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Monday, December 13, 2004

Survey of Household Spending


Canadians spent a bundle last year on new electronic devices, such as cameras, DVD players and cell phones, according to estimates from the latest Survey of Household Spending. They also spent less on new cars and trucks, but more on insurance and Internet services.

The popularity of DVD players skyrocketed in 2003, with more than half of all Canadian households now reporting them, up sharply from 36% in 2002.

More than 54% of households reported having at least one cell phone, up slightly from 52% in 2002. Households spent an average of $290 on cellular services, up 12% from 2002, and more than 40% higher than in 2001. Cell phones now account for nearly $3 of every $10 spent on all telephone services.

Overall, households spent $61,150 on average in 2003, a 1.8% increase from the previous year. Personal taxes accounted for an estimated 20% of the average household budget, shelter 19%, transportation 14% and food 11%, all about the same as in 2002.

Households in Ontario and Alberta and all three northern territories reported spending above the national average. Those in the Northwest Territories reported the highest spending at $77,070 per household. Newfoundland and Labrador continued to have the lowest provincial average ($48,920).

Note to readers

This release is based on data from the 2003 Survey of Household Spending (SHS). Data were collected by personal interviews conducted from January to March 2004 from a sample of more than 24,000 private households in all provinces and territories. The survey gathered detailed information on spending patterns, dwelling characteristics, and household equipment in 2003.

Since 1999, the SHS has included households in the northern territories in every odd numbered year. For 2003, data were collected in all 10 provinces and the territories. The 2002 data for Canada include the 10 provinces only.

The average spending for a category is calculated for all households, including those with and those without expenditures for the category, unless otherwise noted. Average spending includes sales taxes.

Comparisons of expenditures between years in this release are not adjusted for inflation. The rate of inflation for selected items is mentioned where it affects the analysis of year-to-year changes in spending.

To analyze the data by income level, households were divided into five groups or quintiles based on their income. Each quintile represents one-fifth of all households. Quintiles are created by ranking households in ascending order of total household income and partitioning the households into five groups such that the estimated number of households in each group is the same. Note that households in the lowest quintile have fewer members on average (1.6) than households in the highest quintile (3.5).

Households in Nunavut reported the highest average spending on food ($12,380) almost double the national average.

Electronic cameras, high-speed Internet soar in popularity

In addition to spending more on cell phones and DVDs, consumers were keen on cameras, spending $340 per reporting household. Total spending on cameras was up 22% over 2002 to nearly $880 million. This was 60% higher than in 2001 and has nearly doubled since 2000.

Meanwhile, total spending on film and processing was down 12% to $900 million compared with 2002, or about $120 per reporting household. The survey did not ask directly about digital cameras as opposed to conventional cameras, but it does appear that the new technology had an impact. The 2004 survey will ask about spending on digital cameras.

Nearly 6 out of every 10 households reported having an Internet connection, up slightly from the 54% reported in 2002. A home Internet connection was reported by 59% of urban households and by 47% of rural households. Average spending on Internet services rose to $170, up 8% from 2002.

The proportion of households with high-speed Internet connections continued to grow. More than 60% of households with Internet access reported using a high-speed connection, either cable or high-speed telephone in 2003, up from 50% in the previous year.

About 11% of rural households had high-speed service, more than double the proportion in 2002. But there was still a major urban-rural difference in Internet access as 40% of urban households reported using a high-speed Internet connection.

Nearly 7 out of 10 households reported owning a computer. About 22% of households reported buying new computer hardware, a figure which has risen steadily every year since the survey began.

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However, average spending on computer hardware was down 5% in 2003 to $230, which was 20% below the peak of $290 reached in 2000. This decline was mainly due to a continuing drop in prices which fell 10% from 2002, according to the Consumer Price Index.

Households report fewer vehicle purchases, higher operating expenses

Household spending on transportation last year was an average of $8,350, down 1% from 2002.

This was the result of an 8% decline in spending on the purchase of cars and trucks, (including vans and SUVs), which was partly offset by a 3% increase in operating expenses. The decline was in line with retail sales figures from the Retail Commodity Survey. The Survey of Household Spending includes spending on both new and used vehicles.

Average spending on vehicle operating expenses rose 3% to $4,080. Respondents reported that spending on their private and public automotive insurance premiums rose 9% to a record high average of $1,170. Spending on registration fees rose by about 10%.

Despite rising energy prices, households reported little change in spending on gasoline in 2003. Retail trade data showed flat or decreasing sales of gasoline in the last eight months of 2003.

Average spending on public transportation, which includes airfares as well as city and interurban transit, increased 4% to $720 per household.

Shelter: Households spending more on owning, less on renting

Spending on shelter increased 3% on average to $11,580 in 2003. This was mostly due to a 5% increase in spending for owned living quarters.

Spending on services for purchasing homes, such as real estate commissions, legal fees, appraisals and surveying was up an average of 16%, while mortgage insurance expenditures rose 19%. Spending on homeowner insurance premiums was up 10% to about $360.

Although average annual rents remained about the same ($7,020), spending for rented living quarters was down by an average 3% in 2003 because fewer households reported rental payments. This reflects the increased vacancy rate, from 1.7% to 2.2% in 2003, reported by Canada Mortgage and Housing Corporation's annual Rental Market Survey.

Average spending on utilities (water, heating fuel and electricity) for all households increased by 7% from $1,860 to $1,990. Spending on heating fuel was up 13% to $730.

Households living in the Northwest Territories reported the highest average shelter costs of over $14,400, 24% above the national average, due to higher than average rent, heating and utility costs.

