Consumer Price Index

Consumer Price Index, a monthly measure of changes in the retail prices of goods and services purchased by Canadians in communities of 30 000 or more across the country. The index is based on the shopping "basket" of 375 goods and services (excluding commodities for personal benefit, eg, education or health care, which are financed by government) which, in 1967, families of 2-6 people with annual incomes of $4000-$6000 would buy. The index is also "weighted," emphasizing price changes in food and housing. The weights attached to each commodity group are periodically updated to reflect changes in Canadians' buying patterns. The CPI is published monthly for Canada and for 15 major cities, using 1986 as a base year (1986=100). The base year changes about every 10 years. The CPI in Canada has risen dramatically but erratically since WWII - 50% from 1945 to 1951; 50% from 1951 to 1971; 137% from 1971 to 1981; 32.4% from 1981 to 1986 and 30.4% from 1986 to 1993. The value of the CPI in December 1993 was 130.4, indicating that one dollar in 1993 would purchase 76.6 cents worth of goods in 1986. Generally, the CPI is used in cost-of-living allowance clauses and in indexing of income taxes and social-security benefits.