There are different ways to monitor food prices and inflation. However, when evaluating the accuracy of our lead federal agency in measuring changes in food prices, it becomes clear that much work remains to be done.
As the months pass, Statistics Canada reports suggest that food inflation is easing and prices are gradually stabilizing. However, we don’t really feel it at the grocery store. This divergence in perception raises questions about the accuracy of Statistics Canada data regarding food prices.
Evaluating the accuracy of federal agency data has always been a difficult task, but not anymore, because we now have our own data. Through systematic price audits across the country, a gap between Statistics Canada reports and our data becomes clearly measurable.
For example, the list of food products selected in February 2024, published by Statistics Canada last week, shows significant differences compared to the prices observed in grocery stores. This list is always published a few weeks after the Consumer Price Index (CPI). By comparing our price list with Statistics Canada data, we found that the mean absolute error (MAE) between the two lists is 5.59. This means that on average, the prices reported by Statistics Canada deviate from the actual observed values by 5.59 percentage points. It’s not nothing.
Specifically, data from February 2024 reveals significant gaps in food price changes. For example, oranges were reported at -6% by Statistics Canada, while our data shows an increase of 20.1%. Similarly, lawyers were reported at -4% by Statistics Canada, while our observation reveals a 9% increase. These deviations are not isolated cases; they are part of a pattern where 47% of food items (16 out of 34 items listed) are underestimated by Statistics Canada. This suggests that the agency’s reports do not always accurately reflect food inflation, although it does not indicate deliberate underestimation.
Our calculations also include the effects of re-flation.
These significant underestimations and overestimations have implications for consumers. This means that the cost of living could be different than reported, thus affecting household financial planning.
For the economy, this suggests that inflation in the food sector may be more present than official data indicates, leading to ill-informed policy decisions.
The 5.59 EMA does not simply symbolize a statistical number; it represents the gap in the real costs that Canadians face on a daily basis. This gap can exacerbate financial strain on families and may require recalibration of social assistance programs to accurately reflect the cost of living.
To improve the accuracy of food price data, Statistics Canada must refine its data collection and analysis methods. Collaboration with independent research organizations could improve the reliability of data, ensuring that it accurately reflects market trends and helps with more informed decision-making.
In October, Minister François-Philippe Champagne announced an investment in the Contribution Program for non-profit consumer and voluntary organizations to expand the scope of existing consumer projects, including the expansion of research in the consumer sector. retail, particularly in grocery stores. However, additional investments are needed.
Regardless of public opinion, Statistics Canada remains a crucial source of economic indicators. However, these are only indicators. Canada could benefit from a broader spectrum of reliable data sources.
While there is no reason to believe these differences are deliberate, the discrepancies highlighted by our price audits prompt a re-evaluation of how food price data is collected and reported in Canada. The public must feel confident in the accuracy of the reports published by the federal agency. Addressing these gaps is a crucial step toward better budgeting and policy planning, ultimately affecting the economic well-being of all Canadians.
reference: www.lapresse.ca