Episode 348 - Andrew Barclay (StatCan): Measuring Inflation

25:13And it makes sense. That's COVID for us in a nutshell. So you mentioned the term scanner data a few times. Now, would you mind just explaining what that means? So 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. So 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 kind of the absolute gold standard for price collection in the world, in fact.

25:53Why does Canada only report on one CPI measure? I think in the States, they have a couple of different measures for different population groups, but we only have one. 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 In DEX, 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.

26:28It's probably our communication strategy that's part of the problem as 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. So 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 the 80s.

27:08And 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-added CPI. So 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. So I think part of it is just that there isn't that much of a difference.

27:45And if you keep going down that path, you can arrive at this concept of personal inflation, right? If you keep kind of grouping people, you can get to this point where everybody's personalized inflation rate is different. Like 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. So do you think it makes sense for people to calculate their own personal inflation rates? That's a really great point, Mark. First of all, we have a personal inflation calculator on our website.

28:13I 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. And it's important to note the all-items CPI, consumer price index, is an average Canadian. So 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.

28:56So 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 SatsCan has produced in the past track pretty closely, where you might see some differences are probably in the individual indexes. So 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 sort of conclusion. But 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.

29:34So 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. So those specific circumstances that you described, Mark, are definitely true. And 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. I'm going to keep that in my back pocket.

30:07My boss will be listening to this episode. 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. Ben, it has to do with the relative weight. Shelter's about 30 % of the basket. Food's 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.

30:50I think that's essentially why. I want to ask you about something that you guys have done papers on that are some of my favorite 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? 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.

31:31And 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. So 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.

32:10Same 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. How does StatCan calculate the cost of owned housing for the CPI? The technical way we describe it is it's a variant of the user cost approach. So we just measure the ongoing costs of homeownership. I mentioned homeowners replacement costs, property taxes. We also measure mortgage interest costs of the mortgage interest component of your house, insurance, maintenance and repairs, other owned accommodations.

32:53So 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, homeowners replacement costs. The portion of it comes from the new housing price index. Property taxes are labor intensive, but they come from every municipal office in the country. Homeowner's insurance, it uses a broad range of consumer profiles extracted from some alternative data sources. And then maintenance and repairs, we get the data from retailers. And then we also use the construction union wage rate index as well.

33:31And 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. Do the municipalities send you the property tax data automatically? It's an incredibly labor intensive exercise. The folks who work on it do an amazing job. So 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. And 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.

34:13They've raised their sewer rate by this amount. And that's why it's an incredible bit of work. They should be praised for it. I respect what they do. 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. And 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 and the amount of data collection that you're doing.

34:53The other challenge is that we also have to conflict the data to make sure that it's accurate. So 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 has listened to that, great show, great episode. Awesome. Thanks. I'm hoping to do a paper based on that. I just needed to finish. I wanted to get to like end of 2024 data.

35:25So it's a full 20 years. And then we had a few more property tax rates to clean up, hopefully later this year. For sure. How does Statistics Canada's approach for housing? So the modified user cost of housing that you just mentioned, how does that compare to what other statistical agencies are doing around the world? 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.

36:02And it basically relies on the estimates of the price of current consumption accommodation services, while rental equivalence prices do not directly reflect the housing price. pricing is in 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. And we found it was a lot more hectic. It was a lot more up and down. Rental equivalents, I have an old colleague who used to It's like a freight train.

36:41And once it gets going, it's tough to stop. And that's part of the reason why rental equivalents 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 equivalents 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. And what do you think are the benefits and the drawbacks of using StatCan's approach? We never like to talk about the drawbacks, but there are drawbacks. So first of all, it does fit the user purpose.

37:16So 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. So 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. so 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 tends to be renovations and tends to be fixing a kitchen fixing a bathroom that sort of thing and replacement costs is probably more like the bones of the building so how often are we redoing the foundation or redoing the skeleton of the house.

38:08It just doesn't happen. So that's why we think replacement cost 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. So 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. So for that reason, it's a bit of a drawback. Doesn't that make sense though? Is the cost of capital is changing? The cost of housing is changing? Absolutely. We get lots of questions where it's a bit circular. The Bank of Canada is raising interest rates to fight inflation, but MISI is going up.

