Consumer prices rose 2.7% in the 12 months to July, primarily the result of higher prices for gasoline and food purchased from stores. This follows a 3.1% increase in June and a 3.7% advance in May.
On July 1, 2010, the Harmonized Sales Tax (HST) came into effect in Ontario and British Columbia. As well, Nova Scotia increased its HST by two percentage points. July 2011 marks the first month for which the calculation for the 12-month rate of change in consumer prices compares two months which both include the July 2010 tax changes.
Energy prices advanced 12.9% during the 12 months to July, following a 15.7% increase in June. On a year-over-year basis, gasoline prices rose 23.5%, compared with the 28.5% gain in June. In contrast, natural gas prices fell.
Food prices rose 4.3% in the 12 months to July, matching the increase in June.
Excluding food and energy, the Consumer Price Index (CPI) increased 1.2% in the 12 months to July, after advancing 1.4% in June.
Seasonally adjusted monthly CPI increases
On a seasonally adjusted monthly basis, consumer prices increased 0.1% from June to July, following a 0.3% decrease from May to June. The transportation index, which includes gasoline, remained unchanged following a 2.4% decline in June.
The seasonally adjusted food index continued to rise in July, increasing 0.5% after advancing 0.3% in June. The shelter index rose 0.4% while the recreation, education and reading index increased 0.2%.
12-month change: Prices for most major components advance at a slower rate
On a year-over-year basis, prices for most major components increased at a slower rate in July. The changes in the transportation index and the food index were the main contributors to the advance in the CPI.
The cost of transportation rose 6.5% in the 12 months to July, following a 7.0% gain in June. In addition to paying more for gasoline, consumers paid more in passenger vehicle insurance premiums and for air transportation. Prices for the purchase of passenger vehicles fell 1.0%.
While the increase in food prices remained unchanged, prices for food purchased from stores rose 5.1% in the 12 months to July after advancing 4.8% in June. Compared with July 2010, consumers paid more in July 2011 for meat, fresh vegetables, bakery products, and fresh fruit. They also paid 2.2% more for food purchased from restaurants.
Shelter costs rose 1.3% in the 12 months to July, following a 1.7% increase in the previous month. In addition to fuel oil, consumers paid higher prices for homeowners' replacement cost, and homeowners' home and mortgage insurance. They paid less in mortgage interest cost (-1.9%) and for natural gas (-3.3%).
Provinces: Prices increase at a slower rate in several provinces
In the 12 months to July, consumer prices increased at a slower pace than in the previous month in six provinces.
On a year-over-year basis, price increases ranged from 1.7% in British Columbia to 3.8% in New Brunswick. In most provinces, higher gasoline prices were the main contributors to the advance. Price increases for food purchased from stores were also an important factor in several provinces.
In Ontario, consumer prices rose 3.0% in the 12 months to July, after advancing 3.6% in June. Gasoline prices rose 25.5%, prices for food purchased from stores went up 6.3% and prices for passenger vehicle insurance premiums increased 8.1%. Prices for electricity fell.
Consumer prices in Quebec increased 3.3%, following a 3.0% gain in June. Consumers paid more in July than a year earlier for gasoline (+27.6%), for food purchased from stores (+4.3%), and for food purchased from restaurants.
In British Columbia, prices rose 1.7% in the 12 months to July, following a 2.7% increase in June. Gasoline prices rose 13.1% while prices for food purchased from stores increased 4.9%. Consumers in the province also paid more in homeowners' home and mortgage insurance. Food purchased from restaurants increased 2.3% after rising 8.8% in June.
In Alberta, prices advanced 1.9% in July after increasing 2.1% in June. Consumers paid 23.0% more for gasoline and 4.1% more for food purchased from stores. The cost of homeowners' home and mortgage insurance also went up.
Bank of Canada's core index
The Bank of Canada's core index advanced 1.6% in the 12 months to July, following a 1.3% gain in June.
On a month-over-month basis and before seasonal adjustment, the core index increased 0.2% in July after decreasing 0.6% in June.
The seasonally adjusted monthly core index increased 0.3% in July, after declining 0.3% in June.