Canadian households are preparing to cut back on expenses in the face of economic recession but two items which were a luxury only a decade ago -- the Internet and cellphones -- are among the last items Canadians are willing to forgo.

A new study conducted last week in Canada and the U.S. suggests that if consumers are forced to make household budget cuts, they will look everywhere else before cancelling their Internet connection or phone plan.

"Many consumers, with minor exceptions, view these as essential utilities, like water or electricity," says the soon-to-be released report.

Tim Richardson, a professor of e-commerce at Toronto's Seneca College, told CTV Newsnet that the study comes as no surprise.

"It seems to make sense, people aren't just using the Internet for email, they are using it for their regular everyday life," he said. "They are using it to find information, to pay bills . . . it's an integral part of society."

He added that cellphones are no longer just used for talking.

"They facilitate a degree of interaction that was never previously available, sending not just static pictures but moving pictures," Richardson said.

He also said that consumers are unlikely to rethink their priorities because wireless rates have come down significantly in the past decade.

According to the report, consumers are most likely to cut out heading to the arenas for big events, either for concerts or sporting events.

Movie tickets and DVD purchases were cited as the second and third most likely place to make spending cuts.

The survey was conducted last week and consisted of interviews with 800 people.

The items consumers will cut back on:

1. Big-ticket events (eg. concerts, sports)

2. Movie-going

3. DVD buying

4. Magazine subscription renewals/newsstand

5. Cable/satellite TV extras

6. Video game buying

7. Home phone

8. Mobile/wireless phone

9. DVD Rentals

10. Home Internet