- Household Actual Final Consumption (HAFC) increased by 10.2% ($175.4 billion) in 2022 due to the growth in household final consumption expenditure and an increase in social transfers in-kind.
- Social transfers in-kind (STiK) increased by 8.1%, mainly in health, education, social protection, and housing-related support. However, the growth in STiK did not keep pace with HFCE, causing its share of HAFC to decrease to 22.6%.
- Non-profit institutions serving households increased their share of overall STiK, indicating a more significant role for them in providing support, and housing-related STiK increased significantly due to tight housing market conditions. The percentage of STiK received by households with seniors decreased slightly, while the share received by households with children increased.
Editor’s Notes: In this report, we have used data from the Statistics Canada website.
Household Actual Final Consumption (HAFC) experienced a significant increase of 10.2% or $175.4 billion in 2022, marking the largest increase since 2008. This growth is attributed to the acceleration of household final consumption expenditure (HFCE) alongside inflationary pressures and increasing economic activity due to the easing of COVID-19 pandemic-related restrictions.
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Social transfers in-kind (STiK)
Social transfers in-kind (STiK), which measures the value of in-kind goods and services provided to households by governments and non-profit institutions, also experienced strong growth of 8.1%, mainly in health, education, social protection, and housing-related support.
Growth in HFCE outpaces STiK
In 2022, Household Actual Final Consumption reached $1.9 trillion, building on the increases observed in 2021 and exceeding pre-pandemic levels. HFCE recorded a 10.8% increase, while STiK reached $428.8 billion (+8.1%) in 2022. Despite the strong growth in the value of STiK, it did not keep pace with HFCE, causing its share of HAFC to decrease to 22.6% in 2022 (-0.4 percentage points).
Health-related STiK growth slows
Health-related STiK reached $227.5 billion in 2022, up $17.3 billion (+8.2%) from the previous year. Although the annual increase remained higher than pre-pandemic rates, it slowed relative to 2021 (+13.3%) as the need for health services eased along with COVID-19 pandemic conditions. Health-related STiK represented 53.0% of overall STiK in 2022, unchanged from a year earlier. The decrease in health-related STiK mainly occurred in the second quarter of 2022 (-11.2%) as COVID-19-related hospitalizations declined and governments reduced vaccination campaigns. However, health-related STiK picked up again in the third and fourth quarters.
| Total HAFC | $2,016.9 billion | 100.0% |
|---|---|---|
| Breakdown of STiK | ||
| Health | $63.4 billion | 21.5% |
| Education | $50.1 billion | 17.0% |
| Social Protection | $98.9 billion | 33.5% |
| Housing-related support | $82.9 billion | 28.1% |
Non-profit institutions serving households increase support
NPISH increased its share of overall STiK at the fastest pace on record, reaching $40.3 billion in 2022, up 11.5% from the previous year. While governments accounted for 90% of STiK contributions, NPISH increased its share of overall support, indicating a greater role for non-profit institutions.
| Non-profit Institutions Serving Households (NPISH) | $19.3 billion | 6.5% |
|---|---|---|
| STiK by Recipient | ||
| Households with Seniors | $60.5 billion | 20.5% |
| Households with Children | $112.9 billion | 38.2% |
| Other households | $121.9 billion | 41.3% |
Household Actual Final Consumption increases with housing market conditions
Other-related STiK, which includes housing, recreation, culture, social protection, and other services, increased by $7.0 billion (+9.8%) from 2021. Housing-related STiK reached $9.1 billion in 2022, up 24.8% from the previous year, the highest increase recorded since 2008. Housing-related STiK has become increasingly important over the years, especially given ongoing housing shortages, higher rents, and affordability issues. The benefits provided through housing-related STiK support low-cost or social housing and the transition of people experiencing homelessness into permanent housing. Social protection also contributed to the growth in STiK, including various in-kind support measures for vulnerable groups such as low-income earners, seniors, and the unemployed.
STiK as a share of adjusted disposable income reaches the highest rate on record
STiK is not only supplemental to household consumption expenditure but can also be considered income in-kind. Adjusted household disposable income (AHDI) takes into account the added STiK to household disposable income (HDI). AHDI reached $1.9 trillion in 2022, while HDI increased at an average annual rate of 5.2%, AHDI increased at an even faster pace of 5.8%, boosted by 8.1%.
Age Group Analysis: Share of STiK Received by Households with Seniors and Children
By age group, households with seniors aged 65 and over received the largest share of STiK in 2022, at 34.9% ($149.6 billion), reflecting the high level of spending on health and social protection benefits for seniors. However, the share of STiK received by households with seniors decreased slightly in 2022 (-0.6 percentage points), while the share received by households with children increased (+0.6 percentage points).
Conclusion
The 10.2% increase in household actual final consumption in 2022, the largest observed since 2008, can be attributed to the growth in household final consumption expenditure, along with an increase in social transfers in-kind. The latter, which includes the value of in-kind goods and services provided by governments and non-profit institutions serving households, increased by 8.1% in 2022, led by growth in health, education, social protection, and housing-related support.
While health-related social transfers in-kind slowed relative to the start of the pandemic, due to easing COVID-19 conditions, support from non-profit institutions serving households grew at the fastest pace on record. Household Actual Final Consumption also increased significantly in 2022, particularly given tight housing market conditions.
Overall, social transfers in-kind as a share of adjusted household disposable income reached the highest rate on record, at 22.0%, with middle-income households and seniors receiving the largest shares. However, the distributions of household economic accounts allocate STiK to various household groupings, and from 2021 to 2022, households in the lowest two income quintiles increased their share of STiK, while the share for those in the highest two income quintiles decreased.
