Andrew Barclay is an Economist and Senior Analyst in the Consumer Price program at Statistics Canada, a position he has held for nearly 9 years. Master’s Degrees in Political Economy from Carleton University and International Development from SFU.
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.
Read The Transcript:
Ben Felix: This is the Rational Reminder Podcast, a weekly reality check on sensible investing and financial decision-making from two Canadians. We are hosted by me, Benjamin Felix, Chief Investment Officer at PWL Capital and Mark McGrath, Associate Portfolio Manager at PWL Capital.
Mark McGrath: All right. Welcome to episode 3 –
Ben Felix: 48.
Mark McGrath: 48. Okay. We had to move some episodes around there. I think we started with – it was a different number and now it's 348.
Ben Felix: We did.
Mark McGrath: Good conversation today. I think it'll be controversial, because it's a really, really interesting topic that not a lot of people understand very well. I think our guest today did an incredible job.
Ben Felix: Let me do the intro, but can you talk a little bit about the types of interactions that you have online that led us to think that doing this episode was a good idea?
Mark McGrath: We have Andrew Barclay on from StatCan, and Ben will go through the intro, but the point of today's episode is to talk about inflation, basically, and more specifically, the consumer price index (CPI), which measures the rate of change in inflation over time. It was a really interesting conversation, because to your point, if you talk to people about inflation, it's always a big topic. It's always a hot topic. There's a ton of controversy and there's a ton of conspiracy out there about inflation, and that the government intentionally – not mismanages inflation, but mismanages the data, or intentionally gamifies the data in order to provide a narrative around inflation that it's lower than expected, or something.
Going into that and why that's probably not true, and really getting deep onto the methodology and the amount of data they collect, which is blew my mind and then all the little things that we wouldn't think of, all that work they do to come up with, with CPI and inflation numbers was really, really interesting. A lot of this controversy comes from the crypto space, where they're measuring M2, like money supply and stuff, instead of inflation when talking about currency debasement. There's just a lot of, I think, misinformation out there around the topic, but it's also really important, because things like the Canadian pension plan and tax brackets are typically indexed to CPI.
It impacts everybody, not just your grocery store, but it impacts your government benefits and your tax rates and everything else. Really getting into why and how they calculate some of this stuff was super fascinating.
Ben Felix: Those connections to government benefits and things like that are why I think that conspiracy theory thinking gets introduced to the discourse, because people are saying, well, they're not going to increase my CPP benefits enough to match inflation, because it's not in the government's best interest to do that. And so, they're going to influence Statistics Canada to report a lower rate of inflation, whatever, whatever. Even though none of that makes any sense when you peel back the layers, on any level.
Mark McGrath: They think it's just trying to convince people that things are actually better. Their lives are actually better than they actually are. No inflation is actually not that high. But my personal inflation, or look at the price of housing, or meat – steak went up $10 last month or something. People use these anecdotes and really, really short-term thinking around their own personal inflation and then draw conclusions from it. I think the conversation we have with Andrew should, hopefully, go a long way to quelling those concerns.
Ben Felix: He talks about it at the end of the conversation, he is a public servant, a dedicated public servant, who thinks what he's doing is extremely important. I agree with him. But he is personally very connected to the data product that he's producing. The other people on the team, he says, are similar to him, where they're just nerdy people that are serving Canadians and they want to produce a really good intellectually honest product. Now, that's where this is coming from. It's not government manipulated data. He said that they don't even report up to the minister and they don't report their inflation data to the government before it's released to the public.
They're independent. They've got an independent oversight from people, other experts from other countries. Anyway, that's at the end of the conversation. We talked about that, because we asked specifically about the conspiracy theories around inflation. Overall, I think this is a super interesting conversation. He goes through how inflation is calculated, how CPI is calculated, what goes into the baskets, how the basket changes over time. Housing is calculated. We talked about the perceptions of inflation, versus actual inflation and how there can often be a difference between those things and what can drive that gap. Interesting conversation.
Andrew Barclay is an Economist and Senior Analyst in the Consumer Price Program at Statistics Canada. He's held that position for nearly nine years. He's got two master's degrees, one in Political Economy from Carleton University, and another one in International Development from SFU. That's it. I think this is a really interesting conversation. Like you said, Mark, I think it'll be really useful to people who maybe don't understand inflation and maybe have some conspiratorial ideas around it, that this will either enlighten them, or enrage them. We'll see.
Mark McGrath: We’ll see. I think it's one of those episodes we do where it's purely a Canadian conversation, but the context is really, really important, probably to people outside of Canada as well. I think it'll be a good conversation for not only our Canadian listeners.
Ben Felix: That's a good point. I forget sometimes that we have a large audience that's not Canadian. But yeah, like you said, we even talked with Andrew about how Statistics Canada does things differently from some other statistical agencies. Hearing of how Canada does it is for sure interesting and probably applicable to other statistical agencies, but where there are differences, he did highlight that a few times. It should be interesting for people in other countries as well. All right, ready to go to the episode?
Mark McGrath: Let's go.
Ben Felix: Here we go.
***
Ben Felix: Andrew Barclay, welcome to the Rational Reminder Podcast.
Andrew Barclay: Thanks, Ben and Mark. It's an absolute pleasure to be with you guys. I'm a fan of the show, so happy to be here.
Mark McGrath: Nice.
Ben Felix: Awesome. That's very cool to hear. All right, let's start this off. Why is it important for a country like Canada to accurately measure changes in the prices of consumer goods?
Andrew Barclay: First of all, again, thank you for having me. I just wanted to reiterate that I'm not necessarily the expert on all of this. I think I could have pulled in a half a dozen different people off of the team, and they would have maybe even answered some of these questions better than I have, but I will try my best to answer everything that you provide. If there's any inconsistencies, anyone from the public feels perfectly free to message us and will be happy to assuage any confusion.
Ben Felix: Just real quick on that, I think you did talk to other people on the team about these questions beforehand. We're hearing from you, but we're getting pretty serious expertise behind the answers to questions you're going to give us.
Andrew Barclay: Yes, yes. Exactly. It's not just me flopping around, trying to answer some of these questions, but the more technical questions is a bit out of my wheelhouse, but we have the experts here. As for your question, most importantly, inflation along with a few other statistics that StatCan produces are really important for measuring the health of an economy, and the health of where the economy is going, and what direction it might take moving forward.
The government in the Bank of Canada also use the CPI, consumer price index and related indexes to make economic decisions, and also very importantly, measuring price change is important for a lot of social payments. CPP is tied to inflation. Some of the disability payments are tied to inflation, welfare payments, and even some minimum wages in some provinces are tied to the rate of inflation, so it's an important measure for those reasons.
Mark McGrath: How is CPI calculated?
