What does the average Canadian spend cash on?
The average Canadian's spending habits depends on two key variables: disposable income and discretionary income. These variables are often wrongly used interchangeably when analyzing consumer habits.
Disposable income is the money the average working Canadian has?after paying taxes. Discretionary income is the money the average working Canadian has?after buying necessities.
As a developed country, Canada has one of the highest per capita disposable and discretionary incomes. The?Better Life Index?estimates that in Canada, the disposable income per capita is $34,421.
Read on to find out what the average Canadian spends their money on and how their spending habits have changed since the onset of the Covid-19 pandemic.
How the average Canadian spends their money in 2022
Canadians spend their disposable or discretionary income on some or all of the items listed below. The graph shows how the average Canadian has spent their money on those items in 2022. It’s important to note that the?household disposable income?of Canadians has steadily risen since 2017.
The average Canadian’s spending in the first quarter of 2022 started on a high, and the average Canadian spending on the listed items will likely continue to increase throughout the year.
Annual spend per person
| Category | 2019 | 2020 | 2021 | 2022 |
|---|---|---|---|---|
| Eating Out | $3,239 | $3,575 | $3,657 | $937 |
| Hairdressing/Personal Care | $791 | $746 | $805 | $215 |
| Streaming/TV Subscriptions | $293 | $293 | $303 | $78 |
| Transport | $5,440 | $4,244 | $4,866 | $1,380 |
| Mobile Phone Services | $897 | $890 | $850 | $212 |
| Pets & Pet Food | $266 | $296 | $325 | $86 |
| Home Improvements | $333 | $307 | $354 | $93 |
| Alcohol | $997 | $907 | $969 | $256 |
| Tobacco | $504 | $527 | $550 | $142 |
| Games of Chance | $454 | $276 | $332 | $106 |
| Audio-visual and Photographic Equipment | $194 | $204 | $204 | $50 |
| Computers and related | $133 | $159 | $172 | $41 |
| Games/Toys/Hobbies | $181 | $226 | $262 | $66 |
| Total | $13,722 | $12,650 | $13,649 | $3,662 |
Average monthly breakdown by year
| Category | 2019 | 2020 | 2021 | 2022 |
|---|---|---|---|---|
| Eating Out | $270 | $298 | $305 | $78 |
| Hairdressing/Personal Care | $66 | $62 | $67 | $18 |
| Streaming/TV Subscriptions | $24 | $24 | $25 | $6 |
| Transport | $453 | $354 | $405 | $115 |
| Mobile Phone Services | $75 | $74 | $71 | $18 |
| Pets & Pet Food | $22 | $25 | $27 | $7 |
| Home Improvements | $28 | $26 | $30 | $8 |
| Alcohol | $83 | $76 | $81 | $21 |
| Tobacco | $42 | $44 | $46 | $12 |
| Games of Chance | $38 | $23 | $28 | $9 |
| Audio-Visual and Photographic Equipment | $16 | $17 | $17 | $4 |
| Computers and related | $11 | $13 | $14 | $3 |
| Games/Toys/Hobbies | $15 | $19 | $22 | $5 |
| Total | $1,143 | $1,055 | $1,138 | $304 |
Canada’s population and average spending
The?World Bank estimates?the population of Canada to be 38.2 million. The country’s population will continue to grow steadily because of its impressive birth rate of one child every?1 minute and 29 seconds.
Ontario is the most populous province, and the fastest-growing demographic in the country is the youth. This is from two indicators: birth rate and high immigration rate.
A growing population indicates that expenditures on consumer goods will increase. However, the disposable income per capita may not grow at the same pace. This is because wages may not rise proportionately with the population.
The current average household income in Canada per year is $75,452. But the average income earned by individuals is $51,300, based on?data from 2020.
Analysis of what Canadians spend their money on
The breakdown of what Canadians spend their money on reveals that consumption has increased steadily since 2021. The table below compares expenditures on various items from 2021 and the first quarter of 2022.
Beverages
The total expenditure per person on beverages in 2020 was $3,575, which increased to $3,657 in 2021. The first quarter of 2022 shows that expenditures on beverages at $937 per person.
This reveals that Canadian expenditure has increased due to reduced Covid-19 restrictions. Expenditures on beverages may also have increased due to higher prices.
Hairdressing & personal grooming
In 2020, the per capita expenditure on hairdressing and personal grooming was $746. The expenditure on the same item increased in 2021 by $59 to $805. The expenditure on hairdressing and personal grooming during the first quarter of 2022 was $215.
TV subscriptions & streaming services
The money an average Canadian spent on TV subscriptions was $293 in 2020. This expenditure grew by $10 in 2021 and is currently at $78 in 2022. The popularity of streaming services such as?Netflix and Amazon?has not had the same impact in Canada as in the United States.
Transport
The majority of Canadians spend part of their income on transport. This explains why expenditures on transport in 2020 was $4,244 and grew to $4,866. Expenditure on transport may rise due to inflation and the increase in the?prices of gasoline.
Mobile phone services
The expenditure on mobile phone services was $890 in 2020, which fell to $850 in 2021. This may be because people spent more time outdoors and interacted in person.
Pets & pet food
The expenditure on pets and pet food was $296 in 2020. This figure increased by $31 to $325 in 2021. By the first quarter of 2022, the expenditure was $86. The increased expenditure in this area is likely due to the increase in pet populations, which, since 2016, has seen a?steady annual growth rate?of 0.4%.
Home modifications
The expenditure on home improvements or modifications was $307 in 2020. It increased slightly to $354 in 2021, though this isn’t significant because the?market value of houses?has not fully recovered from the effects of the Covid-19 pandemic.
Alcoholic beverages
The average Canadian spent $907 on alcohol in 2020 and $969 in 2021. The first quarter of 2022 showed that Canadians spent $256 on alcohol. The expenditure on alcoholic beverages will likely remain unchanged because the number of Canadians who increase their?consumption of alcohol?is balanced by those who reduce their consumption.
Tobacco
Expenditures on tobacco in 2020 were $527 and $550 in 2021. The average Canadian expenditure on tobacco in the first quarter of 2022 was $142. The?prevalence of smoking?tobacco among Canadian adults has remained unchanged.
Games of chance
Gambling is illegal in Canada unless?regulated or licensed by the government. The average Canadian spent $276 in 2020 and $332 in 2021. The expenditure on gambling may have increased as incomes increased post-pandemic.
Photographic equipment
The average Canadian spending on equipment was $204 in 2021. This amount is similar to what an average Canadian spent on equipment in 2020.
Computers
The average Canadian spent $159 on computers and related items in 2020 and $172 in 2021. There was no significant change in the expenditure, but the increase is attributable to inflation.
Games, toys & hobbies
The spending on games/toys/hobbies in 2020 was $226 and $262 in 2021. The increased expenditure may be due to the increased birth rate after the rollout of the Covid-19 vaccine.
How the spending habits of Canadians have changed
The financial data from the previous two years indicates that the average Canadian spending habits have returned to normalcy since the pandemic. The data from the first quarter of 2022 indicates the spending of the average Canadian will be higher for the rest of the year compared to the previous two years.
The spending habits of the average Canadian are likely to continue to increase due to salary increases. The cost of living is increasing, which forces Canadians to spend more on commodities due to higher prices.
Disposable income could increase, which may leave Canadians with more discretionary income. Canadians can improve their living standards by investing or saving their discretionary income.