months to March.

The Government of Saskatchewan increased the Provincial Sales Tax (PST) from 5% to 6%, effective March 23, 2017. For products and services newly subject to PST, the tax change came into effect April 1.

In New Brunswick, consumer prices rose 2.8% year over year in March, matching the gain in February. The gasoline index posted a 20.7% gain in the 12 months to March, following a 21.8% increase in February; this marked gasoline’s smallest contribution to the deceleration in the 12-month change in the CPI among the provinces. The recreational equipment and services index was down less year over year in March than in February.

Consumer prices in Prince Edward Island were up 1.7% on a year-over-year basis in March, following a 1.5% gain in February. The traveller accommodation index rose 5.2% on a year-over-year basis in March, after declining 4.0% in February. In addition, prices for clothing and footwear fell less in March than in February.

On a month-over-month basis, the telephone services index posted increases in all the Atlantic provinces, while posting declines in Western Canada.

Seasonally adjusted monthly Consumer Price Index

On a seasonally adjusted monthly basis, the CPI declined 0.2% in March, after falling 0.3% in February.

In March, three major components decreased on a seasonally adjusted monthly basis and five increased.

On a seasonally adjusted monthly basis in March, the transportation index (-1.1%) posted the largest decline, while the recreation, education and reading index (+0.6%) recorded the largest increase.

StatsCanada

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell