Canadian Foreign Post Indexes

Data are collected under the authority of the Statistics Act, Revised Statutes of Canada, 1985, Chapter S-19.

By law, Statistics Canada is prohibited from releasing any information it collects that could identify any person, business, or organization, unless consent has been given by the respondent, or as permitted by the Statistics Act. Statistics Canada will use the information from this survey for statistical purposes only.

To enhance the data from this survey and reduce response burden, Statistics Canada may combine the information you provide with data from other surveys or administrative sources.

The survey asks questions about prices of purchased products and services, such as

• prices for consumer goods and services
• household purchasing patterns.

Statistics Canada publishes the results of its surveys in many formats. To find all the documents related to this survey, follow the links below and type the name of the survey in the search engine located at the left of your screen to filter the results.

Data: You will find tables, profiles of a community or region, thematic maps, public use microdata files, and data visualization tools.

Analysis: You will have direct access to Stats in brief (e.g., releases from The Daily, fact sheets), articles and reports, and journals and periodicals.

• What is the Post Index (PI)?
• What is the PI used for?
• The footnote on the table on the Canadian Foreign Post Indexes publication indicates for certain posts the PI is based on U.S. Department of State (USDS) data. Why is it not based on survey data like other posts?
• Who uses the PI?
• How does the PI differ from other private sector price indices?
• What are the primary sources of information used to calculate the PI?
• What is a Consumer Price Index (CPI)?
• How often are surveys conducted?
• How is the survey data collected at the post?
• Can copies of responses sent to Statistics Canada be provided to the mission?
• Why does the PI change?
• Why has the PI decreased after the latest survey, despite increasing local prices and/or strengthening of the local currency relative to the Canadian dollar?
• What is the source of CPI’s and exchange rates used to calculate a PI?
• The PI for the post has not changed or dropped, however prices at post have been increasing weekly. How can this be?
• The mission has recently experienced high employee turnover. Is the latest survey still representative?
• What does “effective date” mean?
• What is a Post Purchasing Pattern?
• I cannot find the answer to my question in these FAQ’s or The Guide to the Post Index. Who can I contact?

What is the Post Index (PI)?

The Post Index (PI) compares the price of a selection or “basket” of goods and services in Ottawa to the price of the same basket of goods and services at a foreign post, at a given point in time.

Since Ottawa is the reference city, its PI is set to 100. To estimate the PI at a foreign post, a sample of goods and services and their prices are collected from the foreign post and are then compared to the prices of a similar basket of goods and services in Ottawa. The resulting index provides an indicator of the difference in costs in the foreign post compared to the costs in Ottawa.

The Guide to the Post Index provides detailed information on Post Indexes.

What is the PI used for?

The PI is used to support the payment of a post living allowance to individuals who work abroad for the federal government under the provisions of Foreign Service Directives (FSD), the Military Foreign Service Instructions (MFSI), and the Technical Assistance Regulations (TARs). The Post Living Allowance (PLA) is intended to provide employees with the same purchasing power as that of their counterparts in Ottawa. The amount of the PLA is based on the PI.

The National Joint Council’s (NJC) Foreign Service Directive (FSD) 55 – Post Living Allowance (PLA), provides instructions for determining the PLA, including the formula for calculating the allowance using the PI.

Applied to salary ranges, the PI equalizes the purchasing power of the portion of the employee's salary that is used to purchase the PI "basket" of goods and services.

The footnote on the table on the Canadian Foreign Post Indexes publication indicates for certain posts the PI is based on U.S. Department of State (USDS) data. Why is it not based on survey data like other posts?

There are two situations where a PI can be based on USDS data:

• The mission has less than 5 full time Canada-based Staff (CBS)
• When a new mission is opened at a location which does not have an established PI, USDS data will be used to establish a PI until a survey can be conducted.

Who uses the PI?

