# Canadian inflation rate in 1971: 4.93%

\$

## Inflation in 1971 and its effect on dollar value

Purchasing power decreased by 4.93% in 1971 compared to 1970. On average, you would have to spend 4.93% more money in 1971 than in 1970 for the same item.

In other words, \$1 in 1970 is equivalent in purchasing power to about \$1.05 in 1971.

The 1970 inflation rate was 1.00%. The inflation rate in 1971 was 4.93%. The 1971 inflation rate is higher compared to the average inflation rate of 3.86% per year between 1971 and 2020.

Inflation rate is calculated by change in the consumer price index (CPI). The CPI in 1971 was 21.30. It was 20.30 in the previous year, 1970. The difference in CPI between the years is used by Statistics Canada to officially determine inflation.

 Average inflation rate 4.93% Converted amount (\$1 base) \$1.05 Price difference (\$1 base) \$0.05 CPI in 1970 20.300 CPI in 1971 21.300 Inflation in 1970 1.00% Inflation in 1971 4.93%

## How to Calculate Inflation Rate for \$1, 1970 to 1971

Our calculations use the following inflation rate formula to calculate the change in value between 1970 and 1971:

CPI in 1971 CPI in 1970
×
=

Then plug in historical CPI values. The Canadian CPI was 20.3 in the year 1970 and 21.3 in 1971:

21.320.3
×
\$1
=
\$1.05

\$1 in 1970 has the same "purchasing power" or "buying power" as \$1.05 in 1971.

To get the total inflation rate for the 1 years between 1970 and 1971, we use the following formula:

CPI in 1971 - CPI in 1970CPI in 1970
×
100
=
Cumulative inflation rate (1 years)

Plugging in the values to this equation, we get:

21.3 - 20.320.3
×
100
=
5%

Politics and news often influence economic performance. Here's what was happening at the time:

• January 1st, 1970 established as Epoch time for UNIX systems.
• Rhodesia declares independence and sets up a republican government.
• Aswan Dam opens in Egypt to prevent flooding of the Nile River.
• A Palestinian terrorist organization hijacks three aircrafts in an incident that is later known as Black September.

## Data Source & Citation

Raw data for these calculations comes from the government of Canada's annual Consumer Price Index (CPI), established in 1914 and computed by Statistics Canada (StatCan).

You may use the following MLA citation for this page: “Inflation Rate in 1971 | Canada Inflation Calculator.” Official Inflation Data, Alioth Finance, 3 Jun. 2020, https://www.officialdata.org/CAD-inflation-rate-in-1971.