Bargaining Research
 

HOW TO USE THE CPI: EXAMPLES

To calculate the impact of inflation on your wages, you will need the Ontario CPI index number for the month of your last wage increase and the most recent Ontario CPI number. Remember to use the CPI index charts and not the percentage change charts for these calculations. (These are available on this website by clicking here )

For these examples, let us assume that your hourly wage is $21.00 and your last wage increase took effect on April 1, 2006. You then use the most recent CPI index number for Ontario, which in this example is May 2007.

For the province of Ontario, the CPI (2002 = 100 base) in April 2006 was 109.1 and the CPI for May 2007 was 111.6.

1. To calculate how much price inflation has taken place between these two points in time, use this formula:

(New CPI minus Old CPI) divided by Old CPI times 100

In this example,

            (111.6-109.1) ÷ 109.1 × 100  =  2.3%

In greater detail this is calculated as follows,

Step 1: 111.6 minus 109.1 equals 2.5

Step 2:  2.5 divided by 109.1 equals 0.0229

Step 3:  0.0229 times 100 equals 2.29 or 2.3 per cent rounded up

Therefore inflation between April 2006 and May 2007 grew by 2.3%.

2. To calculate the value of your wage in current dollars, use this formula:

            Your wage times Old CPI divided by New CPI

In this example,

            ($21.00 × 109.1) ÷ 111.6 = $20.53

or, in greater detail this is,

            Step 1: $21.00 times 109.1 equals 2291.1

            Step 2: 2291.1 divided by 111.6 = $20.53

Therefore, your wage of $21.00, established in April 2006 is worth $20.53 today.

For more information on the Consumer Price Index, please download the Statistics Canada publication, Your Guide to the Consumer Price Index, or contact the OPSEU Research Staff at 1-800- 268-7376.  

Download guide to CPI. pdf