Fix the Faulty CPI

Toronto, March 8 – Fixing measurement errors in the Consumer Price Index is a small idea that offers big payoffs to Canadians and the government, according to an e-brief released today by the C.D. Howe Institute. In “Fixing Canada’s CPI: A Simple and Sensible Policy Change for Minister Flaherty,” economist Christopher Ragan, who is David Dodge Chair in Monetary Policy at the Institute, says if the upcoming federal budget devoted the resources needed to improve Statistics Canada’s measurement of the Consumer Price Index, Canadians would have a truer sense of changes in the cost of living, monetary policy would be guided by a more accurate measure of inflation, and Minister Flaherty would more easily achieve the government’s commitment to balance the federal budget by 2015/16.