Andrew Barclay: There's a complex answer and there's a more simple answer. The very simple area is that we're measuring everything that is consumed in the economy and comparing it over time, using constant quality and constant quantity. On a very, very simple basis, we're trying to compare apples to apples every single month that we can. The backbone of that is the basket, so imagine a shopping cart filled with all of the things that we consume in a year. That can range from food, that can range from rent to hotels, motels, video games, puzzles, everything that you spend money on is given a weight based on how much you consume it. That weight is then used to measure the influence of that commodity on the overall spending.
For instance, you're going to consume a lot more gasoline than you are milk, so the weight for gasoline is much higher than the weight for milk, and it goes through the entire basket like that. What we do is we essentially aggregate up. We'll start at the lowest level, so you could take something like one of the indexes in shelter is rental accommodation. Rental accommodation includes your rent, but it also includes your utilities, and it also includes your tenant's insurance. All of those are weighted and then they go up to the rented accommodation index, and then rented accommodation is a part of the shelter index and it'll go with everything else that is involved in measuring shelter.
Then finally, to get to the more complicated side, is that there's going to be specific ways to measure price change for different commodities. Take something like cruise ships, we measure cruise ships. When you go on the cruise, the price is measured when you made the purchase of that cruise. Some items we have immediate consumption, some items we have delayed consumption. A cruise ship is on average purchased about eight months in advance, so we price it eight months in advance.
There's other things like air transportation, different locations have different behavioural situations. If you're flying to Orlando, classic family, travel destination, it's likely that you have to book time off work, so you book that flight well in advance. But if you were, say, traveling to Frankfort, or Chicago, or cities that are more known for business, maybe something that you book closer to the date. We'll take a number of dates when pricing air transportation, for instance. Those are the specifics on how things are captured, maybe not calculated. The whole point of how it's calculated is to have these different methods for each index, depending on how we consume them.
Ben Felix: That's really interesting. How are the actual contents of the basket decided? Like you mentioned a bunch of stuff, cruise ships, gasoline, milk. How is it decided what actually goes in the basket and what weight is assigned to it?
Andrew Barclay: There's no decision here or there being made. All of the data is publicly available. It comes from the Household Final Consumption Expenditure data from the System of National Accounts. Everything in there is then reflected in the basket. There's nothing being decided on. It's more of just using that data to come up with the basket and then using some other data points. We use things like the telecommunications survey to figure out cellphone plans. We use travel data for the traveller accommodation and travel tours indexes. We use scanner data for the fruit from stores index.
Basically, the backbone is the consumption patterns from the Household Final Consumption Expenditure Data and then the meat and muscles comes from specific surveys for specific programs and indexes.
Mark McGrath: How frequently do you update the contents of the basket?
Andrew Barclay: This is something that's changed somewhat recently. We've done four consecutive years of annual basket updates. That's something we introduced at the beginning of the pandemic, partly as a response, but partly as the ability to do it was available. We do it every year. As for how often things change within the basket, it's really dependent. Obviously, the basket, as I said, is reflective of consumption patterns that are going on in the economy. If something changes dramatically or quickly, then you'll find it in the basket one year and out the basket the next year. Something like, DVDs or cassette tapes, records were out, and I think maybe they've come back in, but I'm not 100% sure on that.
A lot of the tech stuff comes in and out. We ticked MP3 players recently as well. DVD players were removed as well. We've added things in addition as the data has become better, so there's been quite the demand, for instance, for more food data, especially during the pandemic period when food prices seem to be always going up. We added more indexes for meat, beef, pork, and chicken. We've also recently added more fruits and vegetables. Not that they weren't included previously. They just weren't published, essentially. They were just aggregated up into beef was one. Then underneath now, we have all the different kinds of meat of beef, tuna, chicken, and so on. It's updated every year. That's a recent development.
Ben Felix: How is substitution, when people switching to cheaper alternatives when prices do change, how is that, or is that captured in CPI?
Andrew Barclay: Measuring inflation is somewhat of a balance. You can have stability, but lose relevancy. Or you can gain relevancy, but lose stability. We think that the annual basket is a good way to balance that out. Essentially, with substitution, what you're talking about is the substitution bias, which is inherent in any price index. As prices increase, you make a choice to substitute something else out of that. The basket weights are going to reflect previous consumption, as opposed to current consumption.
In 2013, I think we moved from four-year basket updates to two-year basket updates. Now 2020, we moved to annual basket updates. That's going to remove some of that substitution bias. It's never going to be perfect, because you still have that stability question in place, because you're not necessarily sure that things are a trend. They could just work themselves out in the wash. It could be something like, beef prices are really high this month, so I'm going to buy pork, and then it flips the next month. You don't want to be constantly changing your weights to reflect that constant change, which is why I think the annual basket update is the perfect situation, we think.
Mark McGrath: Something we hear a lot about is this concept of shrinkflation. Prices staying the same, but then the quantity of goods being reduced, right? Like, your bag of chips that used to be 500 grams is now 400 grams, but it's the same price. How does shrinkflation get captured in CPI?
Andrew Barclay: Firstly, and importantly, the CPI accounts for shrinkflation. This is something that's been happening forever. When we've been questioned about this earlier, I've looked back at our IMF guidebooks to see if the wording has changed, if this is a newer phenomenon that other statistical agencies are facing. I found that the wording for quantity adjustment, which is shrinkflation, hasn't changed since at least 1986. This is nothing new. It's something that we do all the time. It's baked into our process to maintain constant quality and constant quantity.
If something gets flagged, if a bag of chips is a smaller quantity, it gets flagged in our system, because it's a different product. We're trying to maintain a 500-gram bag of chips to a 500-gram bag of chips. In one month, there's not a 500-gram bag of chips anymore. Then we know that something's changed, and then we have to adjust for that. We also recently released a shrinkflation infographic, which found that about 30% of eligible products in the food component were impacted by shrinkflation from 2021 to 2023. When there is a change in product sizing, adjustments are made in the CPI to account for that impact on price.
Similarly, on the flip side of that, there are other cases in the index, where you get more and pay the same price. In which case, we also do a quantity adjustment, but it doesn't have a fancy fun name like shrinkflation. We haven't come up with a name yet for that, I guess.
Ben Felix: Can you talk about what all of the adjustments are?
Andrew Barclay: The whole goal of the CPI is to measure pure price change. That means constant quality and constant quantity. However, over time, obviously, products become outdated, technologies advance, and people's tastes evolve, and all of those things. To ensure that we're measuring the same items over time, we have to do constant quality. When a new product is introduced, say a new cellphone, we have to try and understand what is the price change, and what is the quality change portion.
