Chapter 9 – Consumer Spending: Summary
9.1 Overview of Household Spending
Canadian households' average expenditures are concentrated in four main spending categories: personal taxes, shelter, transportation and food. Recently, the highest rates of growth in household spending have occurred in sectors such as health care and education and on some durable goods (transportation, and household furnishings and equipment). Research opportunities include further analysis of spending patterns in the form of detailed sectoral reviews, with an eye to both historical perspective and current consumer issues. Solutions to the technical barriers encountered in using the Survey of Household Spending data, both in terms of adjusting for price changes and comparing to the Family Expenditures Survey, should also be sought.
9.2 Spending by Income Quintile
Expenditures have risen for all household income quintiles since 1997. Those in the lowest income quintile, however, spent only about one sixth of the $120 227 average expenditure for those in the highest quintile in 2002. Fifty-one percent of the lowest quintile's household budget was allocated to food, shelter and clothing, compared to 28 percent for those in the highest quintile. Research opportunities include further analysis of low-income consumers' spending patterns, to contribute to the continuing research on poverty issues. More research on "consumption poverty," for example, would involve discussions about which expenditures should be part of a basic household consumption measure.
9.3 Spending by Household Type
Spending on the basics places significant pressure on the budget of lone-parent and senior one-person households, two groups that are over-represented in the lowest income quintile. In contrast, non-elderly husband-wife households (with and without children) are able to spend on a wide range of products and services. For these households, protecting their consumer interest in multiple sectors while dealing with time pressures may be an issue. Research opportunities include analyzing further breakdowns of the spending data. Retiring baby boomers, for example, will likely pursue more active and diverse consumer activities, while the growing numbers of "older" seniors may have difficulty affording the basics. Similarly, research into the spending patterns and pressures on the relatively more disadvantaged groups (e.g. lone parents, immigrants, low-educated heads of households) would be useful.
9.4 Consumer Spending on Transportation
Most households' transportation costs are significant and mainly attributed to private transportation modes. These expenditures have shifted from purchasing to leasing, while purchases have increasingly included trucks (a category that includes mini-vans and sport-utility vehicles). Households in the lowest quintile are, however, more likely to solely or primarily rely on access to city/commuter public transportation. Research opportunities with respect to Canadian consumers' private transportation will need to integrate climate change issues. Further work also continues to be required to address fraud problems with car repair shops and used-car dealerships. Additional analysis of transportation trends, and mobility and access issues, by socio-economic group would likewise be useful.
9.5 Consumer Spending on Food
More than three quarters of food expenditures go towards purchases from stores, where consumers have benefited from a sustained, long-term decline in most commodity prices. Changing household time constraints over the last two decades have brought significant changes in food consumption patterns. For example, the average meal preparation time has fallen, reliance on processed and store-prepared food has increased, and purchases of fast foods have grown. The food industry has also changed in light of consolidation and technological developments. Research opportunities include work with respect to nutrition issues and the growing prominence of fast foods. There are also important safety concerns about today's farming and processing trends and questions about technologies such as genetic modification and food irradiation. On many of these issues, work will need to encompass a broader number of perspectives (such as social well-being) than typical of many other consumer protection topics. Another important challenge will be the development of strategies for the dissemination of consumer information on food consumption issues.
9.6 Consumer Spending on Health Care
The average out-of-pocket health care expenditure per household has grown at a relatively fast pace over the past two decades. In particular, households in the lowest income quintile and senior households are much more likely to report out-of-pocket spending on prescribed medicinal and pharmaceutical products. Spending on non-prescribed medicines has also grown, in part due to increasing use of over-the-counter products and a greater selection of vitamin/herbal remedies. Research opportunities include the need to carefully consider the impacts of the growing out-of-pocket expenditures on health care items being experienced by consumers, including their ability to afford and judge the quality and utility of the health care products and services they buy. Special attention may need to be paid to the consumer impacts of the growing use of technology in this sector, with a possible focus on the marketing practices of the resulting new services.