The following is the text of Canada's consumer price index report for August released by Statistics Canada. The Consumer Price Index (CPI) rose 3.1% in the 12 months to August, mainly as a result of higher prices for gasoline and food purchased from stores. This follows increases of 2.7% in July and 3.1% in June. On a seasonally adjusted monthly basis, consumer prices rose 0.3% in August. The 0.4 percentage point difference between the year- over-year increases posted in August and July was mainly the result of price increases for the purchase of passenger vehicles, electricity, homeowners' home and mortgage insurance, telephone services and jewellery. The 12-month change in the CPI and the CPI excluding food and energy Energy prices rose 13.4% during the 12 months to August, following a 12.9% increase in July. Gasoline prices went up 22.8%, compared with the 23.5% increase in July. Prices for fuel oil and electricity also rose, while natural gas prices fell. Food prices went up 4.4% in August, following a 4.3% increase in the previous month. Consumers paid 5.0% more for food purchased from stores and 2.7% more for food purchased from restaurants. Food and energy prices rose 7.2% in August, following a 7.1% increase in July. Excluding food and energy, the CPI increased 1.5% in August after advancing 1.2% in the previous month. The 12-month change in the gasoline price index since August 2006 Seasonally adjusted monthly CPI advances On a seasonally adjusted monthly basis, consumer prices rose 0.3% from July to August, following a 0.1% increase from June to July. The transportation index, which includes the purchase of passenger vehicles, rose 0.8% following a 0.1% increase in the previous month. The food index went up 0.3%, after advancing 0.5% in July. Seasonally adjusted monthly Consumer Price Index advances The seasonally adjusted shelter index rose 0.2% from July to August, while the household operations, furnishings and equipment index increased 0.4%. Conversely, the recreation, education and reading index, as well as the clothing and footwear index, decreased 0.2%. 12-month change: Prices increase at a faster rate in five of the eight major components On a year-over-year basis, prices increased in all eight major components of the CPI in August. Except for health and personal care, clothing and footwear, as well as recreation, education and reading, prices rose at a faster rate in August than in July. The cost of transportation increased 7.0% in the 12 months to August, following a 6.5% gain in July. Consumers paid more for gasoline, passenger vehicle insurance premiums and air transportation. Food prices rose 4.4% in the 12 months to August, after increasing 4.3% in July. There were broad-based price increases for food purchased from stores. Consumers paid more for bakery and cereal products (+6.1%), for meat (+5.7%) and for dairy products and eggs (+3.4%). They also paid more for fresh vegetables and fresh fruit. Shelter costs rose 1.8% in the 12 months to August, following a 1.3% increase in the previous month. In addition to paying more for fuel oil, consumers also paid more for homeowners' home and mortgage insurance, homeowners' replacement cost, and electricity. However, mortgage interest cost decreased. Prices increase at a faster rate in five of the eight major components Provinces: Prices increase at a faster rate in eight provinces On a year-over-year basis, gasoline and food purchased from stores continued to be the major contributing factors to the increase in consumer prices in all provinces. For the second consecutive month, New Brunswick posted the largest increase in consumer prices and British Columbia the smallest. Prices increase at a faster rate in eight provinces In Ontario, consumer prices rose 3.1% in the 12 months to August, after rising 3.0% in July. Gasoline prices rose 25.4%. Prices for passenger vehicle insurance premiums and homeowners' replacement cost also went up. Prices for electricity fell. Consumer prices in Quebec went up 3.4% in August, following a 3.3% gain in July. On a year-over-year basis, gasoline prices rose 27.1% in the province. Consumers also paid more for fuel oil and for food purchased from restaurants. Prices increased 2.1% in British Columbia, following a 1.7% increase in July. Drivers in this province paid 12.3% more for gasoline. Homeowners' home and mortgage insurance and food purchased from restaurants also went up. In Alberta, consumer prices advanced 2.9%, after rising 1.9% in July. In addition to paying 19.5% more for gasoline, consumers in Alberta paid 33.8% more for electricity. They also paid more for homeowners' home and mortgage insurance and for natural gas. Bank of Canada's core index The Bank of Canada's core index rose 1.9% in the 12 months to August, following a 1.6% gain in July. The higher increase in August was primarily a result of a rise in prices for passenger vehicle insurance premiums, food purchased from restaurants as well as bakery and cereal products. The seasonally adjusted monthly core index advanced 0.3% in August, matching the increase in July. Note to readers The special aggregate "Energy" includes electricity; natural gas; fuel oil and other fuels; gasoline; and fuel, parts and supplies for recreational vehicles. The Bank of Canada's core index excludes eight of the Consumer Price Index's most volatile components (fruit, fruit preparations and nuts; vegetables and vegetable preparations; mortgage interest cost; natural gas; fuel oil and other fuels; gasoline; inter-city transportation; and tobacco products and smokers' supplies) as well as the effects of changes in indirect taxes on the remaining components. To contact the reporter on this story: Ilan Kolet in Ottawa at ikolet@bloomberg.net To contact the editor responsible for this story: Marco Babic at mbabic@bloomberg.net

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