One of the methods that we use for that is hedonics, as I'm sure you guys are familiar, and some folks are familiar with this, which essentially puts a price on the characteristics of a product. For a cellphone, we might look at the camera, the RAM, the storage, all of those things, and put a price on each of those characteristics. Then when a new product is introduced, we have a back price that we can compare it to based on these characteristics. We also use hedonics for other things, namely for rent, but we also use it when pricing things like ride sharing.
Once the prices are adjusted to maintain constant quality, the remaining price movement is then reflected in the pure price change. It's interesting, because we always get the shrinkflation side of things where you're paying the same for less. It's rare that we really talk about, especially on the electronic side, about the improvements that come at the same price, or roughly the same price. I think back to the very first television that I bought was a tube television. I was 16-years-old. It was $430. It was a 27-inch television. Now, I think about a television that you could get for $430. Quite the improvement. Those are things that we have to account for when we're doing this kind of work.
Mark McGrath: It's an incredible amount of data. I didn't realize you're pricing the components of, say, a cellphone, the camera and the RAM and everything like that.
Andrew Barclay: I think we're like the rest of society. The more data that we get, the more we can improve the CPI, or enhance the CPI as much as possible. That's what we're striving to do in the end.
Mark McGrath: Can you talk a little bit about why those quality adjustments are important to capture in the cost of living?
Andrew Barclay: Again, it comes back down to constant quality, where we need to be focusing on the apples-to-apples comparison. If it's an apples-to-oranges comparison, then we're not doing justice. We're not producing a CPI. Quality adjustments prevent the CPI from becoming outdated, or misleading in any ways. I think that we've also done a constant versus a quality adjusted CPI. There are differences, and it tends to push the CPI higher than it should be as well. This is the most accurate way that we can reflect how prices are actually changing in the economy.
Ben Felix: The quality is constant, but if people are paying more for cellphones, for example, that'll be reflected in the weight of the item.
Andrew Barclay: You're absolutely right.
Ben Felix: This is one of the things that I often see scepticism about, that quality adjustments are gaming the system. Or, I mean, you just said, without doing the quality adjustment, CPI might be higher. Some people see that and say, this is the statistical agency's way of putting downward pressure on inflation, and for some conspiracy theory reason. I'm not saying that. I don't agree with that, but why do you think some people are sceptical of the use of quality adjustments in calculating CPI?
Andrew Barclay: To some extent, within an environment where prices are constantly increasing, sometimes they feel like they're constantly increasing. For us to say, "Hey, this price is actually declining, or this price is actually decelerating," it goes against everything that we feel, and then we get maybe a bit defensive sometimes. The example that we always cite is laptops. My first laptop in first year university was maybe 1,200 or 1,300 bucks. Looking back on it now, it was great when I had it, but it's probably just so outdated. A laptop that I could get for $1,200 now is light years ahead of it. I think that's perhaps part of the story.
It might also be that the quality adjustments that we do are sometimes on products that aren't purchased regularly by consumers. You might not buy a laptop every year. You might have some price anchoring happening. You won't see it as much as you see the quantity adjustment that's happening with the bag of chips. You're buying chips every week, or whenever you're grocery shopping. You'll see that, and you'll see the quantity adjustment that we have to do to make that more expensive, so you won't necessarily see that sort of thing.
It's not a trick to lower inflation in any way. Most of it happens on the electronic side, which is a relatively small weight, but it's also absolutely necessary in order to measure pure price change. Otherwise, it would just be too subjective and people would criticize us for being too subjective, which would be fair.
Mark McGrath: It's funny you mentioned laptops. I just remembered my first computer back in the early 90s. I was begging my dad for a computer, so I could play the first Diablo game that came out, because my friend had it. We bought this super fancy computer and it was $3,000 at the time. I remember the hard drive was 500 megabytes. My friend's hard drive was 250 megabytes. When I told his mom that I was getting a 500-megabyte hard drive, she just scoffed, and was just like, “That's so absurd. You wouldn't fill that up in a whole lifetime.” I downloaded a PS5 game last weekend. It was 80 gigabytes for the one game. It's just interesting to look back on that old, but it was 3 grand. New gaming computer today is also 3 grand.
Andrew Barclay: Another example that I wrote down here was video game consoles and the different iterations, and the jump between the first gen consoles. That's monumental to the most recent ones. There's such a small difference now between the latest iteration and the last iteration. PS4 and PS5, maybe not that big of a difference, but there was a huge jump from Super Nintendo to Nintendo 64, or something like that.
Mark McGrath: I remember that jump very well. It was mind-blowing to me at the time. I can never go back and play a Nintendo 64 game now, because it just looks so terrible.
Ben Felix: Nintendo 64 was mind-blowing though, when it first came about.
Mark McGrath: That's what I'm saying. Going from Super Nintendo to 64, seeing all those polygonated images and stuff, it was like, “Oh, my God. This is virtual reality now.” Anyways, thinking of extreme periods of price changes, times like COVID-19, how was CPI adjusted during those times?
Andrew Barclay: First of all, professionally, it was really interesting. Really unique time. We had to navigate working the office, or working at home, like most people did, but we also had to maintain security. There was a while where there was a limited number of people with security clearances to be able to work from home. Shuffling what we could do and couldn't do was a really interesting part of the process. I know that's not your question, but within that context is how we were working. Crisis is the mother of all inventions. Crisis made us do a bunch of stuff that we were talking about doing, but maybe put off.
It was a good chance for us to modernize, for instance. We started to seek out different sources of data for collection, because basically, what we used to do was just send folks into stores. When I first started out here, I went to a downtown grocery store with one of these price collectors, and she spent about three hours in the grocery store just collecting prices in this handheld device. We'd get as much data as we could from the price collector, country of origin, price of stuff, quantity of stuff, all of that stuff. COVID, obviously, we couldn't do that. We couldn't risk employees and grocery stores were open, but anyways.
We went to scanner data. We went to web scraping data. We went to administrative data as much as we could. This, in many ways, enhanced the program, because we were getting more data and we were getting a better view of the entire ecosystem. We had scanner data in the CPI before COVID, but now we're more dependent on it. The enhancement to our data and the improvement to our data is really impressive. Canadians should feel really proud about the food data in the CPI in particular, and it comes from that scanner data, and it comes from having all of that data, so having weeks of data, as opposed to when we just send a collector into a random store on a Tuesday. That person might miss the sale that happens Wednesday, or miss the return from special on the Monday. Now, we have a census of prices. That was really good.
The basket was obviously a concern, because there were a lot of things that weren't available. We have a particular approach to things, specifically goods when they're out of stock, but our systems weren't designed to handle when services are out of stock. That was just a foreign concept to us. We had to modify our approach to that. We also released the adjusted CPI as well, using Bank of Canada data to update weights more regularly. We used their data and we compared it. There ended up being not that big of a difference between the adjusted CPI and the regular CPI, but it was still a great learning experience to see how things would look with a more frequent basket update, if you will.
