How much does it cost to raise a child in Canada?

As parents, we all want the best for our children. We want to provide them with a loving home, healthy meals, quality education, and all the opportunities they need to thrive, but have you ever wondered how much it actually costs to raise a child in Canada? This article delves into the nitty-gritty details of child-rearing expenses and gives you a breakdown of the costs involved at different stages of a child’s life.

Understanding the Cost of Raising a Child

Raising a child is a joyful and rewarding experience, but it also comes with significant financial responsibilities. It is estimated that, in Canada, it costs $281,880 to raise a child from birth to the age of 18. That breaks down to $15,560 per year or $1,305 per month. Regardless of where you live, the size of your family, or your lifestyle choices, there are some basic expenses that every parent needs to consider.

The Basics of Child Rearing Expenses

When it comes to the basic expenses of raising a child, there are a few key necessities that every parent should be prepared for. At present, your housing payments may increase with a larger residence and grocery stores will be more expensive. Children never stop growing, so clothing will be an ongoing expense. In the long term, you must also consider education fees. Thankfully, Canada has instituted a Child Benefit program for parents of children under 18 years of age, providing an average of $6,275 per child per year to help offset some of the costs involved in raising that child.

Here are a few basics to consider when it comes to the cost of having and raising children.

Housing and Living Expenses

One of the most significant costs of raising a child is housing. As your family grows, you may need to consider moving to a larger home to accommodate everyone. This can result in increased rent or mortgage payments, as well as higher utility bills.

Food and Nutrition Costs

Feeding a child can be expensive, especially as they grow older and their appetites increase. From formula and baby food to groceries and dining out, the cost of providing nutritious meals for your child can add up quickly.

Education and Childcare Expenses

Education is a fundamental aspect of a child’s development, and it comes with its own set of costs. Whether you choose public, private, or homeschooling, there will be expenses associated with books, school supplies, uniforms, extracurricular activities, and tuition fees, not to mention afterschool and summer programs. Additionally, if both parents work, childcare costs can be a significant financial burden.

Life Insurance

As parents, safeguarding your child’s future is a top priority, and life insurance plays a significant role in that. Having a robust life insurance policy ensures that in the event of your untimely demise, your child’s financial needs will continue to be met, enabling them to maintain their lifestyle and meet future expenses such as education costs. The coverage you require depends on various factors, including income, debt, lifestyle, and your child’s future plans. Utilizing a life insurance coverage calculator can be extremely helpful in determining an appropriate coverage amount as it takes into account these factors, providing a reliable estimate that can guide you in securing the right policy.

Life Insurance for Kids

While life insurance for children is optional, it can serve as a financial tool for their future. Such policies not only provide death benefits, but they can also build cash value over time (in the case of whole-life policies), which the child can borrow against or withdraw from as they grow older.

Clothing and Personal Care Expenses

Children outgrow their clothes quickly, which means constantly shopping for new clothing items. Additionally, personal care products such as diapers, toiletries, and grooming supplies can contribute to the overall cost of raising a child.

Transportation and Travel Costs

Getting your child to school, extracurricular activities, and medical appointments often requires transportation. Whether you own a car or rely on public transportation or ride-share services, fuel, maintenance, and travel expenses are all factors to consider. Furthermore, when travelling, children up to a certain age must sit in car seats, and a good car seat can be expensive to purchase. 

RESP Contributions

Planning for your child’s future inevitably entails tackling the rising costs of education. The Registered Education Savings Plan (RESP) serves as a potent tool in this process. As you contribute to an RESP, you take advantage of the Canada Education Savings Grant (CESG). The CESG offers a 20% match on the first $2,500 contributed annually, up to a lifetime limit of $7,200 per child, essentially supplementing your child’s education fund. Consequently, aiming for a $2,500 contribution each year is an optimal strategy to maximize these grants. Embarking on an RESP early in your child’s life allows this investment to grow, significantly reducing the financial stress when your child commences their post-secondary education. You can easily open an RESP account with reliable brokers such as Qtrade, making the process even more manageable.

Factors Influencing the Cost of Raising a Child

While the necessities of raising a child are consistent no matter where you live, there are several factors that can influence the overall cost of raising a child. Do a bit of research when considering each of these factors and choose the best option that fits your budget. Having a child is expensive, but you don’t have to break the bank when providing for them. At the end of the day, it is important to balance your budget, no matter how many children you have. Here are some factors to consider when creating a budget for your expenses. 

Region

The cost of living varies significantly depending on the region in which you reside. Urban areas tend to have higher housing costs and overall living expenses, while rural areas may have lower costs but limited access to certain services. When deciding whether to live in the city or out in the country, consider doing a pro and con analysis so you choose an area of the province that suits your family’s needs, schedule, and budget, particularly when it comes to child care and transportation to work and school. 

It is important for you to carefully consider these factors and plan your finances accordingly to ensure you can provide your child with a comfortable and nurturing environment. 

Type of Housing

The type of housing you choose can greatly impact your budget. Renting an apartment or owning a small house may be more affordable than purchasing a larger home or living in a high-cost neighbourhood. Be sure to take mortgage rates, land taxes, and condo fees into account when deciding whether it is economical to rent or buy. 

