What Does It Cost to Raise a Child in Canada?

The cost of parenting is expensive. While Canadians can take advantage of parental incentives, such as maternity leave and parental leave, they also get a shock when they start spending money on formula, diapers, baby gear, and accessories. Moreover, the costs climb over time, with the major expenses assumed when a child is 15 to 17 years old.

The following information will give you more details about the costs assumed by Canadians who raise children in Canada.

The Cost of Taking Care of a Baby – The First Year

During the first year, expect to pay around $9,000 to take care of your infant. After that, you will pay from $10,000 to $15,000 annually. The first year, you might say, initiates you to the idea of adding an extra household member into your budgeting.

Financial Support for Maternity Leave and Parental Leave Times

Before having a baby, the compensation of maternity leave gives couples 3.5 months of financial relief. After that time, parents may take 40 weeks of standard parental leave or 69 weeks for extended parental leave. During this time, an employer is expected to hold the parent’s job. Employment insurance can be used to replace 55% of earnings each week, capping off at $573 weekly.

Anyone taking time off for these reasons usually will elect to take leave one after the other, but couples can also take time off at the same time. Okay, that may provide a little financial relief, but it just gives you a small reprieve before you start getting socked with the costs of parenting. That’s why you gradually have to prepare for your new spending adjustments.

The Cost of Raising a Child Until He or She Turns 18 Years Old

In the past 10 years, the costs of raising a child, according to Statistics Canada, was pretty hefty. At that time, parents who raised a child until he or she turned 18 years old spent a little over a quarter of a million dollars. That was 10 years ago. When you add inflation and account for a higher cost of living, that figure, as you might guess, is probably closer to $275,000 or $300,000 over the 18-year period.

What you pay in infant formula will pale by comparison to what you will spend at the grocery when your child becomes a teen. So, each year has its challenges when it comes to accounting for costs. Therefore, you need to prepare an Excel spreadsheet during pregnancy to get used to your new budget and costs.

First-Year Expenses: A Basic Overview

Let’s break down the expenses for the first year.


Whether you choose disposable or reusable diapers, you still have to pay for diapers – a major necessity. During the first year, you will need more diapers when you first have your baby than later in the year. However, diapers are not the only thing that will set you back financially.

You also have to account for the items that go along with diapering. These ancillary props may include wipes, a changing station, diaper bin, and diaper cream. According to the national average, you will pay about $900 alone for this cost annually.


What you spend on feeding, depends on whether you opt to buy formula or breast-feed. While it costs more to buy formula, you still will need items, such as a breast pump and bottles and breastfeeding pillow if you opt for the alternative. The amount you spend, on average, ranges between $750 and $1,000. So, feeding your child only milk can be quite costly.

Once your child begins eating food, after 6 months, you can expect to spend, on average, about $25.00 extra each month. You also have to factor in costs for baby clothes (up to $1,000 per year) and other accessories, such as a bassinet, crib, and blankets.

Life Insurance

When you are supporting a dependent child, you need to take out life insurance as well. Your children rely on the income you earn, so having a policy will prevent financial hardships should you pass away. If you are young and in good health, expect to pay about $40 per month for a term policy. That type of coverage will cover the costs of your funeral and pay off your mortgage as well. Policies offer different options, so you should compare carefully.

We have broken down everything you need to know about life insurance in Canada – how it works, the cost, the different types, and how you can choose the right life insurance for you and your family. Compare quotes!

Baby Gear Essentials for Parents-on-the-Go

Baby gear for the first year must also be considered, or the items you need for transport. This may include a car seat or baby stroller, both of which can run as high as $3,000.

A RESP Account

Once you establish a budget for the first year, you can begin planning the future. One of the first things to do is to set up a RESP account or Registered Education Savings Plan. Doing so will lessen any burdens you may later feel about paying for your child’s education.

A Breakdown of Parenting Costs Over an 18-Year Period

After you start budgeting for child care, you will find some of your expenses will have more of an impact than others. For example, let’s look at some percentages, based on raising a child over 18 years for $250,000 to $300,000. Where will most of the money go?

Around 30% of the money will be spent toward shelter
It costs about 20% to feed a child when he or she lives at home

Therefore, a good half your budget will be directed toward food and shelter, with incidentals, such as clothing, accessories, computers, entertainment, club participation, and academic obligations rounding out the costs.

Questions about the Cost of Raising a Child in Canada

When do expenses start to really rise during the parenting years?

Expenses get higher as your child gets older. While costs for children from birth to 2 years average about $300 less monthly during an 18-year-period, they climb, on average, to $900 or more per month for teens from 15 to 17 years old. During those teen years, kids have higher food costs and they begin to drive, so you may have to buy a second car and additional insurance.

Why is estate planning important once a child is born?

You should begin estate planning before you sign up for an RESP for your child. Your child will depend on you for his or her well-being, so begin estate planning once your child is born. While this topic seems counterintuitive to giving birth, it still makes solid sense once you become a parent. Use estate planning to take care of your child’s needs in case you can’t yourself.

Child benefit loans and cash advances are rapidly becoming more popular due to a variety of circumstances that present themselves to recipients. Find out if you’re eligible!

Final Thoughts

Adjusting your family budget for your newest family member will help you adapt your financial planning in the future for other child-related necessities. While taking care of children is a big responsibility, it is also an activity that will make you wiser financially.

Budgeting therefore is the process of understanding dollars and cents and having a personal financial plan in place to help you pay back debt and stay out of further debt in a timely fashion. Learn more!

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Smarter Loans Staff

The Smarter Loans Staff is made up of writers, researchers, journalists, business leaders and industry experts who carefully research, analyze and produce Canada's highest quality content when it comes to money matters, on behalf of Smarter Loans. While we cannot possibly name every person involved in the process, we collectively credit them as Smarter Loans Writing Staff. Our work has been featured in the Toronto Star, National Post and many other publications. Today, Smarter Loans is recognized in Canada as the go-to destination for financial education, and was named the "GPS of Fintech Lending" by the Toronto Star in 2019.