You can raise a child on $3,000 a year, study says

Just cut that trip to Disney World — and daycare


OTTAWA – The Fraser Institute says it’s never been easier financially to raise a child in Canada, with the annual cost much lower than many believe.

The conservative think-tank says it is possible to raise a child on about $3,000 to $4,000 a year, and even less if parents only include necessary expenses and are careful with their dollars.

That is a far cry from some studies that have put the annual expense per child in the $10,000 to $15,000 range — with the total bill for raising a child to age 18 at more than $200,000.

The Fraser Institute says in a new paper that the higher numbers are discouraging for lower income Canadians, who might come away with the conclusion they cannot afford to have children.

But many lower income people can and do raise healthy children, says the paper, authored by economist Christopher Sarlo.

Sarlo concedes his lower estimate is based on the cost of providing a child’s essential needs, such as food, clothing, personal care, household supplies, recreation and school supplies.

Very few frills are included in the Fraser total, including no allowance for daycare or lost income if one parent decides to stay home to take care of the children.

That is likely to raise the ire of some family and early-education supporters, who argue that daycare has become a necessity for many dual income couples and important for a child’s social and educational development.

Sarlo said the exclusion of daycare is not because it is not a legitimate expense but because the majority of parents have zero child-care costs, saying the item is best treated as a special expense for families for whom it applies. That cost alone, however, would more than double the Fraser annual estimate for those families.

The paper also notes that some affluent parents no doubt spend plenty of money on their children — for music lessons, trips to Disney World, expensive clothing, elaborate toys and games, and on education, including private school.

But these expenses are not needed in order to raise a healthy child at socially acceptable standards, the paper argues.

In truth, Sarlo says, it has never been financially easier to raise a child in Canada because the necessities represent a smaller portion of family income, real incomes are higher, there are more dual income families, and couples are having fewer children than ever before.

Filed under:

You can raise a child on $3,000 a year, study says

  1. Yes and no. To do so requires one parent to stay at home as no money for daycare and excludes all extras…. it would be very hard to do $4k a year or less with school fees and zero extras. Child needs to be healthy too, as just turning your car keys costs $10.

    Second issue is these are after tax dollars. Lets relax a bit and say $5k per year as the child could use a bicycle or something. But $5k after taxes is $10k in wages, $4k goes to income/employment taxes with $1k to property/utility taxes.

    But then $10k-15k per year is opulent if it is tax paid cash. But if that is $10-15k earnings, well, the numbers are closer than they look.

    Don’t forget, when you include hidden spend side taxes of one order of earn/spend, 50% or more of everything we earn ends up in government, the most expensive item in anyones life. Have lots of government children we are forced to support.

  2. “But these expenses (education, including private school) are not needed in order to raise a healthy child at socially acceptable standards, the paper argues.

    My headline would be-

    Fraser Institute: Public Education is the way to go; Private school unnecessary: report”


    • You live in Germany?

  3. I would argue that it costs even less than the article suggests given the tax breaks, lack of time to do more expensive activities and becoming more discreet with your spending.

  4. Why is it considered ‘lost income’ if a mother decides to stay home to raise her own children? Is raising her own children not her job? And are the savings incurred by raising one’s own children (no daycare cost; home made meals; etc) not to be counted as reward for the job of staying home?

    • Because many people can’t afford to support two people, let alone three including the child, on one income. Sure, you can cut out childcare expenses by having one parent stay home, but you also can’t afford to eat as well, or, you know, have heating/cooling/entertainment/decent clothes….

      • You are correct by saying that not ALL families can afford to live on one income. But many, many families do not need a double income to make ends meet but want that second income.

        When you add in the extra car, the extra lunches, the extra daycare cost, no time to prepare meals from scratch and so forth, many women go out to work for very little extra money collected in the end.

        Just do the math.

        A lot of women go out to work when their children are young because they WANT to go to work. There is a difference between ‘want’ and ‘need’.