At the headline level, obviously, there wasn't much difference, but there definitely was a big difference in areas where we would all expect there to be. Restaurants, tuition, women's clothing, insurance, those just come off the top of my head where they were coming from, and it makes sense. That's COVID for us in a nutshell.
Mark McGrath: You mentioned the term scanner data a few times now. Would you mind just explaining what that means?
Andrew Barclay: Scanner data is point of sale data, depending on how you want to call it. Basically, a number of grocery retailers send us the scanner data. Every time you go through the grocery aisle and scan an item, we get that data, not your personal data in any ways. It's just the product data. It covers about between 70% and 80% of the Canadian market share for grocery prices. It's the absolute gold standard for price collection in the world, in fact.
Ben Felix: Why does Canada only report on one CPI measure? I think in the States, they have a couple different measures for different population groups, but we only have one.
Andrew Barclay: To be honest, I think this might be a bit of a problem with our communication strategy to some extent, or a challenge of our communication strategy, because we do produce a lot of other indexes. We produce an all items, excluding food and energy, all items excluding shelter. We produce a whole bunch of special aggregates that are out there that can be used by the public. We also produce the core measures for the Bank of Canada. There are other aggregates that are produced. It's probably our communication strategy that's part of the problem. It's to why people don't have access, or maybe can't find those.
As for your question about different measures for different groups, we've studied this before in the past. We used to produce CPI for specific groups. In my research for this podcast, I came across this really interesting article they wrote in the 80s, where they produced a low-income families, unattached individuals, and low-income seniors CPI, along with the all-items CPI. I think they started studying it from ’74 to ’78. They introduced it in ’78, and then it ran until, I think, the late 80s, and it basically showed no difference between the three measures over the eight-year period.
There's some ups and downs and some variability within it. But for the most part, it showed no difference. We also did a study in 2019 on a CPI for seniors, in which case, it looked at prices over a five-year period, and it found a 10 basis point annual difference between the CPI for seniors and the all-items CPI. It's not really that big of a difference. We did a similar study in the late 90s for seniors and low-income folks, and there wasn't much of a difference. I think part of it is just that there isn't that much of a difference.
Mark McGrath: If you keep going down that path, you can arrive at this concept of personal inflation, right? If you keep grouping people, you can get to this point where everybody's personalized inflation rate is different. We've been talking about video games, for example, and if I spend a disproportionate amount of my money on video games and video game inflation is high, then my personal inflation rate might be higher than what you guys report. Do you think it makes sense for people to calculate their own personal inflation rate?
Andrew Barclay: That's a really great point, Mark. First of all, we have a personal inflation calculator on our website. I think a handful of media outlets have put out personal inflation calculators. I think they are really interesting to see how your spending decisions are reflected in the data. Maybe you can make adjustments to save more over time. I think it's important to note that your personal experience of inflation probably won't match the Canadian averages due to differences in those spending habits. It's important to note, the all-item CPI, because price index is an average Canadian.
If you're a renter, you're likely not a homeowner, but owned accommodation is a huge part of the CPI. Similarly, if you own your own house, you're probably not renting, but rent is in the CPI. In that case, it's best to maybe look at your own personal inflation. Going back to my previous point there, demographic-specific indexes that StatCan has produced in the past track pretty closely. Where you might see some differences are probably in the individual indexes. When we did the senior price index, we found that, again, this probably isn't shocking to folks, but at a statistical agency, we need data to support some conclusion.
We found that seniors were probably out of their mortgage, so they were spending very little on mortgage interest costs, but they were probably a little bit unhealthier compared with the youth cohort, so they were spending a bit more on medications. Similarly, we could probably assume that young people are spending more on rent and probably less on medications. Those specific circumstances that you described, Mark, are definitely true.
The other useful thing about the personal inflation calculator is if you are negotiating a wage increase, it might be a useful number to argue that you want to maintain your purchasing power and that the official CPI doesn't represent you, but this other product that is also produced by Statistics Canada says that I should be getting a higher wage.
Mark McGrath: I'm going to keep that in my back pocket. My boss will be listening to this episode.
Ben Felix: That's a really interesting idea, though. I had not thought about using that tool for that purpose. You made an interesting point. The composition of the demographic-specific baskets can be very different, but it sounds like, it all comes out in the wash to relatively different rolled-up differences in price changes.
Andrew Barclay: Ben, it has to do with the relative weight. Shelter is about 30% of the basket. Food is about 16%, clothing's about 5%. Shelter and food aren't going to change that dramatically based on different demographic groups. If those are constant, then you just get into the margins and those margins aren't going to be that big. I think that's essentially why.
Ben Felix: I want to ask you about something that you guys have done papers on that are some of my favourite papers on this topic. I've enjoyed reading them as I've tried to understand the answer to the question. What is the difference between the price of a house, the sticker price that someone sees, like a million-dollar home or whatever, what's the difference between that and the cost of housing?
Andrew Barclay: I'm glad you read the papers. That warms my heart. The methodology for owned accommodation services is that housing is a service, as opposed to the purchase, which is an asset. In the CPI, we only incorporate the price of that service into the index, as opposed to the asset side of things, because we don't think the purchase of a property is a consumer good, and that's essentially what we've done. That being said, there are several components within the CPI that do include housing prices, or they'll impact the CPI based on the change in housing prices. We have other owned accommodation expenses, which would include your realtor fees and your lawyer fees associated with buying a new house, or buying a resale house.
We also have homeowners replacement costs, which uses the NHPI, the new housing price index. If the new housing price index is going up, homeowners replacement cost is going to go up as well. Similarly, if the price of a house is going up, property taxes are also likely going up, same with mortgage and home insurance as well, and maintenance and repairs as well, which is a factor as well in housing, is also going to be influenced to some extent by housing prices. If housing prices are going up and there's a construction boom, then there's probably going to be some supply issues associated with those renovations.
Mark McGrath: How does StatCan calculate the cost of owned housing for the CPI?
Andrew Barclay: The technical way we describe it is it's a variant of the user cost approach. We just measure the ongoing costs of homeownership. I mentioned home ownership placement costs, property taxes. We also measure mortgage interest costs of the mortgage interest component of your house, insurance, maintenance and repairs, other owned accommodations. All of those costs are in our shelter index, and they all come from various sources. For instance, our mortgage interest cost index comes from the Bank of Canada's A4 Insurance data home ownership placement cost. The portion of it comes from the new housing price index. Property taxes are a bit labour intensive, but they come from every municipal office in the country. Home ownership insurance. It uses a broad range of consumer profiles extracted from some alternative data sources.
