Canadians spend more on housing, less on taxes
By Tavia Grant - Globe and Mail
Canadians are spending a greater chunk of their incomes on housing, air travel and cell phones while the proportion devoted to personal taxes has hit a 14-year low, a government report showed Tuesday.
Canadians were in an expansive mood in 2006, boosting spending by 4.6% from 2005 - more than twice the rate of inflation, Statistics Canada said in its survey of household spending.
The biggest share of Canadian household budgets was still on personal taxes, shelter and transportation, at 20%, 19% and 14%, respectively.
However, relatively less appears to be going to the tax man. Personal taxes edged higher - to an average of $13,630 - but that was the lowest share since 1992. A dwindling portion is also going towards food - where the proportion of spending hit the lowest on record.
“In the 1960s, food represented the largest proportion of household expenditure, accounting for nearly 19% of total spending,” the report said. This has steadily tumbled, to just over 10% of total spending in 2006.
Spending on shelter rose 5% to an average of $12,990 while transportation spending rose 4%.
Nowhere was the money flowing more than in oil-rich Alberta, which set a record for spending growth.
“Spending growth in Alberta surpassed all other provinces by a wide margin,” the report said.
Average household spending in Alberta soared 14% - the largest year-over-year increase for one province ever recorded by this survey. Prince Edward Island tallied the second-largest growth, followed by Saskatchewan and Quebec.
The slowest growth in spending on goods and services was in Manitoba, where it rose just 1%, and in Ontario where this figure grew by just under 2%, Statscan said.
Spending differs broadly between income levels. The poorest fifth of the population spend more than half of their budget on food, shelter and clothing. The wealthiest fifth spend mostly on taxes and shelter.
Among other findings from the survey:
- Canadians used public transportation more in 2006, with spending rising 17%. This was mostly towards air travel, followed by city commuter buses and subways.
- Spending on clothing swelled 13%.
- Household spending on cell phone and other wireless services jumped more than 18%. At the same time, spending for conventional land-line telephone service continued to fall, dropping 3%.
- More than two thirds of households say they own at least one cell phone - up from 64% in 2005. One in five households say they own two cell phones while 1 in 20 use cell phones only and no conventional land-line phone.
- Calgary was the most wireless city, with 87% of households having a cell phone. Quebec has the lowest rate of cell phone ownership.
- A record 31% of households bought new computer hardware.
- More than three-quarters of households reported owning a computer in 2006. Nearly 97% of the highest income households had a computer, and 93% had internet access from home. By contrast, 45% of households in the lowest income group had a computer, and one-third had home access to the internet.
- Average spending on internet access services rose 12%.
- Ownership of DVD players surpassed VCRs for the first time.
- Spending on digital cameras grew 6%, while spending on conventional cameras plummeted 29%.
- Spending on movies fell 8% while reading materials spending slid 5%.
- Spending on pharmaceutical products is rising, led by Alberta.
- Spending on “games of chance” dropped 5%, led by declines in non-government bingos and raffle tickets.
Statscan produced the study by interviewing about 21,000 Canadian households between January and April of last year.
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