Recreation: Spending highest on cable, satellite services

The top three annual household expenditures on recreational services were: rental of cable and satellite services ($460); package travel tours ($350); and sports and recreational facility memberships and user fees ($310).

Households spent much more on live performing arts ($80) than on live sports events ($50). But both were smaller than the average of $110 that households spent on going out to movies. Rental of videos and DVDs averaged about $90 per household.

Satellite television use continued to grow. Average spending on satellite service rental jumped 24% to about $120 in 2003, while average cablevision service rental rose 5% to $340.

Satellite television receivers were reported by 23% of households, up from 21% a year earlier. About 65% of households reported subscribing to cable television, down slightly from 67% in 2002 and 68% in 2001.

Over half of rural households reported satellite subscriptions compared with only 17% of urban households. This was partly the result of different levels of infrastructure for the two technologies in urban and rural areas.

Three-quarters of all households reported some spending on games of chance in 2003, a similar proportion to previous years. But net spending on games of chance fell 13% to an average of $270 per household.

Education, health care and pensions

Average spending on education rose 9% in 2003 to about $1,010, largely the result of a 13% increase in spending on postsecondary tuition. This increase in education expenses varied among the provinces, with the bulk of the increase reported by households in Ontario and British Columbia.

Households reported spending an average of $1,590 on health care, unchanged from 2002. Households in Alberta reported the highest average spending on health care, at $2,040, followed by British Columbia at $1,920. Households in Nunavut reported the lowest average spending ($590), while Northwest Territories was second lowest at $1,060.

Household spending on personal insurance and pension contributions, excluding registered retirement savings plans, grew 3% to $3,510, mostly because of increases in contributions to Canada and Quebec pension plans.

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 $20,200 in 2003. Of this, almost 53% went to food, shelter and clothing. Personal income taxes claimed 3% of their budget.

In contrast, the group of households with the highest income spent an average of $123,400 in 2003. They allocated about 28% of their budgets to food, shelter and clothing, while 29% went to personal income taxes.

The proportions for both groups were similar to 2002.

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

Definitions, data sources and methods: survey number 3508.

Two tables presenting summary-level spending data are available free on the Canadian Statistics section of our Web site: Canada and the provinces and selected metropolitan areas. A third table, presenting data on dwelling characteristics and household equipment, is also available free.

The publication User Guide for the Survey of Household Spending (62F0026MIE2004003, 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 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 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;

Average household expenditure and budget share, 2001 to 2003 
  Average expenditure Share of budget Average expenditure Share of budget Average expenditure Share of budget
  2001 2002 2003
  $ % $ % $ %
Total expenditure 57,500 100.0 60,090 100.0 61,150 100.0
Personal taxes 12,220 21.3 12,020 20.0 12,370 20.2
Shelter 10,740 18.7 11,200 18.6 11,580 18.9
Transportation 7,600 13.2 8,430 14.0 8,350 13.7
Food 6,440 11.2 6,680 11.1 6,790 11.1
Recreation 3,450 6.0 3,540 5.9 3,590 5.9
Personal insurance payments and pension contributions 3,120 5.4 3,420 5.7 3,510 5.7
Household operation 2,620 4.6 2,780 4.6 2,870 4.7
Clothing 2,400 4.2 2,450 4.1 2,440 4.0
Household furnishings and equipment 1,660 2.9 1,790 3.0 1,750 2.9
Health care 1,420 2.5 1,590 2.6 1,590 2.6
Gifts of money and contributions 1,260 2.2 1,440 2.4 1,520 2.5
Tobacco products and alcoholic beverages 1,310 2.3 1,480 2.5 1,490 2.4
Education 900 1.6 930 1.5 1,010 1.6
Miscellaneous expenditures 860 1.5 900 1.5 900 1.5
Personal care 960 1.7 830 1.4 830 1.4
Reading materials 280 0.5 290 0.5 280 0.5
Games of chance (net) 270 0.5 310 0.5 270 0.4

Average household expenditure by province and territory, 2003 
  Total Food Shelter Clothing Transportation Personal taxes
Canada 61,150 6,790 11,580 2,440 8,350 12,370
Newfoundland and Labrador 48,920 6,150 7,590 2,440 7,140 8,720
Prince Edward Island 49,450 6,040 8,740 1,920 7,580 7,780
Nova Scotia 54,300 6,140 9,400 2,120 8,100 10,060
New Brunswick 49,110 5,960 8,320 1,960 7,540 8,480
Quebec 54,200 6,730 9,140 2,190 7,290 11,980
Ontario 68,120 7,110 13,910 2,720 9,050 14,040
Manitoba 55,110 6,310 9,000 2,180 7,970 10,940
Saskatchewan 53,440 5,690 9,170 2,030 8,080 10,310
Alberta 66,490 6,750 12,120 2,670 9,410 13,220
British Columbia 60,090 6,780 12,310 2,260 8,250 10,490
Yukon 64,680 7,980 11,740 2,440 8,510 11,710
Northwest Territories 77,070 8,890 14,400 3,200 9,930 14,670
Nunavut 68,840 12,380 9,510 3,370 5,490 13,790

Average expenditure on major spending categories by income quintile, 2003 
  Lowest quintile Second quintile Third quintile Fourth quintile Highest quintile
Total spending 20,200 35,800 52,600 73,800 123,400
Food 3,560 5,280 6,510 8,110 10,480
Shelter 6,330 8,360 10,750 13,620 18,870
Clothing 760 1,420 2,040 2,970 4,990
Transportation 2,300 5,000 7,960 10,930 15,580
Personal taxes 630 3,480 8,010 14,450 35,290

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Date Modified: 2004-12-13 Important Notices