Whenever you pass through the cash register at a grocery store, the price of everything in your shopping cart — from discounted chicken to strawberries on promotion — is collected by the retailer and sent to Statistics Canada.
That’s just one of several ways the data agency tracks the spending reflected in its consumer price index, or CPI: Canada’s most comprehensive measure of inflation.
CPI is broken down into eight categories — called “baskets” — meant to show the average cost of a group of goods and services. There’s a food basket, a transportation basket and a shelter basket, among others.
When taken together, these baskets make up the overall CPI number, or the so-called headline number that you see in our reporting every month. But they each hold a different “weight” in the overall CPI, depending on how much Canadians spend on one basket relative to the others.
Every year, Statistics Canada conducts a review of those categories. After this year’s change, food will now make up a bigger chunk of that overall figure, because Canadians dedicated more of their budgets to food bought in stores and at restaurants in 2023 than they did in the previous year.
Here’s what you need to know about the changes, and how they affect overall inflation.
Why do we break down inflation by basket?
Statistics Canada regularly reviews basket weights to make sure they’re reflective of how much Canadians are spending on goods and services.
“It’s something that we do every year. And the fact that we do it every year is actually beneficial to Canadians because that means that the CPI is based on the most current spending patterns of Canadians,” said Rebecca Lehto, a Statistics Canada consumer price analyst.
Because Canadians spent more on food and dining out in 2023, the weight of the food basket increased (for the second year in a row) from 16.13 per cent of the total inflation number in 2022 to 16.72 per cent in 2023.
Food from grocery stores now accounts for 10.82 per cent of the overall CPI, while food from restaurants increased to 5.90 per cent of that figure, according to Statistics Canada.
The baskets for shelter and health and personal care also increased, while others — like those for transportation, or alcoholic beverages, tobacco products and recreational cannabis — declined in importance.
“This year, we saw the weight of food go up and that was essentially because more people are spending at restaurants again without COVID restrictions or capacity restraints. And it’s also coming from the grocery side,” because prices increased significantly, Lehto said.
What does that mean for inflation numbers?
Each basket has a varied impact on the overall CPI figure. More broadly, items like food or gas are sometimes excluded from inflation measures because their prices can be volatile.
“For example, a five per cent change in gas prices will impact the all-item [consumer price index] more than a five per cent change in milk prices,” because Canadians direct more spending to gas than they do milk, said Lehto.
“Going forward, a larger increase in food will have a larger impact on the all-items CPI.”
That starts with May numbers, which will be released on Tuesday morning.
How did the COVID-19 pandemic change price stability?
Adjusting the baskets was especially important during the pandemic when “spending patterns were shifting suddenly and profoundly,” said Lehto. While Statistics Canada updates the baskets every year now, before the pandemic, it did so every two years.
The changing basket weights are also an important marker of history, because they show where Canadians have had to devote more money in a given year, explained William Huggins, a professor of finance and business economics at McMaster University.
“The weights change in response to the data that’s already gone by. So when we’re seeing that increase in food weight, that’s in response to the fact that in 2023 we spent more than we did on food than in 2022,” he said.
That became especially pertinent during the pandemic, when restaurants shut down and people stopped eating out. People stopped travelling, too, which in turn impacted the transportation basket.
“You see all these wild changes in the CPI basket really as a diagnostic of how people were changing their lifestyles,” said Huggins.
Will I feel these changes at the grocery store?
The updated baskets “will still be a measure of approximately how a bundle of food prices has changed in the last month and it’s nothing more than that. It is a measure of average affordability,” said Michael von Massow, a food economist at the University of Guelph.
“The impact on the ground or in the grocery aisle, if you will, isn’t significantly different…. It gives us a sense of what to expect.
“If you really want to see what’s relevant to you as an individual, you could go look at the table and say, ‘Oh, I eat more chicken than beef, and fresh chicken [is] up less than beef in the last year.'”
Take the inflation numbers released last month. Food inflation grew at a slower rate of 1.4 per cent annually in April compared to the same time last year, when the growth rate was 9.1 per cent.
Those numbers won’t feel accurate to everyone — because we all have different grocery lists, said von Massow.
“[The basket] reflects changes in demand and it also reflects changes in relative prices.”
TORONTO – Canada Goose Holdings Inc. says it has signed a deal that will result in the creation of its first eyewear collection.
The deal announced on Thursday by the Toronto-based luxury apparel company comes in the form of an exclusive, long-term global licensing agreement with Marchon Eyewear Inc.