        • When you add in the extra car, the extra lunches, the extra daycare cost, no time to prepare meals from scratch and so forth, many women go out to work for very little extra money collected in the end.

          Put that way, it’s astonishing that there’s a father alive who’s employed. 40h/ week for next to nothing, once you deduct the cost of the above.

        • So the men are working because they want to, not because they need to? Or is it just that women that should be barefoot in the kitchen, unless they selfishly decide to work outside the home? Yikes. it’s like you haven’t seen this side of the ’60s.

          • When both parents go to work outside the home, the kids must be looked after by someone else. That is the point about daycare cost.

            When only 1 parent works, and the other stays home, there is NO need for daycare cost.

          • But that foregone daycare cost comes with a price: the wage income that could have been earned by that parent.

          • And so do the actions of you posting here; it comes at a lost economic opportunity; you could have spent your time making money. All people who don’t make as much money as Bill Gates, are a lost economic opportunity, by your ‘logic’.

            It is all about choice. Life is about making choices, not just considering things as ‘lost economic opportunity’.

          • No, you just don’t understand opportunity cost. Wikipedia has a good overview.

          • But you are taking on a double standard; when women want to stay at home and look after their own, it is considered (by you and others) as an opportunity cost.

            But when you decide to post comments instead of trying to do what Bill Gates did or does, or what Warren Buffet did or does, you have supposedly not lost opportunities.

            So, how do we tabulate ‘opportunity cost’?

          • Are you saying I have as good a chance of being the next Warren Buffet as a woman has of getting a job? Either you are an epic chauvinist or I should be extremely flattered by your faith in my abilities. I’ll repeat: you don’t understand opportunity costs. It’s explained in every introductory economics textbook and in wikipedia here:


          • You don’t understand that you are taking a double standard when it comes to ‘opportunity cost.’

            Now you insert the word ‘chance’. Life is about chances. I was a stay at home mom to give my kids the best chance, in my opinion.

            ‘Opportunity cost’ is about opinions, what could have been or should have been, etc. Nothing exact about it at all. But at least be consistent about it when you use the term ‘opportunity cost’.

          • Francien, you’re not going to win a battle on redefining opportunity cost. My point stands.

      • And some people love to brag about being poor but ‘virtuous’….trying to make an asset out of a liability….expect to hear a lot of that on here. LOL

        • You do not understand the world. People can indeed raise children for $3,000 @ year, if they so want to!

          It is you, EmilyOne, who does not understand the concept we are talking about. Not all the families who claim to need a double income in fact NEED that double income; they WANT a double income.

          You do not want to understand the difference between ‘want’ and ‘need.’

          All you want to do here is try to discredit me, now indirectly because you are to cowardly to address me directly!

          This is not about being ‘virtuous’ trying to make an asset out of a liability; this is about people being smart about their money.

          You have no idea who you are talking about. You have no idea who I am. All you do is assume.

          • Maybe you should have splurged on some lotion for your skin, Francien, it seems a little thin.

          • Why would I buy lotion for my skin? Perhaps EmilyOne should do us all a favour and find some courage. Then these comment boards would at least become interesting.

          • Um… it’s not always about YOU there @Francien.

          • Who says I think it is about me?

            Where is your opinion on the subject at hand?

            A real opinion without having to resort to personal insults?

        • Hell, I raised 4 children to the age of majority and I doubt that I spent $3,000 on each in their entire lives. You don’t have to be rich to have a basement, and the basement is the place for raising children. No need for expensive diapers if you keep the little nippers in a tiled laundry or utility room until they are toilet trained. Hell, any room with a floor drain will do. Combine bathing and clean-up with an affordable pressure-washer. Let the toddlers care for the the infants while the older children hook rugs in the next room. Responsibility and self-reliance, that is the way to raise up children. If you’re not turning a profit on a kid by the time they turn twelve then you’ve mucked up the job and you might as well dump it on the state and start again from scratch. Next time, don’t be such a bleeding heart lefty and let the lazy buggers learn how to forage for their food and clothing.

