Analysis

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Canadian households spent an average of $69,950 in 2007, up 3.3% from 2006. This increase was faster than the annual rate of inflation of 2.2% for 2007, as measured by the Consumer Price Index.

Households in Alberta spent the most on average, $85,910, but this was only a 0.8% increase, the slowest rate among the provinces.

Household spending in Saskatchewan rose 7.7% to $63,940, the fastest rate of growth. Households in Prince Edward Island and Newfoundland and Labrador reported the lowest spending on average.

Spending on basics accounts for the largest shares

Personal taxes accounted for 21% of the average household’s budget in 2007, while shelter represented 20%, transportation 13% and food 10%. These shares changed only slightly from 2006.

Average personal taxes amounted to $14,450, up 6.0% from 2006, while spending on shelter rose to $13,640, a 5.1% increase. A 10.6% increase in mortgage payments drove the rise in shelter spending.

Households spent an average of $9,400 on transportation, up 1.7%. A 6.9% increase in spending on gasoline and other fuels was offset by a 6.3% decline in average spending for automobile purchases.

On average, households spent $7,310 last year on food, up 3.7%, the fastest annual increase in this category since 2002. Food prices rose by 2.7% for the year as measured by the Consumer Price Index.

Spending on cell phones, electronics still on rise

Average household spending on cell phones and other hand held text messaging devices amounted to $520, up 9.3% from 2006. At the same time, average spending on land-line telephone services fell by 6.7% to $610.

About 71% of households reported having cell phones. The average spending for those households who reported cell phones was $770 per household. About 38% reported having one cell-phone, 23% had two, while about 11% had three or more.

Average spending on computer hardware rose 2.8% to $290 per household. The share of households with a home computer increased from 75% in 2006 to 78%.

About 61% of households reported they had a high-speed Internet connection, up from 56% in 2006. Just 9% reported using a dial-up connection. Households with Internet spent $430 on average for access to the Internet, a 4.8% increase.

The share of households reporting having a digital video disc (DVD) writer rose from 32% to 39%, while the share with a compact disc (CD) writer rose to 52% from 48%.

Spending down on household furnishings

Average spending on household furnishings and equipment declined 7.8% from 2006, one of the few categories to register a drop.

Average spending on clothing increased 2.7% to just over $2,900 per household. Spending on recreation held steady at just under $4,000.

Average spending on retirement and pension fund payments rose 6.8% to $2,710, as a result of higher contributions to Canada and Quebec Pension Plans and other government pension funds.

Spending on tobacco products rose by 2.1% to $620 on average, while spending on alcoholic beverages rose by 5.7% to $920.

Food, shelter and clothing still account for more than half of spending for the lowest income group

The one-fifth of Canadian households with the lowest income spent an average of $22,340. Spending on food, shelter and clothing accounted for 52% of their total spending while personal taxes accounted for 3% of their budget.

On the other hand, the top fifth of households spent an average of $143,360 and food, shelter and clothing accounted for 28% of their total spending. Personal taxes accounted for 29% of their total spending.