The terms and value of the agreement were not disclosed, but Marchon produces eyewear for brands including Lacoste, Nike, Calvin Klein, Ferragamo, Longchamp and Zeiss.
Marchon plans to roll out both sunglasses and optical wear under the Canada Goose name next spring, starting in North America.
Canada Goose says the eyewear will be sold through optical retailers, department stores, Canada Goose shops and its website.
Canada Goose CEO Dani Reiss told The Canadian Press in August that he envisioned his company eventually expanding into eyewear and luggage.
This report by The Canadian Press was first published Sept. 19, 2024.
Almost seven years since news broke of an alleged conspiracy to fix the price of packaged bread across Canada, the saga isn’t over: the Competition Bureau continues to investigate the companies that may have been involved, and two class-action lawsuits continue to work their way through the courts.
Here’s a timeline of key events in the bread price-fixing case.
Oct. 31, 2017: The Competition Bureau says it’s investigating allegations of bread price-fixing and that it was granted search warrants in the case. Several grocers confirm they are co-operating in the probe.
Dec. 19, 2017: Loblaw and George Weston say they participated in an “industry-wide price-fixing arrangement” to raise the price of packaged bread. The companies say they have been co-operating in the Competition Bureau’s investigation since March 2015, when they self-reported to the bureau upon discovering anti-competitive behaviour, and are receiving immunity from prosecution. They announce they are offering $25 gift cards to customers amid the ongoing investigation into alleged bread price-fixing.
Jan. 31, 2018: In court documents, the Competition Bureau says at least $1.50 was added to the price of a loaf of bread between about 2001 and 2016.
Dec. 20, 2019: A class-action lawsuit in a Quebec court against multiple grocers and food companies is certified against a number of companies allegedly involved in bread price-fixing, including Loblaw, George Weston, Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger (which have all denied involvement, except for Loblaw and George Weston, which later settled with the plaintiffs).
Dec. 31, 2021: A class-action lawsuit in an Ontario court covering all Canadian residents except those in Quebec who bought packaged bread from a company named in the suit is certified against roughly the same group of companies.
June 21, 2023: Bakery giant Canada Bread Co. is fined $50 million after pleading guilty to four counts of price-fixing under the Competition Act as part of the Competition Bureau’s ongoing investigation.
Oct. 25 2023: Canada Bread files a statement of defence in the Ontario class action denying participating in the alleged conspiracy and saying any anti-competitive behaviour it participated in was at the direction and to the benefit of its then-majority owner Maple Leaf Foods, which is not a defendant in the case (neither is its current owner Grupo Bimbo). Maple Leaf calls Canada Bread’s accusations “baseless.”
Dec. 20, 2023: Metro files new documents in the Ontario class action accusing Loblaw and its parent company George Weston of conspiring to implicate it in the alleged scheme, denying involvement. Sobeys has made a similar claim. The two companies deny the allegations.
July 25, 2024: Loblaw and George Weston say they agreed to pay a combined $500 million to settle both the Ontario and Quebec class-action lawsuits. Loblaw’s share of the settlement includes a $96-million credit for the gift cards it gave out years earlier.
Sept. 12, 2024: Canada Bread files new documents in Ontario court as part of the class action, claiming Maple Leaf used it as a “shield” to avoid liability in the alleged scheme. Maple Leaf was a majority shareholder of Canada Bread until 2014, and the company claims it’s liable for any price-fixing activity. Maple Leaf refutes the claims.
This report by The Canadian Press was first published Sept. 19, 2024.
Companies in this story: (TSX:L, TSX:MFI, TSX:MRU, TSX:EMP.A, TSX:WN)
TORONTO – TD Bank Group, which is mired in a money laundering scandal in the U.S., says chief executive Bharat Masrani will retire next year.
Masrani, who will retire officially on April 10, 2025, says the bank’s, “anti-money laundering challenges,” took place on his watch and he takes full responsibility.
The bank named Raymond Chun, TD’s group head, Canadian personal banking, as his successor.
As part of a transition plan, Chun will become chief operating officer on Nov. 1 before taking over the top job when Masrani steps down at the bank’s annual meeting next year.
TD also announced that Riaz Ahmed, group head, wholesale banking and president and CEO of TD Securities, will retire at the end of January 2025.
TD has taken billions in charges related to ongoing U.S. investigations into the failure of its anti-money laundering program.
This report by The Canadian Press was first published Sept. 19, 2024.
