Inflation calculator: How do rising prices affect your personal finances?
By Daniel Nass Posted May 12, 2022A dollar doesn’t go as far as it used to. Thanks to rising inflation, Canadian consumers are seeing the price of everything from milk to gasoline go up.
Price hikes across a wide range of goods and services mean that a financial squeeze is “inescapable for most Canadians,” Rannella Billy-Ochieng’, an economist at RBC Economics, said.
This interactive calculator will help you understand how inflation affects you personally.
So how does Statistics Canada calculate the inflation rate shown above? Every month, officials track the changing costs of hundreds of individual products and services. This selection of items, known as a basket, is designed to be representative of Canadian households’ overall consumption habits. The inflation rate that you see in the headlines each month is calculated by comparing the aggregate price of all the items in this basket with the price of the same items a year earlier.
For example, gasoline currently accounts for 3.57 per cent of the basket, while breakfast cereal makes up about one 10th of that. If the prices of a litre of gasoline and a box of cereal both increase by a dollar, gasoline’s impact on the overall inflation rate will be 10 times greater.
But what if you’re an avid breakfast cereal eater who doesn’t drive a car? A basket based on your consumption habits would look quite different from the official one, and the top-line inflation rate wouldn’t necessarily reflect your financial situation.
This tool allows you to build your own personalized basket and calculate your individual inflation rate. Across eight major categories of goods and services, you’ll enter dollar amounts for a selection of common items, and see how the cost of those items has changed over time. At the bottom you’ll find a summary of your spending and how it stacks up against overall inflation.
The calculator is for informational purposes only and should not be taken as financial advice.
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Food
Food prices are among those hardest hit by inflation, with increases driven by disruptions to global supply chains, as well as pressures introduced by the war in Ukraine starting in February 2022. A majority of Canadians say that they plan to buy less expensive grocery items in response to surging prices.
“We’re beyond sticker shock here,” said Dalhousie University food researcher Sylvain Charlebois. “It’s going to be quite challenging for a lot of consumers that are trying to feed themselves with a tight budget.”
The prices of some items, such as produce, rise and fall in an annual cycle, which is called seasonality. To account for this fluctuation, inflation is often measured as a comparison between the same months in different years — for example, April 2022 compared with April 2021.
Shelter
Housing is most Canadians’ biggest expense. In addition to rent and utilities, the consumer price data tracks expenses related to homeownership. The owned accommodation category encompasses mortgage interest payments, insurance, property tax and maintenance, as well as replacement cost — the amount it would cost to fully rebuild a similar home.
However, if you’re in the market to buy a house, it’s important to know that this data doesn’t track housing prices effectively. For that, you’re better off looking to a source such as the Canadian Real Estate Association.
Transportation
Gasoline prices reached record highs across Canada this year as the war in Ukraine injected uncertainty into the oil market. Other transportation expenses, including car rentals, airfare and even public transportation, have all risen considerably following the initial shock of the pandemic.
Because inflation is a comparison between two points in time, lower-than-usual prices in the past can cause inflation to appear higher in the present, and vice versa. This is known as a base effect. For example, gasoline prices fell early in the pandemic, so today’s elevated gas prices appear more extreme compared with 2020 than compared with 2019.
Health and personal care
Clothing and footwear
Recreation, education and reading
Household
Alcohol, tobacco and cannabis
How inflation adds up for you
Add some items to your basket above and your results will appear here.
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About the data
The inflation calculator uses Consumer Price Index data from Statistics Canada. While the full CPI dataset tracks hundreds of products and services, a subset of common items are presented here, which cover about 80 per cent of the CPI basket by weight.
Dollar amounts are calculated relative to the index value for the latest month available. For example, if a product’s CPI is 125 in April 2022 and 100 in April 2021, and a value of $100 is entered for that product, the value for April 2021 will be $100 × (100 / 125), or $80.
Provincial CPI data exists for many categories. Where it is not available, national data is used and noted in each section’s footnote.
Illustrations by Laura Whelan
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