          • Trailer-trash raising trailer-trash; you must be proud of yourself!

            Trailer-trash usually is. :)))

          • How dare you insult my children like that. While it is true that I was raised in a trailer (it was a U-Haul) but I already stated clearly that my children were raised in a basement. Trailers don’t have basements, Ms. Verhoeven. If you weren’t part of the decadent, jet-set you would already know that.

          • NOW yer talkin’!

            Why shouldn’t they pay for their own upbringing? Toughens ’em up, I say!

            They don’t need iPads, books, TVs, travel, education…..that’s just modern day molly-coddling!

          • Oh, you got a buddy to play with now! How good for the children to have a buddy to play with.

          • A child does not need a new ipad every year.

          • Eduction is paid for by the taxpayer up until the end of highschool. If kids don’t have a part time job by the time they are 16, they are not being parented properly.

          • Do you know that some of these spoiled little brats are going to these so-called “Dentists” every six months! and having their teeth “cleaned” and their cavities “filled.” Can you imagine?!?1 In my day, we chewed on a rope and we thanked almighty god for the opportunity. And if a tooth offended us, we plucked it from our mouths and buried it in unhallowed ground.

          • I know! Utterly shameful! Toothbrushes and toothpaste as well….!

            And of course we won’t mention crayons, paint, teddy bears, video games, iPhones, sleds, wagons, robots…..none of it is necessary.

            You’d think they wanted to live in a first world country and in the 21st century or something!

    • You’re trolling, right?

      • You tell me: is trolling the practice of never giving opinions? According to that definition, I am not trolling.

        So tell me: what is it you want to do here? Do you have opinions on anything, on any topic? Is it ok, according to you, if other people express their opinions other than insulting people?

        • Why thank you for the question because that is in fact not the definition of trolling. From wikipedia:
          In Internet slang, a troll (/ˈtroʊl/, /ˈtrɒl/) is a person who sows discord on the Internet by starting arguments or upsetting people, by posting inflammatory, extraneous, or off-topic messages in an online community (such as a forum, chat room, or blog), either accidentally or with the deliberate intent of provoking readers into an emotional response or of otherwise disrupting normal on-topic discussion.

          • Good lord….somebody who actually knows what trolling is….[and in her case, spamming as well.] Thank you Peter!

          • No, Peter should thank you; you have just given him the proof he needs.

          • First off: wikipedia is written by people and all people have opinions. Not all people express their opinion, but that is another matter.

            And what is wikipedia’s definition of ‘opinion’?

          • Well you could look it up yourself but for kicks:
            “In general, an opinion is a judgment, viewpoint, or statement about matters commonly considered to be subjective, i.e. based on that which is less than absolutely certain, and is the result of emotion or interpretation of facts. What distinguishes fact from opinion is that facts are verifiable.”

          • I have posted many facts.

            For a reminder, let me refresh your memory:

            April 25, 2012 – Queen’s University, Kingston, ON. $12,000

            April 30, 2012 – Literacy for Life, Saskatoon, SK. $20,000

            June 26, 2012 – Canadian Mental Health Association – Halton Region, Burlington, ON. $20,000

            June 27, 2012 – Grace Foundation, Saint John, NB. $20,000

          • Yes, so Justin Trudeau could have stayed home on those nights instead of leaving the kids with the nanny but then his lost income would be $72,000 but maybe he spent $400 on childcare – so you can see why he made the choice.

          • Yes, we agree; it is indeed about making choices. And when people make choices, they have to take responsibility for those choices made.

            In fact, the making of choices is all about taking personal responsibility, and when a parent decides to raise a child on $3,000 a year, that, too, is all about choice.

            Now, when people get paid a salary but then skip that job to go out and perform the very same job for an extra fee, then I think those people should explain to their children what the parent is doing.

