Survey of Household Spending

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Strong energy prices fuelled the biggest gain in household spending in eight years during 2005 as Canadians allocated more of their household budget to gasoline and utilities.

At the same time, households in the booming Western provinces and territories had more to spend for automobiles, cell phones and electronics.

On average, each household spent $66,860, up 5.1% from 2004.

This was more than twice the inflation rate of 2.2% as measured by the Consumer Price Index, and the fastest rate of growth since 1997 when the annual Survey of Household Spending (SHS) was introduced.

Households in three provinces (Ontario, Alberta and British Columbia) reported spending well above the national average. However, average spending was highest in the Northwest Territories, where it amounted to $89,730 per household, up 16% from 2003, the most recent year the territories were in the survey.

Spending increased at the fastest annual rate in three Western provinces: Saskatchewan (+8.3%), Manitoba (+6.9%) and British Columbia (+6.2%).

Newfoundland and Labrador still had the lowest provincial average, $52,610; however, this was a 5.5% gain from 2004.

Rising incomes pushed personal taxes up by 6% to an average of $13,700, but this held steady at 20% of the average household budget. Shelter claimed 19%, while transportation represented 14%, and food 11% of the average budget.

Average spending on gasoline jumped 10% in 2005, while households spent 7% more on the purchase of automobiles (including vans and SUVs), halting two consecutive annual declines. Alberta households alone recorded a 20% increase in spending on vehicles.

A record 28% of households reported buying new computer hardware, while DVD players kept up their explosive growth in popularity. Nearly 80% of households reported having a DVD player in 2005.

Alberta leads country with big jump in vehicle purchases

Households spent an average of $9,070 on transportation in 2005, up 5% from 2004. The bulk of this, $8,240, was for private motor vehicles.

After two years of declines, Canadian households reported a 7% increase in spending on the purchase of automobiles (including vans and SUVs). Alberta households led the way with a 20% increase in spending on vehicle purchases.

The average household spent $2,080 on gasoline in 2005, up 10% from the previous year. Despite this, average automobile operating costs only rose by 4% to $4,520, the result of a 3% decline in spending on public and private auto insurance.

Meanwhile, average spending on public transportation increased by just 3% to $830 per household.

Energy and property taxes boost shelter costs

Average spending on shelter increased 3% to $12,610 in 2005. This was mostly due to a 5% rise in energy spending.

Spending on natural gas was up 8% to $630, while spending on electricity rose 3% to $1,100. There was also a 6% increase in property taxes, which rose to $1,530 on average.

The highest average spending on shelter was $17,690 per household in the Northwest Territories.

Canadian homeowners with mortgages spent an average of $19,320 on shelter in 2005, about 22% of their total expenditures. Mortgage payments averaged $10,730 per year.

Homeowners without a mortgage spent an average of $8,420 per year on shelter, or 12% of their total expenses.

Renters spent an average of $8,720 on shelter, or 22% of their total expenditures.

Surge in spending on cell phones and other wireless services

Household spending on cell phone and other wireless services was up more than 21% from 2004, to an average of $410. At the same time, spending for conventional landline telephone service fell 3% to $680.

Almost 75% of Alberta households reported having a cell phone, the highest rate in the country. Ottawa was the most wireless city, with 80% of households having a cell phone.

New information from the 2005 SHS shows that 4 in 10 households (38%) had one cell phone, 2 in 10 (19%) had two cell phones, and 7% had three or more.

Some 570,000 households, 4.5% of the total, reported they used cell phones only and had no conventional land-line phone. Of these, nearly 80% were renters, and 60% were one person households.

For the lowest income households, 1 in 10 had only a cell phone, with no land line.

Among households with the highest incomes, 9 out of 10 had at least one cell phone, and nearly a quarter had three or more. But only 1% had no land line.

Big jump in Internet spending

Spending on Internet access jumped by 15% to an average of $240. The proportion of households reporting high-speed access grew to 50% of all households, up from 43% in 2004. Only 14% of households used dial-up Internet access.

The most connected province was British Columbia, where 70% of households had Internet access at home.

