The Consumer Price Index (CPI) measures price changes over a period of time for a "fixed basket"—or a fixed set—of goods and services consumed by Canadian households. Statistics Canada publishes CPI-related indexes on a monthly and annual basis. Other CPI data products, such as updates to the CPI reference manual, analytical and technical papers, and data visualizations, are disseminated at various frequencies throughout the year. The CPI is used by a number of public, private, and not-for-profit organizations, as well as by the media, researchers and individual Canadians, to monitor inflation, guide fiscal and monetary policies, index payments, and adjust contracts, among other things.
This evaluation was conducted by Statistics Canada in accordance with the Treasury Board's Policy on Results (2016) and Statistics Canada's Risk-Based Audit and Evaluation Plan (2019/2020 to 2023/2024). The primary objective of the evaluation was to provide a neutral, evidence-based analysis of the relevance of the CPI and its complementary indexes to municipal governments (MGs) and organizations supporting MGs; the effectiveness of communication strategies related to the CPI; and the extent to which the planning, design and implementation of innovation activities were effective and aligned with Statistics Canada's modernization initiative. It should be noted that the conducting phase of the evaluation, during which all data for the report were collected, was completed before the COVID-19 pandemic. As a result, the findings and recommendations do not consider the activities or decisions that took place after March 2020.
The evaluation found that Statistics Canada was the main source of CPI information for MGs and organizations supporting MGs. The CPI's related indexes, including the city indexes, were used at the municipal level for indexation, policy support, budgeting, reporting, and in some cases the creation of a municipal price index. There was limited use of the inter-city indexes by some users and interpretability was identified as an area for improvement—more details on concepts and the use of plain language would be beneficial. In terms of gaps, the evaluation found that more detailed geographic data and index categories were desired by interviewees. Program representatives indicated that they were aware of the gaps and that they continue to pursue alternative sources of reliable information to address them.
In terms of communication activities, the CPD is transitioning away from a dissemination culture focused primarily on traditional vehicles such as The Daily and the Integrated Metadatabase, towards a more strategic communication culture aimed at leveraging a variety of communication tools and channels – such as using social media to broaden its communications. Another example is the launch of the CPI portal in August 2019 which includes: the CPI Data Visualization Tool, recently released key indicators, a variety of featured products, direct access to CPI products, and information on new products and activities. To evaluate the effectiveness of new communication activities, the division will need to develop metrics and performance measures.
All projects and activities reviewed were aligned with the modernization initiative and expected results. They focussed on increasing the use of data from alternative sources, integrating data, and on building capacity. The CPD is sharing information internationally and across the agency, as well as leveraging best practices and lessons learned. Governance and risk management are in place to monitor projects and the implementation of an agile approach (e.g., "network of teams") was effective, however, governance and risk management practices for activities could be improved. Finally, performance measurement could be strengthened.
The evaluation proposed three recommendations:
- Recommendation 1:
Given the CPD's desire to become more strategic with its communications activities, the division engage corporate communications to improve its knowledge of the new communications tools available. Furthermore, the division should update its communication planning process to include the use of measurement tools (in addition to web metrics) to gather information on the effectiveness of activities. This information will help improve activities such as the communication of program changes to users. - Recommendation 2:
The CPD strengthen its performance measurement framework process for its DPMF projects to ensure that project outcomes are clearly articulated and that indicators are balanced, comprehensive and aligned with the identified outcomes and expected benefits. - Recommendation 3:
The CPD include all activities that have a significant impact on the DPMF projects, such as the high-capacity processing infrastructure activities, within the governance and oversight structures of the DPMF projects. The adoption of this more holistic approach will improve overall coordination and risk management.
The CPD - adapting and responding to the pandemic
Since the end of the reference period for the evaluation (March 2020), the CPD has taken a number of significant steps to address challenges emerging from COVID-19. Beginning in April 2020, the collection and compilation of the CPI were impacted by measures designed to limit the spread of COVID-19, as in-person field collection was conducted remotely, and imputation strategies were required to address an increased number of temporary business closures and out-of-stock products. The strategies were implemented according to international guidelines, and following consultations with other national statistical organizations.
The CPD continued to calculate the official CPI based on the fixed basket approach; however, the division recognized that a new analytical series examining shifts in consumer purchasing patterns would provide valuable insight on the impact of COVID-19. Using various sources of expenditure data, Statistics Canada, in partnership with the Bank of Canada, estimated adjusted consumer expenditure basket weights and an adjusted price index, reflecting shifts in consumption patterns during the pandemic. The ability to respond to this data need was made possible through the CPD's innovative work on scanner data, aggregate expenditure data, household final consumption expenditure data and other sources of information. Scanner data allowed for timely and insightful analysis on how Canadian Consumers Prepare for COVID-19 and how Canadian Consumers Adapt to COVID-19: A Look at Canadian Grocery Sales up to April 11 as well as the dissemination of more detailed data tables on Monthly average retail prices for select products, by province.