            Handing over one’s child to a babysitter in order to go double dipping is not such a good example to follow for the children, don’t you think?

          • Exactly, it’s a choice that involves “lost income” from paid work outside of the home.
            Haha, I’m sure Justin Trudeau like any high paid professional in 21st century doesn’t rely on a babysitter but has a live-in nanny on a work visa from the Philipinnes. With respect to the example he provides to his children, I couldn’t care less. I don’t judge how other people parent.

          • Warning: FV ‘believes’ those groups and schools paid Justin with taxpayer money for the fun of it, when in fact they raised the money themselves by selling tickets to an audience, then paying his fee, and then using all the leftover money to buy things they need that no govt can or will provide.

            She’s a Con shill….and a poor one at that.

          • w.t.f.?

          • I think this ticks the extraneous information box. Textbook case of trolling.

      • Always.

        • And are you afraid, too, to give us an opinion on the difference between ‘need’ and ‘want’. Or is finding a buddy system more important to you? Always needing someone else to feel secure, or what?

          Hey, consider this trolling too. Why not? What’s the difference? No one here wants to discuss anything anyways. The Harper gang hangs out here and the real die-hard haters hang themselves at the G&M. Discussing something? Who would dare……..

          • I want a family to be able to take public transit to a Subway restaurant and buy their kid a 6 inch sandwich and an apple juice for lunch without feeling that said trip to Subway has exhausted their entire child-rearing budget for the day, and eaten in to a bit of tomorrow’s to boot.

            I think that as a country, that’s not to much for us to want for our nation’s kids. And if it is, then I think we need to reevaluate our priorities.

          • Is there a way to block her so we don’t have to see her lunatic rantings? It’s obvious she’s never held a job or raised a family and it’s all becoming a bit embarrassing to have to partake in the delusion.

          • Now you want to block me? Why? Did I not just answer your post in a polite manner? You may not like my opinions but do all opinions here have to be the same to be counted as a valid opinion?

          • No, you’re obnoxious and you’re opinions are the opposite of valid. Also nobody likes you and you’ve turned what was once a mediocre forum here at Macleans into a complete waste of space with your constant delusional ramblings… get off the internet, go knit a sweater and pretend that you’ve made money.

          • So now you are jumping on the bandwagon, too. Hey, let’s go bug Francien, boasting who can best discredit her.

            What a silly game you people are playing. I am not here to be liked.

            Are you?

          • Boy, you really told her!

            Why all the hostility?

          • I never said that knitting a sweater makes money. So why would I go and do that?

          • Why do you feel the need to spread lies? I raised several kids. I have had jobs and still have one when I decide to work. Just because I don’t have to work all the time now, does not mean I never worked in my life or held a job. I have worked lots and held jobs.

            But I also know what the value of saving is; that’s why I don’t have to work all the time now, at least not for someone else.

          • That’s just silly. Francien has the right to be wrong about everything, and to inform us of her wrongness.

          • But what makes you think that on the $3,000 per year per child, as suggested in the report, you could NOT go out and have that subway treat once in a while?

            It is entirely possible to have a treat like that once in a while when raising kids on $3,000 a yr per kid.

          • I guess I just don’t see a 6 inch Subway sandwich and an apple juice as a “treat” exactly, nor do I think that taking a 6 year old and a 13 year old to the zoo for the day, using public transit and with a similar lunch, should require the equivalent of 3 full days worth of your child-rearing budget.

    • It’s considered lost income because the stay at home parent forgoes earning an income outside of the house by staying at home and performing unpaid work. It’s related to the economic principle of opportunity cost. Parents often choose to stay home and raise their children because the lost income is less than the costs of child care. Alternatively, if the lost income is greater than the costs of child care they make the opposite choice. The Fraser Institute’s report, according to this blog post, fails to adequately consider these issues in the cost of raising children. Does that make sense?