Then maintenance and repairs, we get the data from retailers, and then we also use the construction union wage rate index as well. Then other owned accommodation, which is the lawyer fees and the realtor fees, comes from the new housing price index and then CREA data, so the Canadian Real Estate Association data.
Ben Felix: Do the municipalities send you the property tax data automatically?
Andrew Barclay: It's an incredibly labour-intensive exercise. The folks who work on it do an amazing job. It comes out in October. They probably start getting the data July, August trying to get their ducks in a row and then go through it. It's one of those presentations I wish we could make to the public, because the commodity experts who work on it will literally go from coast to coast and go through small town. In Quebec, they've raised their sewer rate by this amount. That's why it's an incredible bit of work. They should be praised for it. I respect what they do.
Ben Felix: That is wild. We've been going through this project, where we wanted to compare the financial outcomes for renters and owners going back to 2005 to 2024. It's full 20 years of data. One of the things we had to do was get the municipal property tax data. We only look at 12 cities, so nothing like what you guys are doing. But just that, for those 12 cities, going back to data that predates what's posted publicly on their websites, it's crazy. You have to go to each one and ask them. Tons of respect for what you guys do with the amount of data collection that you're doing.
Andrew Barclay: The other challenge is that we also have to flick the data to make sure that it's accurate. We'll oftentimes go through the local newspaper who's always reporting on these things. As a side note, I was just talking to my colleague this morning and she had tremendous respect for the podcast you guys did on renting versus owning. It's a really good podcast. Not that I should push your product on your show, but if anyone hasn’t listened to that, great show. Great episode.
Ben Felix: Awesome. Thanks. I'm hoping to do a paper based on that. I just needed to finish – I wanted to get the end of 2024 data, so it's a full 20 years. Then we had a few more property tax rates to clean up. Hopefully, later this year.
Andrew Barclay: For sure.
Ben Felix: How does Statistics Canada's approach for housing? The modified user cost of housing that you just mentioned, how does that compare to what other statistical agencies are doing around the world?
Andrew Barclay: First of all, there's no real clear consensus regarding the best methodology for owned accommodation. Oftentimes, it's the availability of data and the specifics of the market, that is the reason for certain countries doing it the way that they do. Probably, the most popular is the rental equivalence model, which is used in the US, Mexico, Germany, and the UK. It basically relies on estimates of the price of current consumption accommodation services, while rental equivalence prices do not directly reflect the housing pricing effect. They do capture the indirect changes that occur when prices increase.
No country uses the net acquisition model, so nobody prices a purchase of a home. But there are other methods. As you know, we released the paper, I think last March, and we showed what the CPI would look like with the different models. We found it was a lot more hectic. It was a lot more up and down. Rental equivalence, I have an old colleague who used to say, it's like a freight train. Once it gets going, it's tough to stop. That's part of the reason why rental equivalence in the US hasn't slowed nearly as much as, say, shelter in our index has.
That being said, their data is really tailored to the rental equivalence approach. I don't know why they've chosen their model. You probably have to ask them, but I think that's one of the factors that goes into the decision-making they've went in using that index.
Mark McGrath: What do you think are the benefits and the drawbacks of using StatCan's approach?
Andrew Barclay: We never like to talk about the drawbacks, but there are drawbacks. First of all, it does fit the user purpose. StatsCan has a quality dimension criteria, and those are fully met. It's consistent with the cost of living, and it's suitable for escalation of income and payments. For that reason, it's a benefit. The drawback of our approach is replacement costs. It's a notional cost, which is based on the hypothetical depreciation rate. We've been challenged in the past that we're double counting by including maintenance and repairs, and homeowners replacement costs.
My director made a great point when I was asking about this last week, and he was saying, "Well, maintenance and repairs tend to be renovations and tend to be fixing a kitchen, fixing a bathroom, that sort of thing. Replacement costs are probably more like the bones of the building. How often are we redoing the foundation, or redoing the skeleton of the house? It just doesn't happen." That's why we think replacement costs is pretty important to include, even though it can be considered a drawback by some. There's also the circularity of the mortgage interest cost index. As the policy rate changes with the Bank of Canada, it'll go up to reflect that, and then it'll go down when the policy rate is going down. For that reason, it's a bit of a drawback.
Ben Felix: Doesn't that make sense though? As the cost of capital is changing, the cost of housing is changing?
Andrew Barclay: Absolutely. We get lots of questions where it's a bit circular. The Bank of Canada is raising interest rates to fight inflation, but MICI is going up. I think the Bank of Canada talked about it in a few of their NPRs, monitor policy reports, where they talked about how their expectations on shelter, they misbehaved a little bit this time around. Usually, when MICI interest rates go up, then rent behaves a little bit differently. Or in the past, it's behaved a bit differently, and it didn't this time. For that reason, they were a bit turned off.
Ben Felix: The maintenance costs and depreciation as separate items, that makes sense. I don't think that's weird at all. Lots of other academic papers I've read on that topic also treat them as separate. Sometimes you'll see a net depreciation, that's net of maintenance spending. It makes sense that they're separate items, because I think they are, for exactly the reason that you said. What about rents? How are rents calculated in the CPI?
Andrew Barclay: Rent's an interesting index. Rent is collected using a questionnaire in the labour force survey. It's a supplementary question. Obviously, the labour force survey measures unemployment, but there's a whole bunch of other questions that are in that survey. The survey follows a household for six months, and then one-sixth of the sample is replaced every month. Dwellings are followed, not the households. The tenants might change during the survey period. Approximately 8,000 units can be used in the CPI rent index calculations each month. As of January 2019, we started using a hedonics model, as we mentioned before. This is putting a price on characteristics, as we said. We looked at different variables, such as the age of the dwelling, the number of bedrooms, the type of dwelling, vocational characteristics that are captured by postal codes, and then we just make sure that we're comparing the same things over and over, and we're not comparing a one bedroom to a three-bedroom. That's our thing.
Then lastly, the rent index encompasses the whole market. That includes folks who just signed a new lease, folks who are in a lease, folks who've renewed a lease, people who are in a rent control building, people who are not in a rent control building. All of that is covered in the index. Oftentimes, we maybe get some questions about rentals.ca's number, and we don't necessarily go up, or fall as quickly. Part of the reason is that they're doing listed places, and we're doing the entire census of the rental market.
Ben Felix: Yeah, it makes sense. Market price rents versus average rents that people are actually paying.
Andrew Barclay: Exactly.
Mark McGrath: How well does CPI capture perceived inflation from surveys?
Andrew Barclay: We're always bantering about perception. We actually don't do any perception surveys, but we do track the Bank of Canada's two surveys, the survey of consumer expectations and the business outlook survey quite closely. We did a study in 2022, specifically about the difference between the perception and the actual CPI. It's not something that we do, but it is something that we look at a lot. Part of it is also, goes back to that messaging and the communication, where are we doing enough to share with Canadians what's happening, and why maybe their perception of inflation might be different.
