BUSINESS
04/11/2012 04:59 EDT | Updated 04/11/2012 05:12 EDT

Canada Household Spending: Study Finds Canada Tops In Transportation, Clothing Costs

Alamy

Blame it on our cold climate and sprawling cities.

An international comparison of household expenditures in four developed countries shows we devote a greater proportion of our total spending to transportation and clothing in Canada than elsewhere.

Released by the U.S. Bureau of Labor Statistics, the study compares spending on basic household items in the U.S., Canada, Japan the U.K. in 2009.

The study found that in Canada, transportation costs accounted for nearly 19.9 per cent of our total household expenditures, compared to about 16.8 per cent in the U.S., 15.2 per cent in the U.K. and 9.8 per cent in Japan.

“Canadians pay higher gas prices than Americans, and the share of automobile expenditures was higher in Canada than in the United States,” the bureau observed.

Clothing costs also ate up a relatively bigger slice of the pie in Canada, with 5.8 per cent of the total expenditure going toward clothes. That compares with 5.5 per cent in the U.K., 4.8 per cent in Japan and 3.8 per cent in the U.S.

Though the study doesn’t offer much of an explanation for the difference, observers point to a few reasons, some more obvious than others.

As Armine Yalnizyan, senior economist for the Canadian Centre for Policy Alternatives, notes, “We live in a cold country, and we live in a big country that’s less densely populated and people travel a long distance to get to where they work.”

It’s a trend she says has become more pronounced in recent years, and has become particularly apparent in major urban centres.

“We’ve got the spatial polarization in cities that has been going on hand-in-glove with income polarization, which means people with crummy jobs have to live further and further away and travel longer and longer to get where there are working,” she said.

As a share of total spending, housing costs were the most significant expense in Canada, at 24 per cent. Housing was also the dominant expense in the U.S. (29.3 per cent) and the U.K. (24.1 per cent).

Meanwhile, food accounted for 14.8 per cent of total spending in Canada, compared with about 21.8 per cent in Japan, 19.9 per cent in the U.K. and 14 per cent in the U.S.

When it comes to out-of-pocket health care spending, however, the share was highest in the U.S., because, as the report posits, “in Canada, the United Kingdom, and Japan medical costs are paid indirectly through nationalized health care options.”

The health care share was 4.1 per cent in Canada, compared with 6.9 per cent south of the border.

Roger Sauvé, the president of People Patterns Consulting and an expert in Canadian household spending, cautions against putting too much stock in the international comparison.

As he points out, the study relies on very different data sets, such as the Survey of Household Spending in Canada and the Consumer Expenditure Survey in the U.S., which were compiled for a variety of purposes and using potentially different methodologies.

Still, Sauvé, who recently released a breakdown of Canadian household expenses through The Vanier Institute of the Family, says the findings are fairly representative.

“It gives you some idea of how the countries differ, but if someone was to develop domestic policy in any of those countries [based on] these comparisons, I don’t think that would be a good idea,” he said.

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