The Canadian government employs individuals in more than 400 locations outside Canada which include:

• employees serving under the terms and conditions of the Foreign Service Directives (FSDs);
• persons working under the provisions of the Technical Assistance Handbook (TAH);
• Canadian Forces members serving outside the country either under the terms and conditions of the Military Foreign Service Instructions (MFSIs) or the Foreign Service Directives (FSDs).

How does the PI differ from other private sector price indices?

The PI was designed to meet a very specific purpose, to support FSD 55 - Post Living Allowance. This directive assists employees where the cost of living is higher than in Ottawa by providing an allowance to compensate for higher costs for goods and services at the post which are not compensated for in other directives. As such, certain expenses such as housing, daycare and education are not included in the calculation of the PI.

FSD 55 explains the PI, used in the calculation of the Post Living Allowance, and the Government Allowance and Spatial Price Indexes Section of Statistics Canada is responsible for PI computation.

The Guide to the Post Index provides detailed information on Canadian Foreign Post Indexes.

What are the primary sources of information used to calculate the PI?

There are three primary sources of information used to calculate the PI

• Canadian Foreign Post Indexes Survey data – as collected by Statistics Canada:
• Exchange rates from:
  • Bank of Canada
  • Bloomberg

Some posts may be required to submit a monthly report to Statistics Canada confirming the minimum and maximum rate actually received by employees at the Post, as well as the rate most frequently received during the month.

Consumer Price Index (CPI), or comparable indexes, from official statistical offices or official international organizations that monitor price movements, such as the International Monetary Fund, the United Nations, the International Labour Organization.

What is a Consumer Price Index (CPI)?

A Consumer Price Index (CPI), or similarly named index, is an indicator of changes in consumer prices. It is obtained by comparing the cost of a specified selection or “basket” of goods and services purchased by consumers over time. CPIs are widely used as an indicator of the change in the general level of consumer prices or the rate of inflation.

The most recent CPI values are used for PI calculations. However, since CPI type data is never available immediately, inflation for the current month is projected to ensure that PI levels are kept up to date. In circumstances where information is available on a frequent and current basis, the PI can be monitored over a long period of time with a reasonably high degree of confidence.

CPI values used for PI purposes exclude the Shelter and Fuel and Utilities components whenever possible since these are not in scope for FSD 55.

How often are surveys conducted?

A Post Index Survey is completed at each eligible post on a cyclical basis and approximately every three to four years.

Requests for specific post surveys may be made outside these timeframes, as approved by the Treasury Board Secretariat. These out of sequence surveys may result from:

• volatility of retail prices in a particular country;
• instability in currency exchange rates;
• a decision to closely monitor changes in local retail prices faced by Canadian personnel through reference to other indicators.

How is the survey data collected at the post?

Once the survey is issued by Statistics Canada, the task of collecting prices and other data is shared by the personnel of all departments at the post.

A contact at the mission receives specific instructions from Statistics Canada on how to proceed with data collection at the post.

Can copies of responses sent to Statistics Canada be provided to the mission?

No. Any data collected by Statistics Canada, including Information from Canadian citizens posted to foreign locations, is protected under the Statistics Act once received by Statistics Canada.

For more information on prohibition against divulging information, consult section 17 (1) of the Statistics Act, Revised Statutes of Canada, 1985.

Why does the PI change?

The PI can change as a result of a new survey and/or the monthly monitoring.

• Results of a new survey
  • A survey conducted at the foreign post may result in a change in the PI as the new data will reflect actual current prices (how much goods and services cost) and purchasing patterns (where goods and services are purchased)
• Monthly monitoring
  • Post Indexes are subject to monthly monitoring
  • Three factors are considered monthly when monitoring the PI:
    1. fluctuations in exchange rates relative to the Canadian dollar,
    2. inflation in Ottawa prices, and
    3. inflation in prices at the post, as indicated by CPI’s.
  • A new PI value becomes effective only if the total change in the PI is more than 3% either upwards or downwards.

Why has the PI decreased after the latest survey, despite increasing local prices and/or strengthening of the local currency relative to the Canadian dollar?

