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Strong energy prices fuelled the biggest increase in household spending in eight years during 2005 as Canadians allocated more of their household budget to gasoline and utilities. Meanwhile 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 last year, up 5.1% from the previous year.

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 was introduced.

Households in three provinces – Ontario, Alberta and British Columbia – reported spending well above the national average. However, spending was highest in the Northwest Territories, where average spending amounted to $89,730 per household, up 16% from 2003.

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 up 5.5% from 2004.

Growing incomes pushed personal taxes up by 6% to an average of $13,700, but this remained at 20% of the average household budget, about the same as in 2004. Shelter claimed 19%, while transportation represented 14% and food 11% of the average budget.

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

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

Food, shelter, 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 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 29% went to personal income taxes.

These proportions were similar to 2004.

Food - More restaurant spending, but smaller proportion

Canadian households spent an average of $7,140 on food in 2005, up 3.3% from the previous year. This was largely the result of a 10% increase in restaurant spending.

However, food, including restaurants, still represented only 10.7% of total household spending, down from 10.9% in 2004, and the lowest ever as a proportion of total spending.

In the 1960s when this survey began, food was the largest single expenditure for households, representing nearly 19% of total spending. The proportion of the average budget devoted to food has declined constantly since then. It now ranks as only the fourth largest item, after taxes, shelter and transportation.

Nunavut reported the highest average spending on food, $12,820 or 20% of the average total household budget in this territory.

Energy, 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 tax to an average of $1,530.

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.

Almost half of all homeowners (47%) in 2005 reported having no mortgage. The median age of homeowners without a mortgage was 60. The median age of homeowners with a mortgage was 44.

Property taxes for all homeowners averaged $2,240.

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

Transportation - Higher fuel spending, Alberta leads country with more vehicle purchases

In 2005 households spent an average of $9,070 on transportation, up 5% from 2004. Of this, $8,240 was for private motor vehicles.

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 due to a 3% decrease in spending on public and private auto insurance.

After two years of decreases, 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.

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

Communications - Wireless grows, landlines slow

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 land-line 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 81% of households having a cell.

New information from the 2005 SHS shows that four in ten households (38%) had one cell phone, two in ten (19%) had two cell phones, and seven percent of households had three or more.

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

One in ten of the lowest income households had only a cell phone, with no land line.

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

Internet spending grows again

Spending on Internet access jumped by 15% to an average of $240, as 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.

British Columbia was the most connected province, 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 continued to fall, decreasing by 21% in 2005, according to the Consumer Price Index.

More than seven out of ten 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, four out of ten 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 only 7% in 2005, while spending on conventional cameras, film and processing declined by 11%.

Higher spending on education, 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 a 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, a 10% drop 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 it was first surveyed in 1969. Using 2001 prices, households spent $364 per year in 2005, compared to the equivalent of $1,400 per year in 1969.

Recreation

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 technology since television in the 1950s.

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 6% less spending on government lotteries, but 32% more spending on private lotteries and bingos.

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

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

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 remained flat, declining 1% to $110. Four out of ten households had a CD burner, and a quarter had DVD writers.

While satellite television receivers were reported by 23% of households, up only 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 2001 and 2005, respondents were asked extra questions about personal care products, for purposes of weighting the Consumer Price Index. Because of the nature of this category, extra detail in the questions can prompt respondents to recall more expenditures. This is likely the reason that in both 2001 and 2005 the personal care category is noticeably higher than in other years. Users should be cautious in interpreting increases in this category. Beginning in 2005, these questions will be asked every year.

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.gc.ca).