Raising a child not so costly, says think-tank

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$3,000-$4,000 is the basic cost of raising a child in Canada estimates the Fraser Institute, releasing figures radically lower than previous estimates. The conservative think-tank says it has never been easier financially to raise a child in this country.

Radically different estimates

Previous estimates have pegged the annual cost of raising a child between $10,000 and $15,000. Those numbers could discourage lower income Canadians and immigrants from having children, says the report’s author, Christopher Sarlo, professor of economics at Nipissing University in North Bay Ontario and a senior fellow at the Fraser Institute.

His lower estimate is based on the cost of providing a child’s essential needs, such as food, clothing, personal care, household supplies, recreation and school supplies. He does not include the cost of daycare, estimated to be about $18,000, because he says fewer than half of Canadian families use the service.

Spending not commensurate with income

Parents’ spending on their children varies greatly, says Sarlo. In his view it is wrong to assume that higher income families spend more or that lower income families spend less. Each individual family makes unique choices as to what they spend. Some may choose expensive private schools, music lessons, trips, elaborate toys or expensive clothing.

But the actual expense for the basic necessities represents a smaller portion of family income, says Sarlo. Real incomes are higher, there are more dual income families and couples are having fewer children. All of that, he thinks, makes it easier than ever to have children in Canada.

There are those who will disagree.

Studies like this are used by individuals to make personal decisions about having children. But they are also used by governments and lobby groups in discussions about how much support families should get from the public purse.