Statistics Canada is taking a closer look at some of the country’s favourite vices to see if they’re being given enough weight in the agency’s monthly inflation numbers.
The Consumer Price Index, a much-watched figure that drives wage increases and economic policy, may underplay just how much booze and tobacco ordinary Canadians are buying.
An international comparison, for example, shows that inflation yardsticks in Britain, Australia, Ireland and other countries give a bigger share to alcohol purchases than Canada does.
And domestic surveys suggest Canadians under-report their consumption of recreational substances that have a social stigma or are illegal, such as marijuana.
The review of vices is part of a major overhaul of the Consumer Price Index or CPI, which the agency expects to have in place for its May inflation report next year.
The painstaking exercise, undertaken every four years, is aimed at ensuring each of the 168 categories in the monthly basket of goods and services is given a weight that matches how ordinary Canadian households divvy up their own budgets.
An internal Statistics Canada chart shows that Canada’s alcohol weighting, for both store-bought booze and drinks served in bars and pubs, is 1.7% of the monthly household budget.
That compares with 5.1% for Australia, 4.1% for Ireland and 6.7% for the United Kingdom. Canada’s weighting, however, is higher than the 1% used by the United States, a country in which alcohol taxes tend to be lower.
Meanwhile, the agency has already decided to toss some new items into the inflation basket to reflect Canadians’ continuing love affair with electronics.
Smartphones and iPads, for example, make their basket debut next month, joining the recent additions of Blu-Ray DVD players and flat screen TVs.
