A study released by the Fraser Institute says that contrary to reports that have the cost of raising a child exceeding $200,000 or $10,000 a year, the actual cost of a child more likely between $3,000 and $4,500, or between $55,000 and $80,000 from birth to the age of 18.
In “The Cost of Raising Children,” Chris Sarlo, a professor of economics at Nipissing University in North Bay and a senior fellow at the Fraser Institute, calculated the cost of basic needs such as “additional food, supplies and health needs, personal needs, educational/learning items, furnishings and clothing for a child should be included.” He said “the measurement of the cost of children is designed to capture the costs to the parents that are due to the child; costs that the parents would not have if the child were not there.”
Using Health Canada’s “Nutritious Food Basket” and the Montreal Diet Dispensary’s “Budget for Basic Needs” – a commonly accepted source for the “minimum adequate standard of living” – Sarlo estimates that the extra costs for basic needs such as food, clothing, personal care supplies, and school supplies for a four-year-old to be $2,264.38 and a 12-year-old to be $4,115.04.
Chad Lucas, a columnist with the Halifax Chronicle-Herald, chastised the Fraser Institute paper, saying, “I’d counter that their own study is highly selective.” Sarlo would counter that most other studies are not selective enough.
The Nipissing economist noted in the study several sources that put the cost of raising a child to the age of 18 and not including post-secondary schooling, the mid-$200,000s. He reported that the U.S. Department of Agriculture puts the figure at US$227,000, a 2011 MoneySense article pegs it at $243,660, and a 2013 Guardian story puts the cost at £218,000 (or $350,000); the Financial Post reported last year that it costs $17,000 a year to raise a child in Canada, or just over $300,000. Sarlo said, “these estimates are as frightening as they are wrong,” because “they simply don’t reflect the experience of real contemporary families raising children.”
Sarlo critiqued their methodologies, saying that transportation or housing costs are not easily ascribed to children noting that surveys of household spending finds that there are not large divergences in the costs of housing and transportation when it comes to one-child families and families with no children among households with similar income. “Average rents appear to be fairly similar across family sizes,” Sarlo observed.
He also said it is incorrect to put the cost of daycare into such estimates because of the varied child care arrangements families have, noting that the majority of Canadians do not incur formal daycare costs. “There certainly will be unavoidable child care costs for some families,” Sarlo admitted, “however, it is preferred to add in a budgeted amount only for those families for which this is a relevant expense rather than impose the average on all families across-the-board.” He said applying “a given dollar amount (say, $5,000) for child care to all families with children is simply inappropriate. It does not reflect the actual experience of families raising children at the present time.”
Feminists and daycare advocates condemned Sarlo’s decision not to include daycare costs, ignoring his rationale that an average cost was inappropriate considering the myriad child care arrangements families have. Katie Arnup of the Childcare Advocacy Association of Canada complained, “the Institute’s decision to omit any provision for child care costs is based on their argument that child care is an unnecessary or ‘special’ added cost.” MP Niki Ashton (Churchill), the NDP Critic for the Status of Women, trotted out the number of women who work, implying that all of them use institutional and costly daycare.
In a column responding to critics, Sarlo reported that in 2009, “80 per cent of ‘couple’ families with one child report no expenditure on daycare,” and “overall, 71 per cent of couple families with children and 84 per cent of single parent families with children spend nothing on daycare.”
In the study, Sarlo also critiqued the inclusion of discretionary spending on items such as electronics and travel in most child-raising cost estimates, saying that not all families incur such costs as they are largely dependent on household income.
The Fraser Institute study did not consider children with special needs saying such families were unrepresentative.
Sarlo said in the study, “it has never been easier, financially, to raise children in Canada: the necessities are easier and less costly (as a proportion of income) to acquire; real incomes are higher; there are more dual earner families; people are raising fewer children than ever before; and, for lower income families, there are substantial government benefits that will partially or completely offset the cost of raising a child (benefits that were not as generous in the past).” Despite these economic advantages, Sarlo pointed out the media often highlights the supposedly skyrocketing costs of raising children.
In the study, he said if the inflated costs were the true costs of raising children, “they would be sufficiently high as to virtually exclude lower income folks from ever being able to afford children.” In his column Sarlo said, “it would be a shame if we discourage prospective parents by insisting that it costs $12,000 to $15,000 (or more) per year to raise a child.” He also opined that “it would be regrettable if flawed estimates begin to influence fertility decisions.”
