A strong Canadian economy is one reason why overall household spending was up in 2006, according to the latest research by Statistics Canada.

A survey of household spending showed on average, spending was up 4.6 per cent from 2005 -- an amount above the 2 per cent inflation rate. The average household spent $48,770 on goods and services.

The findings, released Tuesday morning, found that spending in Alberta far surpassed other provinces.

"Average household spending in Alberta for goods and services increased by 14 per cent over 2005 to $59,740, the largest year-over-year increase for one province ever recorded by this survey," the report said.

Prince Edward Island, Saskatchewan and Quebec also reported growth above the national average.

Manitoba reported the slowest growth in spending on goods and services at 1 per cent. Ontario didn't come too far behind, reporting a 2 per cent growth in spending.

Newfoundland and Labrador reported spending $39,520 on goods and services in 2006 - the lowest average household spending in the country.

"The most important thing that we found was the fact that the oil boom out West is affecting not only Alberta but B.C. and Saskatchewan as well," Brad Snider with StatsCan told Canada AM Tuesday.

"In Ontario, the slow down from the auto industry, some spillover from the U.S. economy and the impact of a high Canadian dollar seems to be having an effect there."

Spending on basics

A large portion of household budgets were spent on:

• Personal taxes (20 per cent)
• Shelter (19 per cent)
• Transportation (14 per cent)

The average amount spent on personal taxes in 2006 was $13,630. This was slightly up from the year before but 20 per cent is the lowest share ever spent on taxes since 1992.

"We're making more money and we're paying a little less tax," Snider explained in an interview from Ottawa. "Tax rates in provinces and on the federal level are having an effect."

According to the Consumer Price Index, the cost of shelter in Alberta rose in 2006 by 10 per cent. This had an impact on the national household average on shelter spending which was reported to rise five per cent to $12,990.

Spending on transportation varied from province to province but nationally, it rose by four per cent to about $9,240. The study also noted Canadians used public transportation more in 2006 although most of the increase was spent on air travel.

Albertans spent the most on transportation. Vehicle purchases were up 22 per cent from the previous year. On average, households in this province spent $12,160 on transportation-related costs -- up 19 per cent from 2005.

Households in Ontario spent 10 per cent less on cars. Buying patterns for Ontarians were similar to other years but the average amount spent per purchase decreased. Fuel expenditures also dropped slightly despite a five per cent increase in fuel costs.

Clothing, home furnishings and groceries also topped shopping lists for households.

"In the 1960s, food represented the largest proportion of household expenditure, accounting for nearly 19% of total spending," the report notes. "However, this proportion has declined constantly since then to just over 10% of total spending in 2006."

In households with the lowest income, food, clothing and shelter took up half of their average $23,780 budget while only three per cent was spent on their personal taxes.

The technology and entertainment industry also took a big bite out of household budgets across the country.

DVD players surpass VCRs

There is a clear winner in the battle between cell phones and land lines.

Spending on cell phones and other wireless services was up more than 18 per cent from 2005 while spending on conventional home-based telephone service continued its steady decline, dropping 3 per cent to about $650 per household.

But the real success story is about DVD player sales. For the first time, more people own a DVD player (83 per cent) rather than a VCR (82 per cent).

Live sports in Canada also saw a significant increase in spending, (47 per cent) as did live performances (19 per cent). Snider said most of the support came from out West.

"In the entertaiment categories, Alberta has the highest level and the highest growth levels in all these categories," he said.

Other key findings in entertainment spending are:

• Spending on movies fell eight per cent to $97 per household.
• A record 31 per cent of households reported buying new computer hardware
• National spending on reading materials, including newspapers, periodicals and magazines, decreased five per cent to $260 per household. Alberta was the exception, spending eight per cent more on reading materials.
• Nearly 97 per cent of the highest income households had a computer, and 93 per cent had internet access from home. In comparison, 45 per cent of households in the lowest income group had a computer, and one-third had home access to the internet.

Snider said policy makers should take the technology gap between high and low income households seriously.

"In spite of all the increases in spending there is still a digital divide in our country in a sense that access to this kind of technology is driven by income level," he said. "When education programs and other things are moved online, I think people need to be aware that access to that can be affected by the income of a family."

An increased spending on health care was also noted in the Statistics Canada survey. The average Canadian household spent $1,870 on health care, six per cent more than they spent in 2005. Most of this gain came from an 11 per cent increase in pharmaceutical purchases.

Alberta ($2,440) and British Columbia ($2,180) spent the most on health care.

The survey also found spending on tobacco and gambling had decreased since 2005.