Good afternoon, Mr. Chair and members of the finance committee. I'm pleased to be here with Mr. Peterson and Ms. Ertl today.
Canada and the world are continuing to respond to the COVID‑19 pandemic, and the role of Statistics Canada and evidence-based information is more important than ever to support Canadians.
We take our responsibility of providing high-quality data and insights to policy-makers and decision-makers very seriously. Despite the challenges of direct collection with households and businesses, we have never provided more timely, detailed or integrated statistics.
The CPI, or consumer price index, one of the most important and impactful indicators, continues to be a reliable and robust mechanism to convey the impact of the pandemic on consumer inflation and our changing consumption patterns. We’ve all noticed that gas prices initially plunged and subsequently surged, rising 43.6% compared with November 2020. Our food costs are 4.4% higher. Every trip to the grocery store reminds us of the impacts of weather events and supply disruptions, as consumer prices adjust to higher shipping costs, higher input costs and, generally, people eating at home instead of at restaurants. New home prices and resale prices are both up significantly year over year.
Inflation, or the rate at which prices change over time, is not always easy to measure or interpret, but we all notice it and the CPI is key to understanding it. Employers use the CPI to make cost-of-living adjustments in wages and salaries, and governments use it to adjust income taxes and such social benefits as the CPP and old age security.
The CPI is an essential tool for setting and evaluating economic policies, particularly for the Bank of Canada. It has been used to monitor Canada's economy since it was created in 1914.
Aligning with the concepts and standards set by international bodies, the CPI is an extremely robust statistical indicator that's reviewed and enhanced regularly under the guidance of experts at Statistics Canada's prices division. From widespread global supply chain constraints to shifting and pent-up consumer demand and being able to shop, dine and travel more last year than in 2020—all of it impacted our inflation rate, which reached 4.7% in November of 2021.
As part of the broader trend during the pandemic, Canadian consumers sought to improve their immediate surroundings with such items as furniture, appliances and passenger vehicles, which were impacted by higher demand as well as global shortages of semiconductor chips. More living space and outdoor amenities also became popular, which, coupled with historically low interest rates and higher building costs, pushed the costs of home ownership higher in Canada.
The CPI captures these changes from month to month to measure changes in the average prices for Canadian consumers based on the cost of a fixed basket of goods and services.
Imagine a shopping basket that is filled with the same quantity of the same products every month. The products in the basket include groceries, electricity and water rates, haircuts, and so on. Monitoring the cost of these products over time measures the pure price change.
Society and Canadians' purchasing patterns change over time and so does our basket. For example, instead of including the price of a record player or eight-track, today's basket includes items such as smart phones and computers.
In an effort to improve and identify changing spending patterns faster in response to the pandemic, we moved the annual updates to the basket weights. Grocery prices are now mostly collected using point-of-sale data, the data that are generated when the item is scanned, drawing directly on Canadians' transactions at the store. This is the highest-quality data available and ensures that the prices collected are what we actually pay in a given month, including sales and specials.
We've added such new tools as the personal inflation calculator, partnered to develop complementary products, conducted seminars and workshops, and enriched our outputs with greater analysis. We continue to experiment, enhance and support our collective understanding so that the CPI and other measures can stimulate good debate and ultimately allow good decisions, which impact us all.
My colleagues and I would be glad to take any questions.
Thank you very much.