CPI-Adjustment Factors Based on Inflation Forecasts -2007
The 2007 CPI-adjustment factors included in Table 1 were published in the April 2006 NEWSletter. These factors are based on forecasts of annual CPI-inflation rates for 2006 and 2007. The Base-CPI is the average of the monthly CPI figures, as published by Statistics Canada, for the benchmark year.
Table 1
2007 CPI-Adjustment Factors for All Patented Drug Products (CPI 1992=100)
| Benchmark Year |
| |
(1) 2004 |
(2) 2005 |
(3) 2006 |
| Base-CPI |
124.56 |
127.34 |
n/a |
| 2007 Forecast |
132.75 |
132.75 |
132.75 |
| 2007 CPI-Adjustment Factor |
1.066 |
1.042 |
1.019 |
The 2007 Forecast CPI was 132.75 (1992=100) and was based on the actual CPI figures for 2005 (127.34), as published by Statistics Canada, and the latest available inflation projections (2.3% for 2006 and 1.9% for 2007) from the federal Department of Finance.
Cap for 2007 =2.9% (1.5 x 1.9)
CPI-Adjustment Factors Based on Actuals
As of January 2008, Statistics Canada reports annual average CPI values of 129.90 and 132.67 for 2006 and 2007, respectively. Table 2 gives revised CPI-adjustment factors incorporating these actuals.
Table 2
2007 CPI-Adjustment Factors for All Patented Drug Products (CPI 1992=100)
| Benchmark Year |
| |
(1) 2004 |
(2) 2005 |
(3) 2006 |
| Base-CPI |
124.56 |
127.34 |
129.90 |
| 2007 Actual CPI |
132.67 |
132.67 |
132.67 |
| 2007 CPI-Adjustment Factor |
1.065 |
1.042 |
1.021 |
The actual 2007-over-2006 CPI-inflation rate was 2.1%. This implies a 2007-over-2006 price increase cap of 3.2% (= 1.5 x 2.1%).