A study that pegged the cost of raising a child in Canada at more than $350,000 made headlines in October.

Why? In part because it’s the first official data on the topic in more than a decade – and it’s an intimidating amount. But it’s also because we like peeking into other people’s finances to see how much other parents are spending on clothing, food and education. It gives us a benchmark against which to compare ourselves.

The issue, however, is that the numbers cited don’t apply to everyone. Averages are often useless, as demonstrated in the joke about the statistician who drowned crossing a river with an average depth of three feet. The findings about how much it costs to raise a child in Canada are a prime example of that.

The Statistics Canada study looking at the period from 2014 to 2017 found that medium-income earning parents with one child will spend $375,000 to raise them to age 17. In 2023 dollars, that’s the equivalent of $455,000, taking into account that the cost of living has risen 21 per cent since 2017.

The report also provided data for households at lower and higher incomes. For the medium-income household we’ll look at here, the income bracket was $100,579 to $165,525 of total household income, in today’s dollars.

Some would-be parents may be left wondering if they could even afford to have a child. But to really understand what these numbers mean, they need to take a closer look at their individual circumstances.

The three big costs – housing, transportation, and child care and education – made up two-thirds of the total cost. But these expenses can vary dramatically from one situation to another.

Housing is the biggest expense. The authors assumed that an individual or a couple who has a baby will need to move into a bigger home and add one bedroom per child. The housing cost is calculated based on the cost of moving to a bigger place. But people who have a baby don’t necessarily move.

Some people already live in a place with two or three bedrooms. For these folks, having a child does not require a move and that means the $103,000 additional cost to house a child as calculated in this study is almost entirely eliminated.

Next, let’s look at the child care and education number. The study shows that from birth to age five, families spend $5,414 over those five years. This number is low for parents who need full-time daycare, even with the recent reduction in daycare costs through Ottawa’s $10-a-day child care initiative.,

In 2023, parents who put their toddler in a Richmond, B.C., daycare can expect to pay as much as $905 a month – that’s $43,400 up to age five if we assume four years of care is needed after a year of parental leave. Even with daycare at $10 a day, the cost for four years would be around $10,000.

Then there’s transportation costs. The study allocated half of the cost of a household’s transportation to the parents and the rest is divided equally among the kids. This means that in a family with one child, that child accounts for half of the cost.

I know many one-child families who own one car – and it’s not an SUV. In these cases, the extra transportation cost of a child is minimal, except for all the gas it takes to drive them around for activities and appointments.

So while Statscan’s numbers work out to an average of $455,000 today to raise a child to 17, for a two-parent family with one child who already lived in a sufficiently big home and didn’t need to buy a new car but required full-time childcare, the total cost is more like $258,000.

So how do you come up with your own number? Well, you focus on the big three costs.

Let’s start with housing. Will you move if you have a child? If you don’t need to move, your housing costs won’t change much. If you do need to move, compare your current rent or mortgage payment to the upgraded one: how much more is it? You may also need to consider the increased costs for maintenance, repairs and furnishing.

Next, look at what childcare will actually cost you. Call the daycares in your area and find out the going rates. The expense will vary depending on where you live and whether the daycare is part of the $10-a-day program. If a nanny is your preferred route, research that option.

On the transportation front, think about whether adding a child would mean you’d need a new car. What about a second car? Would you have bought a new car regardless? What is the actual additional cost that can be attributed to a child?

The other categories have a smaller impact on your personal calculation and you can probably use the numbers in the study. You can see all of the figures on the Statistics Canada website. (Don’t forget to add 21 per cent for inflation since 2017.)

If the $455,000 number seemed overwhelming, remember that doing your own calculations will help you make a more informed decision – and hopefully feel more confident that raising a child won’t decimate your finances.

The Globe and Mail, December 3, 2023