Survey of Household Spending

December 12, 2005 – Growing demand for communication services and electronics such as cell phones, high-speed Internet, and DVDs drove changes in the spending patterns of Canadian households in 2004. Households also spent more on mortgages, energy, and health care, but less on regular phone service and automobiles.

Households spent $63,640 on average in 2004, an increase of 3.4% from the previous year, and well above the inflation rate of 1.9% as measured by the Consumer Price Index.

Personal taxes accounted for an estimated 20% of the average household budget, about the same as in 2003. Shelter claimed 19%, while transportation represented 14% and food 11%, all about the same as the previous year.

Households in three provinces (Ontario, Alberta and British Columbia) reported spending above the national average. Those in Ontario reported the highest spending among the ten provinces, $71,580 per household. Newfoundland and Labrador continued to have the lowest provincial average ($49,870).

New communication services, digital electronics soar in popularity

The explosive growth in DVD players continued in 2004, with almost seven out of ten households (68%) reporting them. This was a sharp increase from 52% in 2003 and only 20% in 2001 when they were first included in the survey.

Households spent an average of $340 on cell phone and other wireless services, up 18% from 2003. Almost six in ten households (59%) reported having at least one cell phone, up from 54% in 2003.

About 30% of households with the lowest incomes had a cell phone in 2004 � triple the proportion of only 10% just five years earlier. Among households with the highest incomes, the vast majority or 85%, had at least one cell phone, up from 60% five years earlier.

Spending on Internet access jumped by 24% to an average of $210, as the proportion of households reporting high speed access increased to 43%, from 35% in 2003. About six out of ten households reported having some kind of Internet access from home.

At the same time, spending for conventional land line telephone service fell 6% to $700. Conventional telephone service accounted for just over half of all household spending on communications, down from 80% in 1997.

Over 330,000 households reported they used cell phones only and had no conventional land-line phone.

In addition to cell phones and DVDs, Canadians continued to spend more on digital cameras. Total spending on all cameras was up 60% over 2003 to an average of $120 per household, over two-thirds of which was for digital cameras. Spending on film and processing was down 38% from the previous year to about $70 per household.

Nearly seven out of ten households reported owning a computer. Over 94% of the highest income households had a computer in 2004, compared to 39% of the lowest income group. A record 25% of households reported buying new computer hardware, a figure which has risen steadily every year since the survey began.

Average spending on computer hardware was up 11% in 2004 to $260. However, this was still below the peak of $290 reached in 2000. This was mainly due to the continuing decrease in computer prices, which fell 17% in 2004, according to the Consumer Price Index.

Households report higher fuel expenses, fewer vehicle purchases

Household spending on transportation in 2004 was an average of $8,630, up 3% from 2003.

Average spending on gasoline and other fuels rose by 11% to $1,890, mirroring the 10.5% increase in gasoline prices reported by the Consumer Price Index in 2004.

This increase, as well as a 6% increase in private and public insurance premiums to an average $1,230, was partly offset by a 5% decline in spending on the purchase of automobiles (including vans and SUVs).

This second consecutive annual decline was in line with retail sales figures from Statistics Canada’s Retail Commodity Survey. The Survey of Household Spending includes spending on both new and used vehicles.

Meanwhile, average spending on public transportation increased 13% to $810 per household. This includes air fares as well as city and interurban transit.

Mortgage payments boost shelter costs

Average spending on shelter increased 5% to $12,200 in 2004. This was mostly due to a 7% increase in spending on mortgage payments, a 5% increase in property taxes, and a 4% rise in fuel costs.

The increase in mortgage spending was the result of more households having mortgages and higher average payments per household. There was no significant increase in the cost of mortgages in 2004 according to the Consumer Price Index.

Average spending on natural gas and oil for all households was up 4% to $760, while spending on electricity remained largely unchanged at $1,060.

Only 10% of households reported oil as their principal heating fuel, the lowest level ever reported since surveying began in 1947. The decline in these households occurred mostly in Ontario and Quebec.

More than 27% of households reported having central air conditioning in 2004, up from 25% in 2003, and seven out of ten of these were in Ontario. Spending on window air conditioning units was down 26%.

Gain in spending on health care, education

Health care took $1,690 from the average household budget last year, a 6% gain from 2003. The increase was driven largely by a 17% jump in reported out of pocket spending for goods and services related to eye care, such as surgery and examinations, and a 10% increase in public health insurance premiums.

Households in Alberta reported the highest average spending on health care, at $2,150, followed by those in British Columbia at $2,080.

Average spending on education rose 6% in 2004 to about $1,080, largely the result of a 9% increase in spending on post-secondary tuition due to both higher participation rates nationally and higher fees in Nova Scotia, Ontario, Quebec, and British Columbia.

Recreation: New electronics affect spending

Rental of videos and DVDs dropped 11% to an average of $90 per household, while purchases of blank recordable media such as CDs, DVDs and tapes, were up 75% to $20 per household. Four out of ten households had a CD burner, and 16% reported DVD writers.

The top three annual household expenditures on recreational services were: rental of cable and satellite services ($460); package travel tours ($430); and use of sports and recreational facilities ($310).

About 66% of households reported subscribing to cable television, down slightly from 67% in 2002 and 68% in 2001. Satellite television receivers were reported by 22% of households, about the same as the previous year.