Ben Felix: Is there a difference between the perception and the actual measured CPI?
Andrew Barclay: There's been a gap for a number of years, especially since post-pandemic, probably since 2022 or so, there's been a big gap between consumer expectations of inflation and actual inflation. It's a bit less noticeable on the business side of things, which is interesting. We're not sure about why, what's driving that? We have some ideas, and we can talk about those ideas if you'd like. It is a noticeable gap, and it's noticeable in Canada more than elsewhere. They don't necessarily have the big perception gaps that we do.
I'm sure you guys follow the University of Michigan Consumer Expectations survey that came out a couple of weeks ago. I was talking about inflation in the US at 3.5%. In Canada, in the Bank of Canada's survey of consumer expectations, there's a big section of the population that thinks we're either going to be in deflation, or in inflation above 5% a year from now. That's pretty scary. If we're in deflation, or if we're in a situation of inflation at plus 5%, maybe the tariffs change part of that equation, but we're probably in a pretty bad situation overall as an economy, if that's the case. If a significant chunk of Canadians believe that, then it's probably something to do with how we communicate our numbers, at least part of the story.
Ben Felix: We will ask about your ideas behind what you think drives the gap, but I always want to ask before that, is the perception versus actual inflation gap the same across different population groups? Is there variation there?
Andrew Barclay: That study that we did, it's on our website. You can read it freely. There were some differences between groups for sure. Households that are homeowners versus renters, lower income versus higher income, households with a university education and without. We looked at all of those. I was really interested. In that paper, we found that consumers age 31 and up displayed a stable perceived inflation rate around 2%, while younger consumers had a higher and more volatile perception of inflation, which I thought was interesting. That gap between groups is noticeable, and it's also probably due to how those consumers spend their money, or where they spend their money, and that makes total sense.
Headline inflation over the last five years, from January 2025 to January 2020, I think, headline inflation group almost 20%. Let's get specific, 17.9%. Food during that same period, 21.8%. Shelter during that same period, 27.3%. Between food and shelter, those are your essentials. Those are things you worry about. Those are things that you're spending on a continuous basis. If that eats up a bigger chunk of your overall expenditure, then you're likely seeing inflation at a higher rate than that 17.9% that I started with. That only makes sense to me, at least.
Mark McGrath: What are the main drivers of the inflation perception gap?
Andrew Barclay: I think we could talk about this for an hour and a half. I don't know that we have any specific data that I could share with you. We don't have the data period, so it's not like I'm holding it back. But we do have some thoughts as to why these things might be happening. There's a misunderstanding between price levels and price change. We've tried to change that narrative by putting some longer timelines in some of our releases. In the behavioural economics literature, there's always talk about heuristics and about price anchoring and loss aversion and things like that. When someone says prices have increased by a certain amount, they might say, “Okay, well, prices have an increase.” Food prices declined January 2025 compared with January 2024 by 0.6%. That's great. That's 12 months. But over the five-year period, they've increased 21.8%. Over the four-year period, it's 20.6%.
Consumers haven't had a chance to anchor their price expectations at this new level. We've seen this dramatic level shift that consumers haven't yet come to grips with, I suppose. Their perception then is just that prices are a lot higher. They couldn't have declined 0.6%. It's got to be something much bigger. They'll quote a 20% number. You know what? They're bang on. Four years ago, prices were 20.6% higher compared with four years ago. I think that's maybe part of it.
I think the frequency of purchases is also important to keep in mind. Food prices, gas prices, items that are purchased on a regular basis tend to hit you in the head more often, versus prices that you don't purchase all the time. I mentioned that $430 TV that I bought when I was 16. How often you're buying a TV? A lot of items in the CPI. You're not buying that often. Maybe you don't notice the price change as much, or as frequently. Then, I think there's also those large item purchases, couches, or electronics, or appliances, things like that. Couch prices, we saw go up quite a bit during the tail-end of the pandemic when we were having those supply chain issues. The cost to ship an item from Asia was quite high. We saw pretty big increases in furniture prices.
It also coincided with the recent peak of the housing market, in which case when people buy a new house, oftentimes they buy a new furniture. They wouldn't necessarily see, they've just bought a, I don’t know, $500,000 house to spend down $5,000 on new furniture, versus $5,500 in furniture. Within that context of those big purchases, a 10% increase, which is a difference between $5,00 and $550 is big, relative to an all-item CPI that's supposed to be within target of 1% to 3%. For all of those reasons, we see this perception gap that's emerged for sure.
Ben Felix: We talked about quality adjustments earlier. What role do you think that plays, if any, in the inflation perception gap?
Andrew Barclay: It's a great question, because I think it fits within the context of prices are going up. How can you say that they're going down? Maybe it does speak to that heuristic of loss aversion, where I don't see my new cellphone as a quality improvement. I see my new cellphone as just a new cellphone, but we have to treat it as a different kind of cellphone, because that's what it is. Where they're most punished is on those frequent purchases. You might buy a cellphone every two years, three years, something like that. It's an infrequent purchase to begin with. Versus the bag of chips that you've been purchasing every week for 10 years, and all of a sudden, the bag is smaller. You're upset with someone for that.
If the inflation number is saying, hey, prices are going down, or prices are not increasing at the same rate that you do as you're upset about this bag of chips, or this other item at the grocery store, it makes sense why you would think that the inflation was higher than it actually is.
Mark McGrath: We talked a lot about housing and it's a hot topic, obviously, and it always is. I live just north of Vancouver, so I know what housing inflation looks like just as a bystander. How important do you think housing is in explaining the perception gap?
Andrew Barclay: Statistics Canada does produce other numbers, as you guys know, that show price of housing and how the price of housing has shifted over the past 20 or 30 years. It's one of those things where the CPI isn't the right measurement to have the price tag of a house. Within the context of higher rent prices, of higher overall costs, rent prices over the last five years have increased 26.2%. If that's a significant chunk of your spending, you're going to think that the inflation rate is higher than it actually is, which makes total sense. That's perhaps why the personal inflation calculator is so important. As to why or how we can try and communicate with the public that, yeah, you are experiencing a higher price level than what's happening in the all-items number.
It fits within that broader context of essentials and how essentials fit into spending behaviours and then how they fit within the CPI itself, because they certainly are increasing at a faster rate than some of the other items in the index. I always bring up clothing and footwear. Clothing and footwear prices have declined almost 5% compared with five years ago, and we don't talk about it at all.
Mark McGrath: I don't know if Ben's have, because Ben has size 24 custom-made shoes. I don't know if those get more expensive or not.
Ben Felix: My size, 17 or 18, Mark. Not size 24.
Mark McGrath: Close enough. Everything over 15 is just a big, ridiculous number.
