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July 28, 2021ANALYSIS OF NOVA SCOTIA'S CONSUMER PRICE INDEX FOR JUNE 2021 TRENDS – June 2021
Nova Scotia’s All-Items Consumer Price Index (CPI) increased 4.1% year-over-year in June 2021, following the 4.8% increase in May. Nationally, consumer prices were up 3.1% from a year earlier, following a 3.6% gain in May 2021.
Statistics Canada noted that the national year-over-year increase recorded in June was led by rising prices for shelter and transportation but the slower pace was due in part to slowdown in goods price growth - including in clothing and footwear. Gasoline prices increased at a slower price with a diminished base-year effect as it rose 32.0% year-over-year in June compared to the 43.4% increase last month. Shelter costs (+4.4%) increased in June driven by homeowners' replacement cost index and other owned accommodation expenses index rising and mortgage interest costs down. Vegetable prices fell for the fourth consecutive month in part due to rising supply amid favourable weather in growing regions. Smartphones and cellular service prices were lower than June 2020 with industry-wide promotions.
The global shortage of semiconductor chips contributed to higher year-over-year prices in passenger vehicles (+4.1%) and household appliances (+5.2%).
Basket Update
With this month's release the CPI basket of goods and services has been updated. The new basket weights are based on 2020 expenditure data, in which spending would reflect pre-pandemic patterns (Jan-Feb), an economy mostly in lockdown (March-June), and the emergence of new consumption patterns as economy re-opened (July-December). Statistics Canada notes that the "The data reflect shifts in spending due to the COVID-19 pandemic that will likely take some time to stabilize across goods and services, and geographic regions" and the June 2021 headline CPI for Canada would be the same if the previous basket weights (2017) were used. The weights for shelter (+2.86 percentage points), households operations, furnishings and equipment (+2.23 percentage points), and alcoholic beverages, tobacco products and recreational cannabis (+1.7 percentage points) are higher in the 2020 basket while transportation had the largest decline falling from a 19.72% share to 15.34% share. New products classes were added for shipping fees and local delivery fees (including restaurant and grocery delivery fees), digital subscriptions services to magazines, and video game consoles. Further information on the update can be found in
An Analysis of the 2021 Consumer Price Index Basket Update, Based on 2020 Expenditures
Impact of COVID-19 on the Consumer Price Index
Statistics Canada continued special CPI program measures for June 2021. Due to COVID-19 impact on product availability, select sub-components of the CPI received temporary special imputations. The sub-indexes for travel tours, some components of spectator entertainment, recreational services, personal care services in some areas, and some components of use of recreational facilities and services in some areas were imputed from the monthly change in the all-items index - effectively removing the impact of these goods and services on the CPI. The price indexes for beer, wine and liquor served in licensed establishments were imputed in several regions, using the indexes to which consumers likely redirected their expenditures: beer, wine and liquor purchased from stores.
Prices increased year-over-year in all provinces led by Prince Edward Island (+5.3%). Saskatchewan had the slowest growth (+1.8%). All provinces experienced slower year-over-year CPI inflation in June than May. Compared to the previous month, all provinces had increases in the CPI index in June 2021.
The main contributors to the monthly change (June 2021 vs May 2021) in Nova Scotia CPI were:
- Homeowners' replacement cost (+1.9%)
- Homeowners' home and mortgage insurance (+4.1%)
- Gasoline (+1.2%)
- Telephone services (-4.5%)
- Internet access services (-4.8%)
- Home entertainment equipment, parts and services (-5.3%)
The main contributors to the yearly change (June 2021 vs June 2020) in Nova Scotia CPI were:
- Gasoline (+43.4%)
- Fuel oil and other fuels (+46.2%)
- Homeowners’ replacement cost (+16.2%)
- Telephone services (-16.6%)
- Mortgage interest cost
- Traveller accommodation (-10.9%)
Nova Scotia’s consumer price inflation (year-over-year) excluding food and energy increased 2.1% in June 2021. Consumer prices excluding food and energy were up in all provinces led by Quebec (+3.2%) and Prince Edward Island (+2.8%). Saskatchewan had the lowest increase at 0.7%.
The CPI for food in Nova Scotia increased 1.6% year-over-year in June 2021. Nationally, food prices were up 1.3% from a year earlier. All provinces recorded year-over-year increase in food prices led by Alberta (+2.2%). Quebec and Manitoba had the lowest increase at 0.9%.
Nova Scotia energy prices increased 26.7% year-over-year in June 2021 compared to the national average of 19.5%. All provinces reported double digit increases in energy prices. The year-over-year change in Nova Scotia’s and other Atlantic provinces' CPI is more exposed to the effects of changes in oil prices on inflation due to a larger use of fuel as a source of home heating compared to other provinces.
Year-over-year, shelter costs in Nova Scotia increased 5.8% in June 2021, above the national average increase of 4.4%. Compared to June 2020, shelter prices were up in all provinces with the largest increase in Prince Edward Island (+11.4%) and the smallest increase in Saskatchewan (+0.6%).
Nova Scotia's consumer price inflation (year-over-year growth in CPI) excluding energy was 2.1% in June compared to a national rate of 2.0%. Quebec (+2.7%) posted the largest year-over-year gain while the CPI excluding energy had the smallest change in Saskatchewan (+0.9%).
Major Components for June 2021
The following table shows the price increases specific to Nova Scotia for the major components of the CPI this month:
Long Run Trends
In June 2021, the All-Items CPI year-over-year inflation rate for Nova Scotia was 4.1%, above Canada's average rate at 3.1%. Month-to-month movements in the indices can be different, over time they generally follow the same overall trend. Nova Scotia’s all-items CPI increase of 4.8% in May 2021 was the largest increase since March 2003 (+6.9%).
Nova Scotia’s all-items CPI excluding food and energy increase of 2.1%, falling from the 2.8% increase the previous month. Canada CPI excluding food and energy had a smaller decline compared to last month with a 0.2 percentage points to 2.2%.
Bank of Canada's preferred measures of core inflation
Compared to June 2020, CPI-Common increased 1.7%, CPI-Median increased 2.4% and CPI-Trim was up 2.6% in Canada. All-items CPI excluding eight of the most volatile components as defined by the Bank of Canada and excluding the effect of changes in indirect taxes (formerly referred to as CPIX), rose 2.7% year-over-year. The change in the core inflation measures were down 0.1 percentage point for CPI-common, up 0.1 percentage point for CPI-median and unchanged for CPI-trim.
Appendix Tables and Charts
Source: Statistics Canada. Table 18-10-0004-01 Consumer Price Index, monthly, not seasonally adjusted; Table 18-10-0256-01 Consumer Price Index (CPI) statistics, measures of core inflation and other related statistics - Bank of Canada definitions
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