Quality of Education and Childcare Services

The quality of education and childcare services you opt for can range from public schools and affordable daycare centres to private schools and exclusive childcare facilities. The level of quality and reputation of these services often come with a higher price tag. Consider taking advantage of the government’s recent $10.00-a-day childhood initiative. 

The Canadian government recently instituted a program providing $10.00-a-day early childhood education and childcare. Spaces and centres subsidized by the initiative are limited, but the number of daycares opting into the program is growing. Once you settle on an area, be sure to investigate if there is a place offering $10.00 a day childcare near your residence or place of work to help offset some of the cost involved with childcare. 

Family’s Lifestyle Choices

Your family’s lifestyle choices, such as recreational activities, vacations, and extracurricular programs, can significantly impact the overall cost of raising a child. Engaging in expensive hobbies or frequent travel can place additional strain on your finances. Taking up coupon-collecting and price-matching as a hobby can be a lucrative activity that will help save money for engaging in other things like travel. When it comes time for back-to-school shopping or purchasing clothes your children have outgrown, visit the sales section of clothing stores first. With a little vigilance, you will be able to find great deals on name-brand clothing. Don’t be afraid to purchase great-priced clothing a size or two bigger than your child, but be sure what you purchase will be season-appropriate when they are ready to wear them. 

Rather than expensive trips to distant theme parks, opt for “staycations” closer to home. Take advantage of affordable or free activities being offered in parks and community centres close to home. Overnight excursions can be fun for kids–consider travelling to other cities in your province or adjacent provinces and stay in affordable, family-friendly hotels or motels. With a little bit of research and creativity, you can still partake in traditionally expensive outings by choosing less-expensive options. 

The Cost of Raising a Child at Different Stages

The cost of raising a child can vary significantly depending on their age. Let’s take a closer look at the expenses you can expect at different stages of your child’s life.

Here is a table showing the approximate average cost of raising a child broken down into the stages of development described below. 

Stage of development	Average cost per year in CAD
Infant (0-1 years)	$27,739
Toddler (2-3 years)	$22,191
Primary school age (4-12 years)	$11,096
Teenager (13-18 years)	$14,424

It is important to note that these estimates do not include a post-secondary education. Full time undergraduate programs in Canada will cost almost $7,000 more per year. To help offset the cost of tuition, loans and grants are available from the provincial and Canadian governments under the Canada Student Financial Assistance Program.

The Cost of Raising an Infant

Raising an infant comes with a unique set of expenses. From diapers and formula to baby clothes and nursery furniture, the first year can be financially demanding. Additional costs may include baby gear like strollers and car seats.

However, the cost of raising an infant goes beyond just the basic necessities. You may also need to consider the cost of childproofing your home to ensure a safe environment for your little one. This can include installing baby gates, outlet covers, and cabinet locks. Additionally, you might want to invest in educational toys and books to stimulate your baby’s cognitive development.

The Cost of Raising a Toddler

As your child grows into a toddler, their needs and expenses change. You’ll need to budget for clothing, toys, books, and childcare services. Additional costs may include toddler-proofing your home and enrolling them in activities like swimming lessons or playgroups.

Furthermore, the cost of raising a toddler involves providing a stimulating and enriching environment. This can include setting up a play area with age-appropriate toys and activities, as well as investing in educational materials such as puzzles and art supplies. You may also want to consider the cost of preschool or early childhood education programs to support your toddler’s learning and social development. 

The Cost of Raising a School-Age Child

Once your child reaches school age, education becomes a significant expense. This includes school supplies, extracurricular activities, and field trips. Depending on your child’s needs, you might also have to hire a tutor to help with their academic success. Clothing expenses may also increase as your child grows and starts to develop their own sense of style.

Additionally, the cost of raising a school-age child extends beyond the classroom. You may need to budget for sports equipment and fees if your child wants to participate in organized sports. Music lessons, dance classes, or other hobbies and interests can also add to the overall expense. While it’s important to support your child’s passions and talents, keep in mind the financial implications. Enrolling in day camp or afterschool and evening programs at your local community centre or library is often a more cost-effective option and in some cases, might even be free. Rather than signing up for the most popular private camp or organization offering these programs, be sure to examine all of your options to find one that will cater to your child’s need for extracurricular activities but won’t take too much from your pocketbook.  

The Cost of Raising a Teenager

Teenagers have unique needs and interests, which can come with a higher price tag. Additional expenses may include cell phones, Internet access, school-related expenses, driving lessons, and recreational activities. It’s important to have open conversations with your teen about budgeting and financial responsibility.

Moreover, the cost of raising a teenager involves preparing them for adulthood. This can include saving for post-secondary education, helping them explore career options, and providing guidance on financial literacy. As your teenager becomes more independent, it becomes crucial to teach them about budgeting, saving, and making responsible financial decisions, so it might be a good idea to involve them in the research process when pricing-out options for major purchases like cell phones and driving lessons. 

The Bottom Line

While raising a child in Canada undoubtedly comes with financial challenges, it’s important to remember that the experience is priceless. As parents, we always try to find ways to provide for our children and create memories that will last a lifetime. By understanding the costs involved and planning ahead, you can navigate the financial responsibilities of raising a child with confidence and grace.