      • Did my post make sense to you? Of course it did not because I am saying the same thing but not count it as ‘lost income’. When a parent stays home instead of going out to make money, then that parent staying at home, TOO, has an income gained, namely indirectly not having to pay for day care and other costs because the parent stays home. The parent has then ‘earned’ an income by staying home! Looking after children is a job, not a job opportunity lost and YES, it does make money in the indirect way.

        But all of that was indeed already explained in my earlier post.

        • I get it. You maintain a literal interpretation of the idiom “a penny saved is a penny earned” such that forgone income from choosing to stay home isn’t “lost income” because the parent earns money by saving money on childcare expenses and baking his or her own bread.

          So I could quit my job and go home and, inter alia, knit my own socks and the salary I no longer receive won’t be “lost” because I’ll save money on, inter alia, socks.

          • You may laugh about it, but a penny saved is indeed a penny earned.

            Take this example: I had a choice to go work last week or build my own deck and sauna. To have someone build the deck and sauna for me would have cost me $50 @ hr while I would go out and make less than half of that per hr.

            So I decided not to go out and work but build my own deck and sauna. I still have to pay for the wood but I don’t have to pay for the $50 per hr labour. And yes, because I have done it more often, I have learned to hammer away, which has saved me many hrs of going off to work outside the home.

            Not everyone can find casual work like me, but perhaps that then should be considered for a choice in the workforce.

          • 1. It costs way more than that to have someone build a deck for you.
            2. Nobody is going to pay you $25/hour for casual work unless you’re giving HJ’s to highschool students behind the gym.

          • And I am saying that if I had hired someone to build my deck, I would have spent more money than now when I did it myself. It’s a 25’x16′ deck btw. And I lied: I did not hammer but used screws all throughout, the weather resistant ones. It’s a beautiful deck, I may add.

          • Peter, try reading correctly: I said less than half.

    • Opportunity cost. It’s basic economics.

      • What an opportunity lost: Andrew_notPorC has not become another Warren Buffet. Instead he is loosing a lot of money by telling me how his ‘logic’ works!

        • Thanks for the troll. This is just the ad hominem fallacy.

          • Please explain further.

  5. Completely agree with the Fraser Institute report. I am proof of that. We raised our children on less than $3,000 @ year and those children are now very successful adults.

    I was a stay-at-home mother. Cooked meals from scratch, which saves a lot of money! My two girls slept in the same bedroom for years! Was good for them, good bonding. My son played with pieces of wood (left-over chuncks from building construction projects) and loved it! He played, hammered and build with those blocks for hours and hours. My kids were not given a vehicle when they turned 16. Instead they worked some hours at A&W and we pitched in some extra in the end for their first vehicle. They paid for insurance, as it should be.

    My younger girl wore the clothes of the older girl when the time came. Children do not always wear out their clothes before they grow out of them.
    We went on trips, too, but even trips don’t have to be overly expensive. It all depends on how and on what one wants to spend that dollar.

    I could go on and on about how inexpensive it can be to raise very healthy children. Now I have a grandson and I bought a second hand crib for him to sleep in when he’s here! $10.

    • i totally agree with you, because i made the decision to be a ”stay at home’ mother for my two kids. It’s the best decision i ever made. They now are successful adults. I always say, “you don’t raise children with money, but you do with values” (then they work their way to money) . Material (things) are only that.!
      These children are my pride and joy, (no amount of money can buy that.)
      P.S. I am not any poorer than the average joe!

      • “You don’t raise children with money, but you do with values!”


    • So you were raised on less than 3000 a year. That actually explains a lot.

  6. Betcha the Fraser funders spend a lot more than $4K.

    • Apparently only rich kids are supposed to go to dentist, since my family spent more than $3k per kid on dentistry before we turned 18.

  7. People are afraid to enter into a discussion about the difference between ‘need’ and ‘want’. The Fraser Institute report referred to above, clearly deals with trying to find the balance between ‘need’ and ‘want’. But most people are afraid to discuss that very real topic because it comes down to the meaning of personal responsibility and THAT is not to be discussed at any time, right? Right.

