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moneysense.ca, 5/03/08
Survey of Household Spending
Statistics Canada released the 2006 Survey of Household Spending last week. The survey found that Canadian households spent an average of $67,736, up 1.3% from the previous year’s average spending of $66,860. Household spending slowed down somewhat in 2006 after growing at a brisk pace in past years (4.5% in 2002, 1.8% in 2003, 4.0% in 2004 and 5.1% in 2005).
The major categories of expenses were:
Personal taxes – 20%
Shelter – 19%
Transportation – 14%
Food – 10.4%
Recreation – 5.8%
Insurance and RRSPs – 5.6%
Household operation – 4.7%
Clothing – 4.2%
The portion spent by the average family on different categories is almost the same as last year but the report notes that personal taxes as a proportion of total expenses was the lowest since 1992. The report notes that spending increased in the following categories: Shelter (up 5%), Transportation (up 4%), Clothing (up 13%), Furnishings (up 9%) and Healthcare (up 6%). The survey also breaks out the proportion of spending on Food, Shelter, Clothing, Transportation and Taxes for the five income quintiles.
moneysense.ca, 5/03/08
The large jump in clothing expenditures is surprising to me, considering clothes seems less expensive as the years go by due to mfc. costs. So we are getting taxed less and spending the difference on clothes…
The clothing numbers also surprised. A total of 4.2% on clothing seems a little excessive. How many people are being clothed in this average family?
It was interesting to see the quintiles and this great little tidbit:
The one-fifth of Canadian households with the lowest income spent about $23,780 in 2006. Of this, almost 50% went to food, shelter and clothing. Personal income taxes claimed 3% of their budget.
In contrast, the top fifth of households spent an average of $137,820 in 2006. They allocated about 28% of their budget to food, shelter and clothing, while 29% went to personal income taxes.
Wow, if i was rich I would be very upset every time I see the social assistance family driving a nice truck and buying lots of smokes and lottery tickets . . . oh wait, I already am upset and I’m not rich.
$67,700 seems like a lot of household expenses. Especially since that’s after tax. The average household salary must be well in excess of 80K then, which seems a bit high? Or are the big spenders skewing the data?
Of course, if one assumes that most spend more than they earn, that would explain the discrepancy.
“every time I see the social assistance family driving a nice truck and buying lots of smokes and lottery tickets…”
A 5 member family living on social assistance brings in $2162 a month (in BC) and you’re jealous?
nobleea: The $67,700 is average, so it includes a lot of high spenders. Yes, it also includes households that spend more than they make.
Traciatim: It’s also interesting that all income quintiles spend the approx. the same percentage of their spending on Clothing and Transportation. That would mean that these expense categories are a bit flexible – we could save money by say driving the current vehicle for one or two more years and spending a bit smartly on clothing.
Interesting, my income tax number is bigger, as is my food, maybe that is where all my money goes?
The income tax number (it’s even bigger when you throw in property taxes) is one that is hard to fix (legally at least).
–C8j
JBubba: Actually… no. Not jealous, angry that they are spending my money sucking the system dry of funds. With unemployment at record lows you’d think more people would be out searching making the participation rate skyrocket . . . but it’s not the last time I looked, Jan/07 to Jan/08 the rate was only up 0.2%.
CC: I didn’t even notice that, I guess I must be pretty blind. This means that for each quintile they are spending around 1000, 1700, 2350, 3400, and 5750 for each. To put it another way, the top 20% spend more on clothes than the bottom 40% spend on food, interesting.
Quick question:
How does 67,736 equate to a 1.3% jump from last year’s amount of $63,640. Am I missing something???
Ryan: I made an error in the post. It is corrected now and thanks for pointing it out.
“With unemployment at record lows you’d think more people would be out searching making the participation rate skyrocket . . . ”
There are many reasons some individuals are not in the work force, including many with health issues. My father, a small businessman of 50 years, often commented that when the unemployment rate hits 7% or less, many of those in the unemployed category are not individuals you would want working for you.
If you truly feel these individuals should be working, possibly you should consider supervising or hiring them.
If your and your co-workers health status is such that you can continue to be truly gainfully employed, count your blessings, MANY are not in that category, and some must rely on the social safety net that we as a compassionate society have the ability to provide.
DAvid
As with most other “average” statistics, it’s an interesting read, but at the same time it’s almost completely useless. When you add up all of the percentages, it totals up to just below 85% – does that mean that the average family is saving the remaining 15%? And I’m assuming that a “household” spending of $67,736 implies that in most cases, this is a double income family? So, each income earner is making about roughly half that amount? If so, that would explain why the tax expenditures (at 20%) is so low.
I don’t have exact numbers, but my taxes are WAY higher. Also, I’m not sure how they categorize stuff like condo fees – is that part of “shelter” or “household operation”?
The other percentages seem quite reasonable. Including the clothing at 4%, which equates to roughly $2800 a year. After all, some of us DO buy suits and I also prefer to buy designer threads for casuals, too (they fit and look better). I think I personally spent over $6K during one single clothing shopping spree last year.
Actually I’ll have to retract my previous statement. It was based on the participation rate indicator found:
http://www40.statcan.ca/l01/cst01/indi02a.htm
This shows the participation rate at around 67.7%, or one third of all people of working age not even trying. Tonight however I found the following page:
http://www40.statcan.ca/l01/cst01/labor05.htm
I found out that the participation rate among the 25-44 range (or ‘prime working years’) was up at 92.1% for males and 82.6% for women. That puts it much more in line with things like health issues, temporary unemployment, and other more not-leech-like reasons. The younger crowd a bunch will be in school or ‘finding themselves’. For the older crowd, health problems and ‘re-finding yourself’ are probably up there in the reasons. This paints a much better picture than the one in every three people I was ranting about earlier.
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