A record 28% of households reported buying new computer hardware. Average spending on computer hardware was up 8% in 2005 to $290, which equalled the previous peak reached in 2000.

Computer equipment prices fell by 21% in 2005, according to the Consumer Price Index.

More than 7 out of 10 households reported owning a computer in 2005. Nearly 96% of the highest income households had a computer, and 93% had Internet access from home. In comparison, 4 out of 10 households in the lowest income group had a computer, and one-third had home access to the Internet.

After increasing by 60% in 2004, spending on digital cameras was up an additional 7% in 2005. Spending on conventional cameras, film and processing declined by 11%.

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

The one-fifth of Canadian households with the lowest income spent about $22,040 in 2005. Of this, almost 51% went to food, shelter and clothing. Personal income taxes claimed close to 4% of their budget.

In contrast, the top fifth of households spent an average of $135,380 in 2005. They allocated about 27% of their budgets to food, shelter and clothing, while almost 29% went to personal income taxes.

These proportions were similar to 2004.

Recreation: Four-fifths of households report DVD players

DVD players were reported by almost 80% of households in 2005, continuing their explosive growth in popularity. Since they were first reported by 20% of households in 2001, DVD players have become the most rapidly adopted new device since television in the 1950s.

Purchases of audio and video equipment, including both pre-recorded and blank media such as CDs, DVDs and tapes rose 6% to an average of $470 per household, while home entertainment services including rentals of pre-recorded media declined 1% to $110. Overall, 4 out of 10 households had a CD burner, and one-quarter had DVD writers.

Satellite television receivers were reported by 23% of households, up slightly from the previous year. Average spending for satellite subscriptions rose 17% to $138 per household. About 65% of households reported subscribing to cable television, down slightly from 66% in 2004 and 68% in 2001.

In 2005, the most common entertainment service was going out to movies, where Canadians spent an average of $106 per household. The number one movie-going population in 2005 was in the Northwest Territories, where households spent an average of $132.

Net spending on games of chance was up 5% to $280. Households reported spending 6% less on government lotteries, but 32% more on private lotteries and bingos.

Live performing arts accounted for almost $100 in household spending nationwide, while live sports events attracted about $40.

Residents of British Columbia spent the most on live sports, $70, while Albertans spent the most on live performing arts, $119 per household.

Higher spending on education and health care

Average spending on education rose 13% in 2005 to about $1,220, largely the result of an 11% increase in spending on post-secondary tuition. This was due mostly to higher participation rates nationally, and to higher fees in the Atlantic provinces and British Columbia.

Health care accounted for $1,800 from the average household budget last year, a 6% gain from 2004.

This was the result of a 37% increase in reported out-of-pocket spending for eye care services, a 12% increase in spending for dental services, and an 8% increase in spending for private health insurance premiums.

Households in British Columbia reported the highest average spending on health care, at $2,180, followed by those in Alberta at $2,130.

Less spending on tobacco

Canadian households spent $620 on tobacco products in 2005, down 10% from 2004, and 24% below the peak of $815 reported in 1992.

After adjusting for price changes relative to 2001, spending on tobacco in 2005 was at the lowest level ever reported since tobacco was first surveyed in 1969.

In 2001 prices, households spent $364 per year in 2005, compared to the equivalent of $1,400 in 1969.

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

Definitions, data sources and methods: survey number 3508.

The publication Spending Patterns in Canada, 2005 (62-202-XWE, free), which presents the latest results of the SHS for Canada, the provinces and selected metropolitan areas is now available from the Publications module of our website.

Two tables presenting spending data are available free on the Summary tables module of our website, under Canada and the provinces and Selected metropolitan areas. A third table, with data on Dwelling characteristics and household equipment, is also available.

The publication User Guide for the Survey of Household Spending, 2005 (62F0026MIE2006001, free), which presents information about survey methodology, concepts, and data quality, is also available online. From the Publications module, choose Free Internet publications, then Personal finance and household finance.

There are also 10 detailed tables available at a cost of $134 each. Of these 10 tables, 5 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 5 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 (toll-free 1-888-297-7355; 613-951-7355; income@statcan.gc.ca), Income Statistics Division.

Table(s).