Ben Felix: They're hard to find. It's true.
Mark McGrath: I believe it.
Ben Felix: I think on the housing, the difference between house prices and the cost of living in a house, I think that probably also contributes to perception being different from the way that the cost of housing is measured. People see house prices not so much recently, because they've fallen a bunch. But when they were going up and up and up, people were saying, well, the cost of housing is going up by that much, but it's not really
Andrew Barclay: I also think that the mortgage interest component, too, is a bunch of folks who are going to have to renew their mortgages and they were used to prime plus 0.25. Now, we're at a slightly higher rate, but historically, it's not that high. If all of a sudden, the interest component of your mortgage payment has gone up by a lot, then you're going to perceive that, because you're also going to be spending less on other things that are important to you. You're going to blame higher prices, rightfully so.
Ben Felix: What do you guys do to try and address that? You said that you have a lot of internal banter about inflation perceptions. What do you guys do to try and communicate some of the stuff that we're talking about to the public?
Andrew Barclay: Our official release, The Daily, it comes out on release day. We've tried to incorporate longer time horizons in some of our analysis. We've tried to point out things, like food prices have declined by 0.6% in January. But they're still a lot higher than they were five years ago, or four years ago, or even three years ago. Framing it within the context of we know that prices are higher. The traditional measures that we use to communicate price change, is usually the month over month and usually the year over year, are perhaps a bit outdated within the context of this period that we've just gone through. It's one of the ways we've tried to communicate.
We've tried to host regular AMAs on Reddit, where we do get a lot of questions like this, and those answers are up there permanently and folks can go back and look at them. We've done presentations before. This is a great opportunity for us. Again, thank you for the opportunity to discuss the program. We try to reach out to Canadians as much as we can. I work on a great team that handles most client requests, and we're happy to talk to anyone. We're happy to email anyone. We work for you guys. We work for Canadians. Our job is to disseminate this work and to share with you what is essentially yours. We try to reach out and we'll keep trying and we'll keep exploring new avenues to approach Canadians.
The good news is that perception gap has started to shrink, which is a good sign, I think. But it might just be a lagging indicator as well that it just takes time for people to realize that the prices aren't shifting nearly as much as they were in 2022.
Mark McGrath: What does StatCan do to make sure that the differences between inflation perception and CPI are not reflective of the real differences that should be captured by CPI?
Andrew Barclay: Customer expectations in some of the other countries, UK, US, and some of the European countries, is more in-line with their CPI, which again, does suggest probably a communication issue that we're having. I think the way that we try to make sure that it's not a real issue is we have an independent board, which oversees our work. Their independent expert advisory committee, they're made up of statisticians from around the world. They're made up of professors around the country. They know what they're talking about. If we have a problem, or if we have a challenge, we go to them and ask for their advice.
We seek as much outward advice as we can to make sure we're doing everything correctly, or everything appropriately. Make sure that other statistical agencies who've run into similar situations are handling it in a similar way. It's a constant process of making sure that we're doing things right and trying to be as honest as we can be about our limitations. At the same time, trying to improve and enhance the program as much as we can. It is important to understand what these real differences might be and where we might be failing in either communication strategy, or in the CPI itself.
If it's within the CPI itself, that's a huge problem and it's something that we should have addressed before it became a problem. Luckily, I don't think it is, and I think it's because we have all of this support in the background, making sure that every part of the CPI is strong analytically, that there's a good foundation. We have two price experts that are hovering above us at all times that are really, really good at what they do. One's a historian of the CPI, so he's great to go back to and talk to about what we did back then, and the other gentleman designed, or helped to design, the core measures for the bank. He's someone we always go to whenever there's a problem, with, hey, are we missing this, or is this something that we can handle better?
Ben Felix: What index have you received the most criticism for?
Andrew Barclay: First of all, I think essential purchases are often in people's eyes. Maybe for this reason, we've faced a lot of criticism on how we price some of those essentials. But I think it's really ironic that we face a lot of criticism on the food index in particular. I say, ironically, because as I mentioned earlier, food prices in the CPI are captured using that point-of-sale data, which is honestly the gold standard of price collection. I don't think we could do it any better. It's incredibly impressive.
We take two weeks of data every month, all across the country from stores across the country, different retailers, everything. It's a census, essentially, of a significant portion of the food market. It gives us quantity. It gives us price. It's so helpful for constructing the weights. It's so ironic to us that we're being challenged on that index. We've had to go before Parliament a few times to address concerns. We talked earlier about the shrinkflation part of things. We've had to put out work on that, because it's something we obviously do. It's interesting that we've faced a lot of pushback on that food when it is such a quality index. That's one of them.
Cellular service is something – a bit of a challenging time. I don't know if we've gotten too much pushback or criticism for, but it's a challenging index in particular. This was the index I was referencing when I was talking about the price expert coming in at the last minute when the market changes really, really quickly. It's actually something I worked on when I was a young production analyst. I think it was 2019. All of a sudden, the cellular companies came out with these unlimited plans. We didn't know how to work that into our profile, because at the time, cellular plans, you pay for long distance charges. You pay for a certain number of SMSs. You pay for data, obviously. We didn't know how to react.
At the same time, it's probably less of a thing now, but even five or six years ago, you remember when you bought a plan, the cellphone came with the plan. That was really unique to the North American market, or to the Canadian market in particular. We were pricing those things. It was a challenge to work its way through those changes in the market to now where we're at, where there's a lot of bring your own device things, there are separate charges for the phone. We've moved away from having to pay for long distance, having to pay for text messages, that sort of thing. That's been unique.
Then, based on the data that we get, or the quality of data that we've got, it started to improve a lot lately, is that we're pricing what's available online. We're not getting the buyback plans that you might get if you cancel your plan and somebody calls you back and is like, “Hey, can you come back? We'll give you this rate.” We weren't getting that. We weren't getting retention offers. We weren't getting cold called offers that were just, come join our plan. Then, there were also always questions about the utility of data, or the utility of each additional amount of data. There's a big difference between one gigabyte of data to two gigabytes of data. That has dramatic impacts on the utility of the experience of the user.
For all intents and purposes, one gigabyte to two gigabytes is the same as 42 gigabytes to 43 gigabytes. In both cases, it's one additional gigabyte. I think there was legitimate concerns about the utility of all of that. Are you using all of that? The way we got around that was to say, "Well, it is the consumer choosing that plan, as opposed to it being forced on you." If you had a choice between, say, a 10-gigabyte plan, and let's say you use nine gigabytes of data every month, optimally, you would get a 10-gigabyte plan. Let's say, you went to the store and you're like, “Hey, I could get 45 gigabytes for the same price. Well, why wouldn't I get 45 gigabytes?” Now, instead of using nine gigabytes, maybe use 20 gigabytes. There's still a lot of excess data and utility of the data is still in question.
