Every year, StatCan tweaks how it calculates inflation. What to know about

Whenever you pass through the cash register at a grocery store, the price of everything in your shopping cart — from discounted chicken to strawberries on promotion — is collected by the retailer and sent to Statistics Canada.

That’s just one of several ways the data agency tracks the spending reflected in its consumer price index, or CPI: Canada’s most comprehensive measure of inflation.

CPI is broken down into eight categories — called “baskets” — meant to show the average cost of a group of goods and services. There’s a food basket, a transportation basket and a shelter basket, among others.

When taken together, these baskets make up the overall CPI number, or the so-called headline number that you see in our reporting every month. But they each hold a different “weight” in the overall CPI, depending on how much Canadians spend on one basket relative to the others.

Every year, Statistics Canada conducts a review of those categories. After this year’s change, food will now make up a bigger chunk of that overall figure, because Canadians dedicated more of their budgets to food bought in stores and at restaurants in 2023 than they did in the previous year.

Here’s what you need to know about the changes, and how they affect overall inflation.

Why do we break down inflation by basket?

Statistics Canada regularly reviews basket weights to make sure they’re reflective of how much Canadians are spending on goods and services. 

“It’s something that we do every year. And the fact that we do it every year is actually beneficial to Canadians because that means that the CPI is based on the most current spending patterns of Canadians,” said Rebecca Lehto, a StatCan consumer price analyst.

Because Canadians spent more on food and dining out in 2023, the weight of the food basket increased (for the second year in a row) from 16.13 per cent of the total inflation number in 2022 to 16.72 per cent in 2023.

Food from grocery stores now accounts for 10.82 per cent of the overall CPI, while food from restaurants increased to 5.90 per cent of that figure, according to StatCan.

The baskets for shelter and health and personal care also increased, while others — like those for transportation, or alcoholic beverages, tobacco products and recreational cannabis — declined in importance.

“This year, we saw the weight of food go up and that was essentially because more people are spending at restaurants again without COVID restrictions or capacity restraints. And it’s also coming from the grocery side,” because prices increased significantly, Lehto said.

What does that mean for inflation numbers?

Each basket has a varied impact on the overall CPI figure. More broadly, items like food or gas are sometimes excluded from inflation measures because their prices can be volatile.

“For example, a five per cent change in gas prices will impact the all-item [consumer price index] more than a five per cent change in milk prices,” because Canadians direct more spending…