While nominal increases to local prices can be indicative of local inflation, it is important to remember that most Canada based staff posted abroad are paid in Canadian dollars. A PI uses exchange rates to Canadian dollars and prices in Ottawa as their base. Local price increases at a post tend to occur in conjunction with devaluation of the local currency. Therefore, even though local prices seem to increase, it is likely the rate of exchange moves in favour of Canadians posted abroad as the buying power of the Canadian dollar on the local economy may be increasing relative to local inflation. When the local currency strengthens relative to the Canadian dollar, it is likely to impact the PI.

Post Indexes are subject to a monthly review, or tracking process, to assess their continuing validity (see Question 11 above

What is the source of CPI’s and exchange rates used to calculate a PI?

Currency exchange rates and CPI’s are collected by Statistics Canada from national statistical agencies, central banks, and other internationally recognized bodies such as the International Monetary Fund (IMF), the Organization for Economic Cooperation and Development (OECD) and the World Bank.

The Bank of Canada (BoC) and Bloomberg are the primary sources of exchange rates.

The PI for the post has not changed or dropped, however prices at post have been increasing weekly. How can this be?

In the months between surveys, the monthly review of the PI consider the following three elements. These must all be considered when interpreting the resulting PI.

• fluctuations in exchange rates relative to the Canadian dollar;
• inflation in Ottawa prices;
• inflation in prices at the post as indicated by CPI’s.

For example, inflation at the post may be the same as inflation in Ottawa. Fluctuations in exchange rate will impact the index. If the exchange rate for the local currency increases, the Canadian dollar will have more purchasing power at the post. An increase in local prices may be offset by the increased value of the Canadian dollar, resulting in no change to the post index. The value of the Canadian dollar may even increase enough to result in a drop in the post index.

As indicated in Question 11 above, a new PI value becomes effective only if the total change in the PI is more than 3%, either upwards or downwards.

The mission has recently experienced high employee turnover. Is the latest survey still representative?

Yes, the latest survey continues to be representative of costs at the post compared to costs in Ottawa.

What does “effective date” mean?

The Canadian Foreign Post Indexes tables contain several variables, including the variable “effective date” which usually reflects the month and year the index became applicable.

If a new location is identified where personnel are already in place but for which a PI does not exist, those PIs are released retroactively and are effective from the time that posted personnel arrived at the post.

If PI at the new location has been calculated based on data from a new Canadian Foreign Post Index survey, the “effective date” in the published tables reflects the month and year the survey was conducted.

What is a Post Purchasing Pattern?

The term "purchasing pattern" refers to the combination and relative importance of various retail outlet types or other sources from which personnel at a post report buying the goods and services contained in the PI basket. These include:

• Local stores (part of the local economy)
• Local special outlets
  • Duty free
  • Tax free (VAT rebates)
  • Military facilities
• Canadian source
• Online or direct importation (e.g., Amazon)
• Brought to Post
• As Ottawa

A post purchasing pattern may vary depending on the conditions at the post. The majority of purchases are normally made in local outlets at each location. At many locations, purchases of certain goods and services are available to some Canadian expatriates exempt from sales or value-added taxes. These goods and services are separated from purchases made at full retail values within each post's purchasing pattern.

Items purchased in Canada prior to a posting for inclusion with effects to be shipped to the post at the time of relocation are referred to as "Brought to Post". Goods purchased and brought from a previous posting abroad are also considered "Brought to Post". Expenditures reported "Brought to Post" are given an index of 100, or equal to Ottawa

The complete "all-items" post pattern is the sum of all the percentages reported for each purchasing source for each item, combined to reflect the relative importance of each item in the basket.

More information on Purchasing Patterns can be found in The Guide to the Post Index.

I cannot find the answer to my question in these FAQ’s or The Guide to the Post Index. Who can I contact?

Foreign Service Directives

Military Foreign Service Instructions

Canadian Foreign Post Index

The Guide to the Post Index