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Statistics Canada Updates Inflation Calculation, Gives More Weight To Food

Statistics Canada has revised the way it measures inflation and increased the importance it places on food prices.

The federal agency said the revision has been made to reflect the fact that Canadians are spending more money on groceries and eating out in restaurants.

Following the revisions, food now accounts for 16.72% of the basket of goods used to measure Canada’s inflation rate, up from 16.13% a year earlier.

Food from stores comprises 10.82% of the inflation reading, while food from restaurants makes up 5.90%.

Statistics Canada said it also increased the weightings given to travel costs and shelter to reflect higher costs for recreation and elevated mortgage interest and rent prices.

At the same time, the agency lowered the weighting placed on household furnishings and equipment as Canadians spend less on furniture and other household items.

Statistics Canada's Consumer Price Index (CPI) measures inflation across the country on a monthly, quarterly, and annual basis.

Food and shelter costs have exerted the most upward pressure on inflation in Canada since the end of the Covid-19 pandemic.

Inflation in Canada currently stands at an annualized rate of 2.7%, which is above the Bank of Canada’s 2% target.