Overview

Household actual final consumption (HAFC) is a product that expands on the currently published household final consumption expenditure, an important component of Canadian macroeconomic statistics, by including social transfers in kind (STiK) from general government and from non-profit institutions serving households. This concept recognizes that some household consumption is financed by governments and non-profit institutions. It is therefore an alternative to the standard expenditure concept that enables greater international comparability. In Canada, social policies and programs are in place to provide certain goods and services to individual such as education and healthcare. These amounts are not part of household final consumption expenditure as households do not incur these expenses. Instead, the government incurs a major proportion, in the example of healthcare and education, and redistributes these services to individuals free considering it is funded through the tax system. Therefore the objective of actual final consumption is to compare final consumption of households across space and time in the country and internationally, taking into account social policies of governments and activities of non-profit institutions serving household (NPISH). HAFC is meaningful for the analysis of the household sector.

The framework for HAFC is based on the 2008 System of National Accounts (2008 SNA) which gives a realistic and compact view of the economy that is suitable for policy and analytical use. The 2008 SNA makes a distinction between actual consumption, showing the amount of goods and services actually consumed, and consumption expenditure.

Household actual consumption is greater than consumption expenditure because it includes expenditures incurred by general governments and NPISHs on behalf of individual households.

In the 2008 SNA, household actual final consumption consists of the consumption of goods and services acquired by individual household. The value of household actual final consumption is given by the sum of three components:

1. The value of households’ expenditures on consumption of goods or services including expenditures on non-market good or services sold at prices that are not economically significant;
2. The value of the expenditures incurred by government units on individual consumption of goods or services provided to households as STiK; and
3. The value of the expenditures incurred by non-profit institutions serving households (NPISHs) on individual consumption of goods or services provided to households as STiK.

STiK complements not only consumption concepts, but income as well. STiK can be thought of as income, in the form of services. By considering STiK as an additional form of income, we can compile adjusted household disposable income (AHDI) which is an alternate display of household income.

The release of this product will result in: the compliance with the 2008 SNA framework, improvements in international comparisons of income and consumption data, and further expand our knowledge and understanding of Canadian household income and consumption.