Statistics Canada indicates that “Two-parent families with two children and an annual income of more than $135,790 from 2014 to 2017 spent on average $403,910 per child from birth to age 17”, or about $24,000/year/child. Assuming a marginal tax rate of 40%, this equates to $40,000 in household income per child per year.
https://www.statcan.gc.ca/o1/en/plus/5111-how-much-do-canadian-families-spend-raising-child
This is scary data – from 2017.
Statistics Canada goes on to state that “the cost of living has risen over the past decade, with especially large price increases for various goods and services since early 2021. These increased costs mean that the amount parents spend on children has likely increased since the data used for this study were collected in 2017.
For example, shelter prices, as measured by the Consumer Price Index, have risen by just over one-quarter (+25.3%) from July 2017 to July 2023.
The cost of transportation was up by almost one-third (+31.3%) this July compared with July 2017, while the price of food was up by over one-quarter (+28.7%).”
If the Federal and/or Provincial government is serious about stabilizing (increasing) birth rates, I have some suggestions:
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Eliminate all the complex/nuanced support programs including federal daycare funding and replace with a tax credit of $25,000 per child under the age of 18 (up to 3 children)
- Provide a tax credit of $10,000 per child between the ages of 18-24 (up to 3 children)
- Reduce the age threshold for a TFSA from 18 to 12 years of age – let’s get kids educated on the benefits of saving/investing
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Increase RESP contribution limit to $75,000/child and remove government matching; make withdrawals tax-free
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Index EI payments during maternity leave to 80% of previous years’ taxable income for 12 months
- Permanently remove GST/HST from necessities
- Strollers and car seats
- Diapers, formula, etc
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