Generation Squeeze has long been advocating for an update to The Bank of Canada’s primary measure of inflation, the Consumer Price Index (CPI), to ensure housing price inflation adequately informs monetary and interest rate decisions. 

Today's CPI doesn’t adequately account for swings in home prices because the measure was designed by Statistics Canada to track the cost of owning a home , not purchasing one. During a housing affordability crisis, all available policy tools should be aimed a lowering costs for Canadians.

Kareem Kudus, is a Director and Research Analyst here at Generation Squeeze. Together with our founder, Dr. Paul Kershaw they participated in recent stakeholder consultations at The Bank of Canada on the 2026 monetary policy framework renewal. Here are Kareem's thoughts:

CPI, Canada’s official inflation measure, doesn’t directly capture the rising cost of buying a home. In the past, this has helped keep inflation (as measured by CPI) and, therefore interest rates, low, even as home prices surged, making housing increasingly unaffordable.

I came across this issue back during the pandemic and found that, aside from a couple of academic papers, it had received remarkably little attention in Canadian policy discussions. Since then, I’ve been working to change that. It’s incredibly encouraging to now see the solutions I’ve been advocating for acknowledged in official Bank of Canada reports.

Through my work with Generation Squeeze, I’ve urged the Bank to consider an alternative version of CPI alongside the traditional measure. This alternative, known as the “acquisition approach,” better captures changes in the cost of buying a home.

Last year, we presented this proposal to Bank officials as part of the 2026 monetary policy framework renewal.

The Bank has now published a report listing Generation Squeeze as a participant in the renewal and reflecting our concern that current measures of housing inflation fail to capture the pressures facing younger Canadians. It notes our view on the acquisition approach: “One think tank advocated for the acquisition approach to measuring the cost of owned accommodations. It measures the cost of acquiring a home rather than the ongoing costs of homeownership. They argued that this method better reflects how Canadians experience housing inflation and tracks underlying housing cost pressures.”

The Bank has not adopted the proposal. Still, it is exciting to see a problem I stumbled across in my basement during the pandemic, and a solution we have spent years advocating for, become part of the official debate around Canadian monetary policy.

There is still important work ahead before the framework is renewed later this year. Building public awareness can help sustain the momentum.

And keep an eye out for a new report I’m writing on this topic, which will be published in the coming weeks.