4.3 Household spending on energy services


Energy-related household expenditures (Table 4.4) can be broken down into the following two categories: direct energy expenditures, which include fuel and electricity purchased for transport or accommodation energy needs; and transport-related indirect energy expenditures, which represent all expenses associated with obtaining the transport services for which some of the direct expenditures are incurred. The latter includes average spending for purchasing private vehicles, their operating costs, and other means of motorized transport, such as public transit or air travel. The average Canadian household spent $4,580 on direct energy expenditures, and $11,022 on indirect transport-related expenditures, with important differences across quintiles. In direct expenditures, the share of each fuel remains relatively similar across quintiles, although both electricity and vehicle fuel are more significant in the first quintile.

A few observations can be elicited from this profile. The first is that the share of direct energy expenditures is less significant for richer quintiles than for the first two. This indicates that energy-related expenses are less compressible than other expenditures and therefore represent a heavier burden for lower income households, a trend that has been consistent over the years.

Secondly, vehicle fuel expenses and transport-related indirect expenses are approximately three and five times higher in absolute value for the richest quintile with respect to the first. A variation of this magnitude cannot be explained solely by varying transport needs. It instead suggests that these needs are met by different means across quintiles; for instance through larger vehicles, more vehicles per household, more spending on air travel and less use of other collective transport. 

Overall, both direct energy expenditures and indirect transport-related energy expenditures expand according to preferences and financial means, resulting in a significantly higher carbon footprint per household for top quintiles than the lower ones. However, these preferences remain unalterable below a certain income level: in other words, there is a limit to the compressibility of these expenses, which primarily affects lower-income households and their basic heating and transport needs.

Table 4.4 – Energy-related household expenditures by quintile of revenue (2019) #

Source: Statistics Canada 2021

From 2010 to 2019, electricity expenses increased by 16%. Over the same period, expenses for the purchase of cars decreased by 28%, although this was more than compensated by a 69% increase in the truck category. This change in consumer preferences has to be taken into consideration in light of the increased demand for transport described in section 3.1. These preferences have led to both higher expenditures per household for individual vehicle purchases and lower fuel efficiency for the vehicle fleet. This has been accompanied by a steady increase in maintenance expenditures over the same period.

As for most other aspects covered in this chapter, provincial breakdowns show major distinctions across household consumption. The share of natural gas expenditures for principal residences is higher in Alberta (22%), Ontario (18%), Saskatchewan (15%), British Columbia (13%), and Manitoba (10%), compared to a maximum of 2% in the other five provinces. 

In fact, natural gas in the residential sector remains marginal in Quebec, Newfoundland and Labrador, New Brunswick, Nova Scotia, and Prince Edward Island. While Quebec’s commercial sector consumption of natural gas is substantial and almost as large as its electricity consumption, this is not the case for the Atlantic provinces, where there are very limited natural gas distribution networks.

While Quebec’s residential heating needs are met by electricity, Newfoundland and Labrador, Nova Scotia, Prince Edward Island and, to a lesser extent, New Brunswick differ from the rest of Canada in their reliance on other fuels (notably heating oil and wood) to heat their homes. The role of these fuels remains marginal for all the other provinces (Statistics Canada 2021).