Mr. Bruce Howard (Parliamentary Secretary to Minister of Industry, Trade and Commerce):
The Dominion Bureau of Statistics reports that: 1. The Consumer Price Index for Canada is designed to measure the effect of changes in consumer prices on the cost of purchasing an unchanging or equivalent basket of consumer goods find services. The only variable which is considered to cause movement in the index is price change. The basket of consumer goods and services in the index is designed to reflect the spending pattern of a broad middle-income group of urban families of two to six persons.
2. In the Consumer Price Index for Canada the prices used are collected in 33 cities across Canada. Also, the index basket itself is a composite of spending patterns in Canada for urban middle-income families. Thus, regional movements of prices are incorporated in the Canada index in proportion to their importance in the basket.
3. The Canada index is an average or composite for the population group specified in 1. above. It is considered valid for that group as a whole and because of the homogeneity of spending patterns within the group, the index is considered reasonably valid for any significant components of it.
4. As indicated in 2. above, prices from 33 cities are now included in the Canada index. Periodic reviews are carried out to up-date the basket and price samples for the index and such a review is underway currently. Separate Consumer Price Indexes for 10 regional cities in Canada are prepared, but these indexes measure percentage change in consumer prices from one period to the next within each city and cannot be used to compare levels of prices between cities.
Subtopic: CONSUMER PRICE INDEX