The Globe and Mail reports in its Thursday, July 22, edition that the cost of housing will have a larger influence in how Canada's main gauge of inflation is tallied.
The Globe's Matt Lundy writes that on Wednesday Statistics Canada unveiled updates to how it weighs the Consumer Price Index, a critical indicator that is used by the Bank of Canada to set its monetary policy. CPI tracks the cost of a fixed "basket" of goods and services.
The weightings are typically updated every two years, and one was initially slated for February of this year based on 2019 consumption. However, Statscan delayed the update until now to account for pandemic shifts in consumer spending in 2020. The updated basket will take effect in the June CPI report, released next week.
The new CPI basket was noticeably influenced by abrupt changes in how Canadians spent amid COVID-19.
The shelter component of CPI -- which includes both owned and rented housing, along with other expenses -- will make up 29.8 per cent of the basket, up from 26.9 per cent. Most of that increase is due to a sharp uptick in spending on real estate commissions and legal fees, owing to record transactions across the country.
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