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Cost of Raising a Child in Canada – What to Look Out For!

Written by:
AFCC - Founder and Executive Director of The Dollar Detectives

Having a child is an extremely exciting and important part of someone’s life! There are so many questions that may be running through your mind before you have a child. Is it going to be a boy or a girl? What school do you enroll them in? How will you teach them about the world? Will they look more like your significant other or yourself? One of the most important, but sometimes overlooked, questions to ask before giving birth is what costs come with raising a child in Canada?

General costs of raising a child

Intuitively, the cost of raising a child in Canada is expensive. Soon-to-be parents must account for things like the extra food cost, opening up a Registered Education Savings Plan (RESP), and daycare costs. They should also consider opportunity costs associated with raising a child. Things like the lost income from maternity leave and paying a babysitter when you want to go out can add up.

Financial costs are one of many things to consider. You’ll be giving up time for your own leisure activities to take on a truly full-time job as a parent. Once you factor in these costs, the price of raising a child only gets steeper. Even seemingly impossible at times.

The costs add up quickly! From day one new parents have a pile of new costs to consider. These include a car seat, crib, formula, stroller, high chair, and diapers. Even after your child grows to be a toddler or youth, there are more costs. Things like new clothing as kids grow, school supplies, and extracurricular activities pop up or increase. In dollars and cents, on average, the total cost of raising a child in Canada ranges from $10,000 to $15,000 per year.

How to Prepare for Upcoming Costs

It may seem daunting or even nearly impossible to raise a child in Canada with all the mentioned costs. However, the best way to ensure a happy and financially manageable future for your family is to prepare for uncertainties in advance.

For starters, ensure you are financially stable before starting a family. Many new parents do this, unfortunately, often it’s not done correctly.

Here are some signs that you are financially stable:

  • Bills getting paid on time
  • You have “wiggle room” to do and buy things you enjoy
  • You know you could handle a financial setback
  • Your net worth is going up
  • You’ve set up automated savings
  • Your debt load is easily manageable
  • You give to those less fortunate

Once financially stable, it’s a good idea for new parents to look into government and employer assistance programs. For instance, look at your company’s maternity leave policies and ensure that they can properly support you and your new family. Additionally, take time to do your own research regarding insurance, daycare costs, schooling, and RESP. This proactive action will help reduce the impact of heavy upfront costs in the future. If you have stable finances but are considered low-income, consider the Canadian Child Benefit. It could provide $553.25 per month for eligible children under the age of 6 and $446.83 per month for eligible kids between ages 6-17.

Overall, there are a variety of things to take into consideration before raising your own family in Canada. The more effort you put into planning ahead, the more money you’ll save and the less stress you will encounter.

Other Considerations for Raising a Child

Like myself, many parents want to and will set aside money for their children. Especially when the average cost to raise a child in Canada is so high. This is even more of a problem if you are low-income and want to build a solid financial foundation for your kids to grow on.

However, one of the things parents should be mindful of is saving too much money for their kids and not leaving any for themselves to retire with. Properly saving for retirement is good for you and your kids. It avoids you from being stressed about supporting yourself and putting the burden on your children to take care of you financially when they’re older. Also, it’s much easier to provide for your family when you have a place to draw your funds from. So, make sure you invest in yourself just as much as your children. This type of investment in yourself includes investing in stocks through a TFSA, RRSP, skills to get a higher paying job and, other assets! If you’re confused about how to invest in both you and your child, seek professional guidance by speaking to a financial advisor.

Another consideration is one that parents may not actually expect. This occurs when parents put too much emphasis on an RESP. This may come as a surprise to you. The importance of RESPs is stressed highly in our culture, and rightly so. Helping to offset your children’s future education costs is important. However, parents should consider protection for not only their kids but, themselves as well. This is especially important if you are low-income. Two great insurance options are critical illness and disability insurance. They allow for some protection in the case of an accident or injury that leaves you out of work for a period of time. Remember, it’s your responsibility to look after yourself so that you ensure you raise a happy and healthy family.


Parenting can be hard on your finances, leaving you feeling like you are penniless and overwhelmed with stress. However, the journey of parenthood doesn’t have to be so difficult. With proper planning and acknowledgement of the costs, starting a family can be a fun and rewarding experience. Make it the most positive possible by challenging yourself to do the research. Uncover all the tax benefits, CRA benefits, and other Government of Canada programs available to help guide you through a wonderful and fulfilling path of parenthood.

If you’re already struggling with debt, the experts at Consolidated Credit Canada can help. Contact us today to get started!

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