If you’re thinking about raising a child, one of the first things you’ll need to consider is how much it will cost.
Despite the fact that it is practically impossible to take every single expense into account, this guide will show you everything you need to know about the cost of raising a child in Canada.
Keep reading to learn more!
How Much Does It Cost to Raise a Child in Canada?
Ready to expand your family but don’t know how much a child will set you back? We did the research and found out that the average cost of raising a child in Canada rounds up to about $10,000 to $15,000 annually. However, many factors will affect this amount along the way.
Although factors like location, lifestyle, and the number of children have a vital role, the cost mainly depends on food, clothing, daycare, transportation, school-associated expenses, university savings, and extracurricular activities.
Let’s take a better look.
Cost of Food
Expectedly, food is among the higher expenses you will come across. Based on the latest data, an average family of 4 will pay up to $14,767.36 for food annually. One way to reduce the cost of food is to cook at home rather than eat out.
Additionally, to reduce the cost of raising a child in Canada while saving on groceries, you could:
- Make a list before you go grocery shopping and stick to it
- Buy in bulk when items are on sale
- Prepare meals at home instead of eating out
- Cook with seasonal produce
Read More: What are Variable Expenses?
Cost of Clothing and Diapers
Children require new clothing, shoes, and accessories regularly as they mature. Recent data shows that parents spend around $74 monthly on clothes for children under 4 years of age.
Interestingly, Canadian parents change around 60 diapers during the first 10 days after a child’s birth.
Considering some of the most extensive packages contain between 140 and 150 diapers and cost about $40, one box won’t be enough for a whole month. Moreover, you would need to spend about $500 from your baby budget annually in Canada on diapers.
Still, saving money on clothes is quite easy. For example, you can take advantage of sales, buy second-hand clothes, shop at consignment stores, or even buy clothes that kids can wear for more than one season.
If you’ve decided on having kids in Canada, keep in mind that the daycare expenses might cost you the most. Sending a child to daycare can be challenging to afford for some families, particularly if they have more than one child.
Moreover, the cost of daycare in Canada varies by location. In particular, the daycare cost in Toronto is the highest, with a monthly median cost of:
- $1,774 for infants
- $1,457 for toddlers
- $1,207 for preschoolers
On the other hand, parents from smaller cities like Quebec pay cheaper daycare fees, with an average monthly cost of $179.
Here are some ways to reduce the cost of daycare:
- Look for government subsidies in your province
- Share babysitting duties with another family
- Find a daycare that offers a sliding scale based on income
- Consider hiring a nanny
Another expense you need to add to your budget when calculating the cost to raise a child in Canada is transportation. Driving a car is costly, especially if you live in a big city with high gas prices. Using public transit instead of driving is cheaper, but still quite expensive.
However, your child can take a bus or tram as transportation or carpool with other kids from the neighbourhood. It might be more inconvenient, but you can save some money while your kid has fun with their friends.
To put things into perspective, a bus ride for 6 to 12-year-old kids is free with a PRESTO card, while 13 to 18-year-old kids pay $92.40 for a monthly pass. When travelling with a paying customer, children who are 5 and under (when travelling with a paying customer) can have a free bus ride.
Even if elementary and secondary school are free in Canada, you can still expect some extra costs that add up to the price of raising a kid. These can include school supplies, field trips, and extracurricular activities. For instance, the latest statistics report that Canadian parents spent about $164 on school supplies in 2021.
The good news is you can reduce this cost by buying second-hand clothes and supplies, asking your child’s teacher for a list of requirements to avoid buying unnecessary items or looking for sales and discounts.
Saving For University
If you’re planning on saving for your child’s university education, you’ll need to start saving up early. Education is another significant expense that affects the cost of raising children.
As per recent stats, enrolling in full-time undergraduate programs at a Canadian university costs approximately $6,693 per year, excluding additional expenses. Presumably, the average student will spend a lot more annually when we factor in books, housing, and other related costs.
Read More: How to Save Money as a Student?
Aside from the routine costs, you will encounter as a parent, some hidden expenses come along and significantly affect the cost of raising a child in Canada. Let’s check them out.
There’s no doubt that children love a good birthday party, especially when it’s their own. Nevertheless, providing a fun experience for your child comes at a price.
Namely, the cost of the cake, decorations, food, and goodie bags can add up quickly. Should you plan to have a party at a venue such as a restaurant or amusement park, the costs can be even higher.
Hence, the most efficient way to save money on birthday parties is to have the party at your house or organize a smaller party with close family and friends.
Extracurricular activities are an excellent way for kids to stay active and explore their interests. Even so, they can also be quite expensive and increase the cost of raising a kid. Lessons, equipment, team uniforms are just some of the costly, yet necessary expenses.
To save money on extracurricular activities, you can look for free or low-cost options in your community. You can also see if your child can participate in a team or club through their school, which is also more convenient.
How to Offset the Cost of Raising a Child in Canada?
Preparing your food, taking a bus, and shopping during sales are common ways to save some coins. Still, all that might not be enough. Luckily, we found some additional financial solutions to help you with raising your children properly.
Maternity Employment Insurance
The Canadian government offers an Employment Insurance program (EI) to lower the cost of having a baby in Canada while on maternity or parental leave. At the time of writing, the government has the following eligibility requirements:
- You are currently expecting or have recently given birth.
- You are a parent caring for your infant or newly adopted child.
- Your weekly work income has decreased more than 40% for at least 1 week.
- Until September 24, 2022: you collected at least 420 insured work hours in the 52 weeks before the start of your claim or since the start of your last claim, whichever is shorter
Per official sources, the basic rate for calculating Employment Insurance (EI) benefits is 55% of people’s average insurable weekly earnings.
Canadian Child Benefit
The Canadian child benefit is a tax-free monthly payment made to eligible families to help them with the cost of raising a child under 18 in Canada.
Wondering how much you could receive? The maximum amount for one child is around $560 per month for children younger than 6, and approximately $480 monthly for children below 18 years of age.
Additionally, from July 2021 to June 2022, you could get up to $2,915 for every child qualified for the disability tax credit.
A parental lifestyle can cost you some serious money. Another way to minimize the total amount is purchasing life insurance. This type of policy can help your family financially if something happens to you.
The death benefit from a life insurance policy can cover the costs of funeral expenses, pay off debts, or support your family. If you’re raising a younger kid, it can also help pay for childcare or education expenses.
Thus, you should consider this option because life insurance is the most affordable type of policy, and it can be an excellent option if you’re on a tight budget.
Registered Education Savings Plan (RESP)
The Registered Education Savings Plan (RESP) is a government-sponsored program that helps families save for their child’s education.
You need to open an RESP account and make regular contributions to be eligible for this benefit. The government will then deposit money into your account based on your investments. Generally speaking, it’s a secure and reliable way to offset the cost to raise a child in Canada.
For full-time post-secondary studies, Educational Assistance Payments limit is up to $5,000 during the first 13 consecutive weeks.
Contrastingly, the Educational Assistance Payments limit for part-time studies reaches $2,500 for every 13-weeks enrollment period.
So, what does all of this mean for Canadian parents? Though raising a kid is no easy feat, the government offers a number of benefits and tax breaks to help offset some of the costs. We hope our guide gave you a better insight into parenting expenses and provided you with answers on how to reduce them.
In most cases, raising a child will cost from $10,000 to $15,000 a year until the age of 18 in Canada.
Some studies showed that average Toronto daycare costs could reach $1,774 per month (or $21,888 per year).
A few significant expenses make up the cost of raising a child in Canada. These expenses include food, clothing, childcare, insurance, education and transportation.