Episode 348 - Andrew Barclay (StatCan): Measuring Inflation

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Mar 13, 2025

Join economist Andrew Barclay, a senior analyst at Statistics Canada, as he unpacks the intricate world of inflation measurement. Discover why personal costs often feel higher than official inflation numbers. Andrew reveals the complexities behind the Consumer Price Index (CPI), the challenges of measuring housing costs, and the impact of consumer behavior shifts, especially post-pandemic. He also addresses skepticism surrounding government data and emphasizes the importance of accuracy and transparency in understanding inflation.

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INSIGHT

Importance of Inflation Measurement

Measuring inflation helps gauge economic health and informs government/Bank of Canada decisions.
It's crucial for social payments like CPP, disability benefits, and minimum wages.

INSIGHT

CPI Calculation

CPI is calculated by comparing the prices of all consumed goods and services over time, maintaining constant quality and quantity.
A 'basket' represents consumption, with weights assigned based on each item's spending influence.

INSIGHT

Basket Composition

Basket contents and weights are determined by publicly available household consumption data.
Specific surveys and scanner data refine the basket, ensuring it reflects actual spending.

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Is the government manipulating inflation data? Why do so many people feel like their personal costs are rising faster than official inflation numbers suggest? In this episode of the Rational Reminder Podcast, we dive deep into one of the most debated and misunderstood economic topics: inflation. Today, we are joined by Andrew Barclay, an economist and senior analyst in the Consumer Price Division at Statistics Canada, to discuss everything you need to know about inflation and the Consumer Price Index (CPI). Statistics Canada is Canada’s national statistical agency dedicated to producing accurate, relevant, and timely data to help Canadians better understand their country. In our conversation, we unpack how inflation and the CPI are calculated and why it is so important. We explore the controversy around CPI calculations and the influence of inflation on government benefits, tax brackets, and the overall economy. Andrew also addresses scepticism and conspiracy theories about government inflation reporting, uncovers drivers of the perception gap, and explains how Statistics Canada ensures the accuracy and integrity of its data. Join us to hear the real story behind CPI and inflation with Andrew Barclay!

Key Points From This Episode:

(0:00:00) Background about Andrew and what inspired today's topic.

(0:05:33) Find out why measuring inflation is important and how the CPI is calculated.

(0:10:08) What goes into the CPI basket and how frequently the contents are updated.

(0:12:42) How consumer choices impact inflation and how 'shrinkflation' is accounted for.

(0:15:43) Learn how quality adjustments are accounted for in the CPI and why they matter.

(0:19:01) Scepticism surrounding quality adjustments and how the CPI adapts to crises.

(0:25:21) The role of grocery price tracking and why Canada uses a single CPI measure.

(0:28:08) Explore the idea of personal inflation and why it is usually different to the CPI.

(0:31:10) The difference between home prices and housing costs and how they are calculated.

(0:35:41) Hear how Statistics Canada's approach for housing compares to other methodologies.

(0:41:15) Perceived inflation versus actual inflation and drivers of the inflation perception gap.

(0:51:58) Statistics Canada's method of dealing with the perception gap and ensuring quality.

(0:55:51) Uncover the most criticized indexes and how Statistics Canada includes feedback.

(1:01:52) Andrew's message for those who do not trust the CPI and his definition of success.

Links From Today’s Episode: Meet with PWL Capital: https://calendly.com/d/3vm-t2j-h3p

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582. Rational Reminder Website — https://rationalreminder.ca/

Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/

Rational Reminder on X — https://x.com/RationalRemindRational Reminder on TikTok — www.tiktok.com/@rationalreminder

Rational Reminder on YouTube — https://www.youtube.com/channel/

Rational Reminder Email — info@rationalreminder.caBenjamin Felix — https://pwlcapital.com/our-team/

Benjamin on X — https://x.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Mark McGrath on LinkedIn — https://www.linkedin.com/in/markmcgrathcfp/ Mark McGrath on X — https://x.com/MarkMcGrathCFP

Andrew Barclay on LinkedIn — https://www.linkedin.com/in/andrew-barclay-a38b6035/

Statistics Canada — https://www.statcan.gc.ca/

Canadian System of National Accounts | 'Catalogue of products' — https://publications.gc.ca/Collection/Statcan/13F0029X/13F0029XIE2000001.pdf

Bank of Canada — https://www.bankofcanada.ca/

Canadian Real Estate Association (CREA) — https://www.crea.ca/

Episode 323: Renting Versus Buying a Home in Canada 2005-2024 — https://rationalreminder.ca/podcast/323

Surveys of Consumers | University of Michigan — https://data.sca.isr.umich.edu/

Statistics Canada | The Daily — https://www150.statcan.gc.ca/n1/dai-quo/index-eng.htm

Books From Today’s Episode:

The Courage to Be Disliked — https://www.amazon.com/Courage-Be-Disliked-Phenomenon-Happiness/dp/1501197274

Papers From Today’s Episode:

'The naked eye versus the CPI: How does our perception of inflation stack up against the data?' — https://www.statcan.gc.ca/o1/en/plus/256-naked-eye-versus-cpi-how-does-our-perception-inflation-stack-against-data