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How much do we pay for the essentials?

How much do we pay for the essentials?

Posted on: 12/18/2017 | Author: ATB Financial's Economics + Research Team

Families in Alberta know that the necessities of life can consume a lot of the monthly budget, and there’s a belief in this province that the cost of living is much higher than elsewhere in the country. But is this true?

Last year, Albertans spent 63.1 per cent of total household spending on food, transportation and shelter--what economists call “non-discretionary spending.” That was the highest among all provinces. The Canadian average was 62.3 per cent.

Interestingly, while Alberta was the highest on all three combined, we were not the highest in any single category. Albertans committed 29.2 per cent of total spending to shelter (which includes home ownership expenses, mortgages, rent, etc.). That was lower than British Columbia (30.0 per cent) and Ontario, which led the country at 30.9 per cent.

In transportation, Alberta ranked fourth among the provinces at 20.7 per cent of total household spending. Saskatchewan paid the greatest proportion at 22.2 per cent.

Albertans often remark on the high cost of food in the province. But while our food prices may be high, households here pay the least in the country as a proportion of total spending, tied with Ontario at 13.2 per cent. Quebecers pay the most at 16.2 per cent.

Taken all together, Albertans do pay the highest proportion on the necessities of life. Yet the gap between Alberta and Manitoba—the province with the lowest percentage—is less than two percentage points. Given that Albertans’ average earnings were 26 per cent higher than our friends in Manitoba last year, we’re not doing too badly.

Average household spending on goods and services, graph

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