Putting a price tag on children

Martha Muzychka
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Last week, the Fraser Institute, the conservative think-tank, released a new report declaring that the costs of raising a child in Canada had been overestimated, and that it was actually cheaper today than ever before.

Economist Christopher Sarlo says that the annual cost of raising a child is about $3,000 to $4,000, with the former cost arising from parents being especially frugal and careful about unnecessary expenses.

So what are the essentials? Sarlo details food, clothing, shelter, recreation, personal care, household supplies, and school supplies, but excludes daycare because most parents have no daycare costs.

Let’s look at some numbers, shall we?

• According to the last Canadian census, there were some five million children in 2011.

• In 2012, there were 1.92 million kids under the age of four.

• On average, more than 70 per cent of women with children aged three to five work outside the home.

• Recent estimates suggest we need 1.4 million child-care spaces, leaving about half a million kids without need of child care by someone other than a parent.

• Today in Canada, there are 12 licenced spaces available for every 100 kids. That leaves 88 in the care of  their mothers, relatives, home-based daycares, and/or other arrangements.

It is unrealistic to exclude childcare from any calculation of the costs of raising children.

The Fraser Institute study is predicated on two assumptions: one, that it is women who will look after children, especially if we’re talking a family with two parents, and second, if childcare is needed, it will be provided to families on an unpaid basis by family members.

The second big thing to emerge from Sarlo’s calculations is that he has failed to take into account housing and food costs, both of which have been rising steadily in the last five years.

If we take the median cost offered by Sarlo at $3,500 per year per child, we have an average weekly cost of $67 per week, or $9.60 per day.

Let’s look at infant costs. Leaving aside any other major considerations around breastfeeding and bottlefeeding, about 50 per cent of Canadian mothers breastfeed. That means bottlefeeding moms are spending about $2,000 for the first year on formula, even with free samples and coupons. Breastfeeding moms tend to eat more and they also tend to buy more nutritionally dense foods so they may have a higher grocery bill for their needs.

Then you have to factor in diapers.

Disposables for a child for one year will run you about $1,500, again assuming you take advantage of sales and coupons.

Even if you choose to cloth diaper, you still have the outlay plus the laundering and the electricity that uses. Those costs are a little more challenging to figure out, but one site I looked at suggests between $900 and $1,000 per year.

So with just diapers and food alone, baby’s first year runs between $3,000 and $3,500. We haven’t even looked at clothing (and yes, many moms have organized clothing swaps to reduce those costs, but you still buy some, even second-hand), the equipment (car seats, cribs, strollers, toys, books), and so on. (My biggest cost when my child was an infant was heat. I prefer a cool room, but with a January baby in the house, our heating costs went up.)

As children grow, their interests and their needs also expand. Early childhood development specialists note the importance of early stimulation on child development.

Relegating books, toys, recreation, music, art, dance, sports, etc. as minimal costs is shortsighted.

We’re not talking about high-end costs, because more people are turning to libraries and community centres for borrowing rather than buying, but even Brownies or Cubs will run you $150 a year, especially once you include the uniform, special events, and so on.  

And I don’t believe costs go down as children grow. If anything, they increase.

Any parent of a pre-teen will tell you that food alone is a significant factor — how many of you have joked you need to buy a cow for the milk? Depending on where you buy it, a healthy active child will likely go through $20 of milk or more a week, and that will run you about $1,000 per year.

The bottom line for me is that this study is flawed. It is based upon a time and a set of values that are long gone. It fails to take into account the reality of today’s parents. You don’t have to be as rich as Croesus to raise your kids well, but it does take money, and I think the investment, even at responsible, even frugal, levels is worth it.

The problem is the Fraser Institute has set the bar too low, and kids, and our country, will be the ones who lose.

Martha Muzychka is a writer and consultant living

in St. John’s. E-mail: socialnotes@gmail.com

Organizations: Fraser Institute

Geographic location: Canada

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  • Cashin Delaney
    August 28, 2013 - 00:15

    What I read here is a normalization of two parents working. It is not normal to get someone else to raise your child while two parents work. Hydro Place has its own daycare. That is nice. It may be realistic to factor in daycare, but I would rather factor it out. Mom or Dad want to be there kids. Their govt says they must work. If you do not get a good degree, you will also work through your grandchildren's development. Use the NALCOR numbers for daycare baseline. Every child is worthy and deserving of what this crown corp is paying, just get them to write it off into the Muskrat Falls loan! If these kids are gonna foot those big future light bills, then giving them a stimulating, nutritious NALCOR childcare experience seems fair.

  • Kels
    August 27, 2013 - 06:14

    Why would they not factor in child care and supply that number? For most parents the scary price tag on it would be reason enough to not have kids! I still dish out $30/day just for after school care for 2 children and then there are summer camps.... This study is definitely flawed, but the investment in our children is worth it (that's just my opinion of course. :) )