In 2004, households spent more on live performing arts, (up 5% to $90) and less on live sports events, where average spending fell 5% to $40. Both were well below the household average of $110 spent on going out to movies.

Three-quarters of all households reported some spending on games of chance in 2004, a similar proportion to previous years. Net spending on games of chance fell 2% to an average of $260 per household.

Food, shelter, clothing, account for over half of spending by lowest income households

For the purposes of this analysis, households were divided into five groups according to their income, with each group representing 20%, or one-fifth, of all households.

The one-fifth of Canadian households with the lowest income spent about $21,300 in 2004. Of this, almost 51% went to food, shelter and clothing. Personal income taxes claimed 3.5% of their budget.

In contrast, the group of households with the highest income spent an average of $129,400 in 2004. They allocated about 28% of their budgets to food, shelter and clothing, while another 28% went to personal income taxes.

These proportions for both groups were similar to 2003.

Available on CANSIM: tables 203-0001 to 203-0020.

Definitions, data sources and methods: survey number 3508.

Two tables presenting summary-level spending data for Canada and the provinces and selected metropolitan areas are now available for free on the Canadian Statistics section of our Web site, as well as a table on Dwelling characteristics and household equipment.

The publication User Guide for the Survey of Household Spending, 2004 (62F0026MIE2005007, free), which presents information about survey methodology, concepts, and data quality, is available free on our Web site. From the Our products and services page, under Browse our Internet publications, choose Free, then Personal finance and household finance.

Ten detailed tables are available at a cost of $134 each. Tables now include medians. Of these ten tables, five present detailed household spending data: Canada, Provinces, Territories and Selected Metropolitan Areas (62F0031XDB); Household Income Quintile, Canada and Provinces (62F0032XDB); Housing Tenure, Canada (62F0033XDB); Household Type, Canada (62F0034XDB); Size of Area of Residence, Canada (62F0035XDB).

The remaining five tables present data on dwelling characteristics and household equipment: Canada, Provinces, Territories and Selected Metropolitan Areas (62F0041XDB); Income Quintile, Canada (62F0042XDB); Housing Tenure, Canada (62F0043XDB); Household Type, Canada (62F0044XDB); Size of Area of Residence, Canada (62F0045XDB).

Custom tabulations are also available.

For more information about the Survey of Household Spending, or to enquire about the concepts, methods or data quality of this release, or to purchase products, contact Client Services, Income Statistics Division (1-888-297-7355; 613-951-7355; income@statcan.ca).

Average household expenditures
Canada N.L. P.E.I. N.S. N.B. Que. Ont. Man. Sask. Alta. B.C.
dollars
Total expenditure 63,640 49,870 50,850 54,560 51,530 54,490 71,580 56,320 53,310 71,260 64,270
Personal taxes 12,900 8,700 8,070 10,680 9,410 11,630 14,590 10,940 9,560 15,140 12,100
Shelter 12,200 8,260 9,220 9,600 8,800 9,420 14,680 9,580 9,490 13,250 12,990
Transportation 8,630 7,330 7,760 7,670 7,750 7,160 9,850 7,730 7,460 9,270 8,640
Food 6,910 6,180 6,070 6,190 6,060 6,870 7,110 6,410 5,670 7,130 7,120
Recreation 3,680 3,250 3,120 3,210 3,070 3,110 3,880 3,390 3,500 4,650 3,900
Personal insurance payments and pension contributions 3,650 2,970 3,140 3,180 3,330 3,370 3,950 3,690 3,420 3,930 3,440
Household operation 2,920 2,690 2,690 2,980 2,730 2,390 3,260 2,770 2,750 3,300 2,850
Clothing 2,510 2,300 2,020 2,040 1,980 2,190 2,830 2,260 2,130 2,840 2,370
Household furnishings and equipment 1,870 1,610 1,540 1,570 1,610 1,410 2,300 1,580 1,740 2,080 1,660
Health care 1,690 1,450 1,760 1,590 1,610 1,710 1,470 1,470 1,590 2,150 2,080
Gifts of money and contributions 1,650 1,190 1,180 1,350 1,170 910 2,000 2,010 1,730 2,010 1,980
Tobacco products and alcoholic beverages 1,500 1,380 1,320 1,480 1,270 1 470 1,540 1,520 1,280 1,660 1,430
Education 1,080 720 810 910 800 630 1,380 720 840 1,130 1,340
Miscellaneous expenditures 1,020 630 860 770 680 810 1,200 870 860 1,190 1,070
Personal care 900 740 750 760 760 900 960 770 780 940 820
Reading materials and other printed matter 280 180 260 280 250 250 310 270 250 320 280
Games of chance (net) 260 270 280 290 250 260 280 350 260 270 210

 

Budget share of major spending categories by income quintile
2004
Lowest quintile Second quintile Third quintile Fourth quintile Highest quintile
Average household expenditures ($) 21,280 36,930 54,040 76,560 129,370
Budget share for major spending categories: (%)
Food 16.7 14.5 12.3 10.8 8.3
Shelter 30.6 22.9 21.2 18.9 15.6
Clothing 3.5 4.0 3.9 4.0 4.0
Transportation 11.2 14.3 14.0 14.4 13.0
Personal taxes 3.5 10.4 15.6 19.6 28.2

 

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