Canada's Housing Bubble

Dec 18, 2010 CBC News

Has been rising since Statistics Canada began tracking in 1997

Household spending in Canada dropped slightly in 2009, the first decline since Statistics Canada began tracking it in 1997.

Christmas shoppers walk to stores at the Laurier shopping centre in Quebec City on Thursday. Average household spending in Canada declined 0.3 per cent to $71,120 in 2009. (Jacques Boissinot/Canadian Press)The average Canadian household spent $71,120, down 0.3 per cent from 2008, the agency reports in its annual Survey of Household Spending.

Taxes took the biggest bite out of family income, accounting for 20.2 per cent of household spending, followed by the cost of paying the mortgage or rent along with utilities at 19.8 per cent, and transportation at 13.7 per cent. Food accounted for just 10.2 per cent of household spending.

The greatest decline in spending, a drop of 2.2 per cent, was recorded in Alberta, the province that also recorded the highest annual household spending at $84,976.

Manitoba recorded the largest increase in household spending, a 4.9 per cent hike, to an average of $66,610.

Discretionary spending drops

Snowmobile dealers had little to cheer about in 2009, as spending on the machines dropped 11 per cent. It's part of the 5.5 per cent drop in recreational spending, which averaged $3,840 per household.

Spending on household furnishings fell 3.6 per cent to an average of $1,900 per home. The biggest decreases were in spending on rugs, window coverings, art, antiques and tools for the workshop.

Amid all the spending drops, Canadians still liked to treat themselves to a movie, spending about $100 last year on going to the theatre, and increase of 8.7 per cent.

Technology drives spending patterns

The survey offers an intriguing snapshot into the impact of technological change on family households.

Smartphones and computers are displacing landlines, newspapers, audio players and digital cameras. (iStock)The penetration of landline telephones declined to 89 per cent of households, the lowest level since 1965. Spending on landlines was $550, a decline of 5.5 per cent. At the same time, spending on cellular service surpassed landlines for the first time, with Canadians spending $620 on cells, an increase of 13 per cent.

The era of smartphones is also ushering out the days of the MP3 player and portable digital camera. Since most phones now include those as features, spending on audio players is down 38 per cent, and digital cameras are down 9.2 per cent.

Households are also spending 8.3 per cent less on newspapers and books, and 10 per cent more on internet access. In 2009, 72 per cent of Canadian homes had broadband internet access, up five per cent from 2008.

Taxes take biggest bite from richest families

Households with incomes over $147,000 paid the greatest share of taxes, 29.7 per cent of income. But they paid the lowest percentage of income on food and shelter for a combined total of 23.3 per cent.

The lowest income families, those earning under $23,860, paid only 2.8 per cent of household income toward taxes. But combined food and shelter took up 47.7 per cent of household income.