38:44I think the Bank of Canada talked about it in a few of their NPRs, monetary policy reports, where they talked about how their expectations on shelter, they misbehaved a little bit this time around. Usually when MISI 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. 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.

39:21It 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? Rent's an interesting index. So rent is collected using a questionnaire in the labor force survey. So it's a supplementary question. Obviously, the labor force survey measures unemployment, but there's a whole bunch of other questions that are in that survey. So the survey follows a household for six months, and then one sixth of the sample is replaced every month. So the dwellings are followed, not the households. So the tenants might change during the survey period.

39:56Approximately 8 ,000 units can be used in the CPI rent index calculations each month. And as of January 2019, we started using a hedonics model, as we mentioned before. So this is putting a price on characteristics, as we said. So we looked at different variables, such as the age of the dwelling, the number of bedrooms, the type of dwelling, locational 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 sort of thing. And then lastly, the rent index encompasses the whole market.

40:33So 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-controlled building, people who are not in a rent-controlled building. so all of that is covered in the index so oftentimes we maybe get some questions about rentals.ca's number and we don't necessarily go up or fall as quickly and part of the reason is that they're doing listed places and we're doing the entire census of the rental market yeah that makes sense market price rents versus average rents that people are actually paying exactly How well does CPI capture perceived inflation from surveys?

41:15We're kind of 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 also goes back to that messaging and that communication where are we doing enough to share with Canadians what's happening and why maybe their perception of inflation might be different. Is there a difference between the perception and the actual measured CPI?

41:56There'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. And 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. So I'm sure you guys follow the University of Michigan Consumer Expectations survey that came out a couple weeks ago.

42:36It was talking about inflation in the U.S. at three and a half percent. 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. And 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. And 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.

43:17We will ask about your ideas behind what you think drives the gap. But I also want to ask before that, is the perception versus actual inflation gap the same across different population groups? Is there variation there? 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 university education and without. We looked at kind of 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.

43:59That 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 grew 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.

44:48And that only makes sense to me, at least. So what are the main drivers of the inflation perception gap? 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. So 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 behavioral economics literature, there's always talk about heuristics and about price anchoring and loss aversion and things like that.

45:29When 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%. And consumers haven't had a chance to anchor their price expectations at this new level. So we've seen this dramatic level shift that consumers haven't yet come to grips with, I suppose. And their perception then is just that prices are a lot higher and they couldn't have declined 0.6%. It's got to be something much bigger.

46:18They'll quote a 20 % number. And you know what? they're bang on. Four years ago, prices were 20.6 % higher compared with four years ago. So 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. So I mentioned that$430 TV that I bought when I was 16. How often are you buying a TV? A lot of items in the CPI, you're not buying that often. So maybe you don't notice the price change as much or as frequently.

46:58And 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. So 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 new furniture. So they wouldn't necessarily see. They've just bought a$500 ,000 house to spend$5 ,000 on new furniture versus$5 ,500 in furniture.

47:44within that context of those big purchases, a 10 % increase, which is a difference between 5 ,000 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. We talked about quality adjustments earlier. What role do you think that plays, if any, in the inflation perception gap? 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 cell phone as a quality improvement.

48:24I see my new cell phone as just a new cell phone. But we have to treat it as a different kind of cell phone because that's what it is. Where they're most punished is on those frequent purchases. So you might buy a cell phone every two years, three years, something like that. So 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's 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.

49:04We talked a lot about housing and it's a hot topic, obviously, and always is. And I live just north of Vancouver. So I know what housing inflation looks like just as a bystander. But how important do you think housing is in explaining the perception gap? 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. And 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%.

49:46So 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. And that's perhaps why the personal inflation calculator is so important and 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 behaviors 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.

50:29I always bring up clothing and footwear. So clothing and footwear prices have declined almost 5 % compared with five years ago. And we don't talk about it at all. 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. Size 17 or 18, Mark, not size 24. Close enough. Everything over like 15 is just a big, ridiculous number. They're hard to find. It's true. I believe it. 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.

51:06People 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. 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. And now we're at a slightly higher rate, but historically it's not that high. But 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.