You found a way to use that extra data. We figured that the consumer would also do that, and the market would also do that as well. We're steps away from a very data-intensive app that everyone wants that will now require the excess data that you weren't using. We should assume that the public knows what they're doing when they make their purchase and trust them. That's how we've dealt with that challenging index in a way.
Mark McGrath: That's wild. I've never considered any of that. It's really interesting to hear how you guys think about it. You went into this a little bit, but how do you guys respond to, or incorporate feedback from that criticism?
Andrew Barclay: Criticism feedback, it's always welcome. At the end of the day, again, the product that we produce is for Canadians and they need to feel confident in our work. If you have any criticisms, or you think we're doing something wrong, please feel free to reach out to us and we're happy to take any criticism and try to make the product as good as we can. Because at the end of the day, that's our goal. We also do public outreach, or try to reach the public as much as we can, regularly engaging with folks on social media and trying to respond to questions and comments in an honest and professional way.
Our work is supervised by an independent committee and any questions that we might have about methods goes through that framework. They can bring criticism to us. We can bring concerns that we might have about certain things to them. There's a lot of forums for talking about that feedback and talking about that criticism. Again, we welcome it. Again, we're here for you as much as we can be.
Ben Felix: One of the reasons we wanted to have someone from Statistics Canada on is that Mark and I interact with a lot of people who are very sceptical of Canada's inflation measures. They think that real inflation is 20% a year or something. Completely ridiculous thinking in my opinion. What's the main message that you have for listeners who are sceptical in a conspiracy theory type of way, of the way that CPI is calculated?
Andrew Barclay: I appreciate the opportunity to answer from our perspective. I think first and foremost, we want people to know that Statistics Canada is independent from politics. It's in our mandate to provide insightful and accessible data to support good decision-making through trusted data, statistical services, and insights required to support these decisions. That's the corporate speech that's on our website, but I think it's very, very true.
On a more personal basis, I work with around 140 dedicated public servants who are vested in telling the truth. We're all data wonks. In the nine plus years or so that I've worked at Statistics Canada, there has not been one single instance of any type of political interference, or any type of pushback. We do not share the data with our minister. We don't share the data with the government before it goes out to the public. We brief up to the deputy minister level, who's appointed by the minister, but he's been a career statistician. Really great guy who grew up in prices. Worked in the national accounts. Really, really intellectually honest. I think for those reasons, people should be proud.
I'm proud of Statistics Canada. I'm proud to work here. What Canadians expect and Canadians want in their public service and in Statistics Canada and the data is integrity and honesty. I think that's also what we want. We push that and we try to be as honest as we can, and it's forthcoming. Everything that we've talked about is available on our website. We're fully transparent with our methodologies. If people want to know more information, or want to reach out to us and yell at us, or praise us, we're happy to make those conversations and try our best to convince folks that they should trust us, so that the numbers that they're getting are worth their time.
We also know that we're not perfect and that we're always striving to be that, or trying to improve the product. We recognize certain limitations. There are data limitations that come into place. We can try our best to get to there. It's fair to be sceptical and I appreciate the scepticism, because I think it will produce a better product in the end. Because if you say, “Hey, why aren't you doing this?” Or, the complex discussion I just had about cellular, if you're like, “That's hogwash, and you guys should think about this and this and this,” maybe we should. We would welcome that conversation and welcome any insight that we can gain from folks who are smarter than us on some of these subjects for sure, because it's about producing the best product that we can.
Mark McGrath: Love it. We've got one more question for you, but before we go to that, I want to thank you for coming on. I think that was a great discussion and answered a lot of questions I had about CPI, and I think our listeners will take a ton from it. Thanks again. The last question we'd like to ask as question to every guest. Andrew, how do you define success in your life?
Andrew Barclay: Well, first of all, thanks Mark and Ben. We genuinely appreciate the opportunity to speak with you guys, and great questions, and I hope that we maybe produce more questions and people can again reach out to us as they see fit. Saving the biggest question for last is always interesting. I know you guys ask this question to some guests, so I thought about it a little bit and I wrote down probably some nonsense. But I think success, to some extent, exemplifies some goal, or some need to achieve something. I sometimes have difficulty with that, because maybe sometimes you miss the journey.
I was thinking about this on the walkover to work this morning. I was thinking about climbing to the top of a hill. The goal is the top of the hill. But if you're only focused on the top of the hill, then maybe you missed the banter along the way, or you missed the huffing and puffing all the way to the top. Mandela, I think, wrote about there's always more hills to climb and how once you've reached the top of one hill, then you realize that there are a whole bunch of other hills that you need to climb. Maybe that's just coping out, because I think anyone who thinks about their lives a lot, or thinks about what they should be doing in their lives is probably going through some constant existential crises, which might describe me in some ways.
I like to think that as I've aged, that I think committing to trying to be a good person and trying to be intellectually honest with the world around you and those that you love is probably the best way to describe success in life, at least in my life. Again, maybe that's coping out. I have some subconscious drive that says you haven't achieved nearly as much as you should have at your age or whatever, but if we look at things in a very simplistic way, we can see a lot of success in our own lives.
Ben Felix: It was an incredible answer.
Mark McGrath: Yeah, great answer. I just finished reading a book called The Courage to Be Disliked, I want to say. It's a conversation between a Japanese philosopher and a student goes into a lot about what you said there. That might be a book you want to pick up. I can't remember the author's name, but I believe it's called The Courage to Be Disliked. It’s a great book.
Andrew Barclay: The Courage to Be Disliked.
Mark McGrath: Not that you're disliked, or not likable. That's not the intent. The book isn't actually about being disliked, but it's a very stoic approach to success and that type of thing. I think you’ll like it.
Andrew Barclay: Thanks. I appreciate that.
Ben Felix: That was a great conversation, Andrew. We really appreciate you coming on the podcast. And thanks to Statistics Canada as well for supplying you to us.
Andrew Barclay: My pleasure. Keep up the good work. Again, thank you so much for the opportunity. It really was a pleasure.
Is there an error in the transcript? Let us know! Email us at info@rationalreminder.ca.
Be sure to add the episode number for reference
Participate in our Community Discussion about this Episode:
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
Links From Today’s Episode:
Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/
Rational Reminder on X — https://x.com/RationalRemind
Rational Reminder on TikTok — www.tiktok.com/@rationalreminder
Rational Reminder on YouTube — https://www.youtube.com/channel/
Benjamin 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
Episode 323: Renting Versus Buying a Home in Canada 2005-2024 — https://rationalreminder.ca/podcast/323
Statistics Canada | The Daily — https://www150.statcan.gc.ca/n1/dai-quo/index-eng.htm