    • We’ve been discussing personal responsibility for months, ever since it turned out so many of Harper’s Senate appointees are thieves who steal money from Canadian taxpayers.

      • ALL senators who abuse the system must be held to account.

        ALL MP’s who skip the House in session to go out and deliver speeches for a fee must be held to account.

        An MP’s job description includes the giving of speeches. Any MP IS already being paid for giving speeches.

        Only Justin Trudeau has two sets of speeches; the ones he delivers as an MP and the ones he delivers for an extra fee.

        • Abuse = abuse = abuse.

          Omission is implicit approval. Your fixation on Justin’s speeches is irritating because you are deliberately ignoring the CPC transgressions.

          Why not fixate on something more important, like how Harper strategists reported yesterday that “his primary political goal remains the [unpatriotic] destruction of the Liberals,” instead of the economic and social health of our nation…(

          Now THAT’S something to get your supp-hose in a knot.

          • Wallin and Duffy and Harb abused the system, many times over. Wallin and Duffy and Harb abused the system and there are others who abuse the system by not coming clean.

            Here is an example of the abuse NOT being talked about much:

            “On April 20, 2012, for example, Trudeau earned
            $20,000 for a speech he gave to Literacy for Life in Saskatoon. In the House of Commons, other MPs were debating and voting on a pension reform initiative.”

            “On Jan. 31, 2009, MPs debated and voted on changes to employment insurance benefits. There is no record Trudeau voted on that initiative or participated in the day’s proceedings. But he did give a speech that day to the Toronto-based group, The Learning Partnership, for which he was paid $10,000”

            Does CBC tells its audience ALL there is to be told? Not a chance!

          • Quack, quack, quack :)

          • Quick, Quick, Quick, Chris thinks CBC is all about objective reporting!

          • “OTTAWA — Canada Post says it doesn’t have details about what it got in
            exchange for reportedly paying $1 million over six years to the firm of a
            former Liberal cabinet minister right after he was defeated in the 1997

            You think CBC would want this investigated? Thoroughly?

  8. The title is very misleading. The cited study says “All we really know is that an expert panel made up of professionals who have a long history of providing budgeting advice to lower income families have determined that the cost of a child in Canada at the minimum adequate standard is about $3,600.”
    Note that the study actually says $3,000 is 16% less than the minimum cost needed to raise a child.

  9. I’ll point out here as well that Mr. Sarlo is lowballing this estimate unless he thinks it’s “socially acceptable” to be sleeping in the same bed as your teenage son or daughter. To suggest that there’s no increased cost due to the housing requirements of having kids.. whether you stay home and care for them or not, is simply lying.

  10. Can you raise a child on less than 3000/year, sure. You can also live on less than 20,000/year yourself, would you want to?

    If we are going to encourage people to start families with the goal of providing only for child’s essential needs, Canada is in trouble. This looks like a study that will be used to reduce social funding.

  11. I hear if you chain your children to wardrobe walls and put a sock in their mouth and feed them only once a week, you can save an extra 1000$

  12. HAHAHAHAHA! I love the Fraser Institute. Their brand of comedy never gets old.

  13. I look forward to the upcoming Fraser Institute report about how expanding businesses can survive without paying to train new employees or to build new plants and more office space.

    Why do we let them deduct those costs from their taxable income anyway?

  14. I still can’t figure out how both parents can work without daycare for their children. Do you bring them with you?

    • Some very fortunate people have parents who are able to take care of their grandchildren. Even a few days a week takes some of the burden off of families.

      It would be a struggle to feed, clothe and provide other basic needs for my 3 children on 9000$ a year. I know some families are able to be creative and make it work but even without all the extras that would be tight.

  15. It’s interesting to see a Fraser Institute report debunked in a Macleans article – usually it takes the comments section to point out the flaws. Kinda makes you wonder if there isn’t even worse stuff in the report itself!