51:45You're going to blame higher prices, rightfully so. 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? Our official release of 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. So framing it within the context of we know that prices are higher.

52:23The traditional measures that we use to communicate price change, which 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 kind of gone through. So it's one of the ways we've tried to communicate. We try 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.

52:56I 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. So 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 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.

53:35So 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? Yeah. 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 a independent board, which oversees our work. They're independent expert advisory committee. They're made up of statisticians from around the world.

54:11They're made up of professors around the country, they know what they're talking about. And if we have a problem or if we have a challenge, we go to them and ask for their advice. So 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 kind of 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.

54:49It 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 kind of 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 kind of 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 So he's someone we always go to whenever there's kind of a problem with, hey, are we missing this?

55:43Or is this something that we can handle better? What indexes you receive the most criticism for? So first of all, I think essential purchases are often in people's eyes. And maybe for this reason, we 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.

56:18We 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. and it gives us quantity. It gives us price. It's so helpful for constructing the weights. And 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 kind of 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.

57:00That'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 like 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.

57:43At the same time, it's probably less of a thing now. But even like five or six years ago, you remember when you bought a plan, the cell phone came with the plan. And that was really unique to the North American market or to the Canadian market in particular. So we were pricing those things it was a challenge to kind of 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 and there's separate charges for the phone and we've moved away from having to pay for long distance having to pay for text messages that sort of thing so that's been unique and then based on the data that we get or the quality of data that we've got, it's started to improve a lot lately, is that we're pricing what's available online.

58:29And 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. And then there was 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. But for all intents and purposes, one gigabyte to two gigabytes is the same as 42 gigabytes to 43 gigabytes.

59:11In both cases, it's one additional gigabyte. And I think there was legitimate concerns about the utility of all of that. Are you using all of that? The way we kind of got around that was to say, well, it is the consumer choosing that plan as opposed to it being forced on you. So 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. But 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? And now instead of using nine gigabytes, maybe you use 20 gigabytes.

59:48There's still a lot of excess data and the utility of the data is still in question. But you found a way to use that extra data. And we figured that the consumer would also do that and the market would also do that as well. So we're steps away from a very data intensive app that everyone wants that will now require that excess data that you weren't using. So we should assume that the public knows what they're doing when they make their purchase and trust them. So that's kind of how we've dealt with that challenging index in a way. That's wild. I've never considered any of that. It's really interesting to hear how you guys think about it.

1:00:26You kind of went into this a little bit, but how do you guys respond to or incorporate feedback from that criticism? 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 kind of professional way.

1:01:05Our 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. So there's a lot of forums for talking about that feedback and talking about that criticism. So again, we welcome it. And again, we're here for you as much as we can be. 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 skeptical of Canada's inflation measures. They think that real inflation is like 20 % a year or something.

1:01:41Completely ridiculous thinking, in my opinion. What's the main message that you have for listeners who are skeptical in a conspiracy theory type of way of the way that CPI is calculated? I appreciate the opportunity to kind of 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.

1:02:15I work with around 140 dedicated public servants who are kind of vested in telling the truth. We're all kind of data wonks. And 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. So 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.

1:02:55I 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. And 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 or that the numbers that they're getting are worth their time.

1:03:36We 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 skeptical and i appreciate the skepticism 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 and 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.

1:04:19Love 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 it 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. So thanks again. But the last question we like to ask this question to every guest, Andrew, how do you define success in your life? 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.

1:04:49Saving the biggest question for last is always interesting. I know you guys asked 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 sort of goal or some sort of need to achieve something. And I sometimes have difficulty with that because maybe sometimes you miss the journey. I was thinking about this on the walk over 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 miss the banter along the way or you miss the huffing and puffing all your way to the top.

1:05:26Mandela, 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. And maybe that's just copping 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 sort of constant existential crises, which might describe me in some ways. But 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.

1:06:04And again, maybe that's copying out. I have some sort of 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. That was an incredible answer. 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. It goes into a lot of what you said there. So 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.

1:06:32Great book. the courage to be disliked. 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. Thanks. I appreciate that. 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. My pleasure. Keep up the good work. Again, thank you so much for the opportunity. It really was a pleasure.

1:07:03Mm...