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Every year, hundreds of thousands of newcomers arrive to Canada, many of them with family in tow—to start a new life in a new country.
Newcomer families, (like all families) often spend the bulk of their income on child-related expenses; and so, the question of what expenses to expect in Canada can be an important one.
A recent study by Statistics Canada offers great insight into the matter. The study broke down families by income level and family size.
By income families were sorted into three categories:
- Low-income: lower than $83,013 CAD annually*.
- Middle-income: $83,013—$137,790 CAD annually; and
- Higher income: Over $137,790 CAD annually.
And by family size, family groups were sorted into single, two, and three child households); and into single parent and two-parent families.
*Note that these figures, in addition to any other in this article, are given in-terms of 2017 constant dollars.
How much do families spend on their children?
Among families with two parents, families spent the following amounts on each child from 0-17 years of age:
- Low-income: $238,190 CAD;
- Middle-income: $293,000 CAD; and
- Higher income: $403,910 CAD.
When compared to data from the same family groups, that took into account children living at home from age 0-22, families spent the following amounts:
- Low-income: $308,710 CAD;
- Middle-income: $378,900 CAD; and
- Higher income: $521,270 CAD.
This comparison helps show the drastic increase that an extra 5 years can have in expenses as children grow older in Canada. In fact, a general finding of the study (across all income groups, and family sizes) is that if children aged 18-22 were still living at home, total expenditures per child increased between $68,000-$117,000 CAD per child—much of which may be due to post-secondary tuition fees. This number becomes more relevant when considering that (according to a 2017 survey) 90% of adults aged 18-19 and 68% of children aged 20-24 live at home.
What child-related expenses cost the most?
According to the study, the total amount of expenditure per child (in a two-child household) broke down into:
- Housing: 29% of total expenses;
- Transportation: 20% of total expenses;
- Food: 17%;
- Childcare and education: 14%;
- Miscellaneous: 10%;
- Clothing: 7%; and
- Healthcare: 4%.
Does this change with the number of children?
As one would expect, these findings did vary by the size of families as well. For example, the total expenses for children (between ages 0-17) from single-child houses were as follows:
- Low-income: $290,580 CAD;
- Middle-income: $373,500 CAD; and
- Higher income: $545,580 CAD.
These numbers are considerably higher than comparable numbers from two child households. This logic would hold, since with fewer children to take care of, parents in single child households are free to spend more of their income on one child. Similarly, expenditure numbers per child from three-children households were lower at every income bracket than numbers from two-children households (and significantly lower than expenditure in single-child families).
In fact, the study found that expenditure per child was 20-38% higher in a one-child family when compared to a two-child household. Further, three-children families spent 8-15% lower per child than their two children counterparts.
Does this change by region?
The study also observed regional variations in child-related expenditure.
Parents in the prairie and western provinces (Manitoba, Saskatchewan, Alberta, and British Columbia) had the highest expenditures for children—roughly 8-15% higher than parents in Canada’s Atlantic provinces (Newfoundland and Labrador, Prince Edward Island, Nova Scotia, and New Brunswick). In addition, parents in central provinces (Ontario and Quebec) were in the middle, seeing child expenses that were approximately 5-9% higher than those in the Atlantic provinces.
The study findings support the idea that cost of living is among the lowest in Canada within the Atlantic provinces.
Do these findings change with the number of parents in a household?
Finally, the study found some differences in child expenses between single and two-parent households.
At the low-income end (among families with one, two and three children) expenses were largely on par between one and two parent households—however this was less the case as the number of children increases in a family: one-child families spent much the same amount per child regardless of number of parents but differed much more in three-child households—where two parent families spent noticeably more per child.
Interestingly, once families entered the middle-income bracket, single parent households outspent two-family households per child by a significant amount (regardless of the number of children).
What does this all mean?
Taking the findings of the study as a whole, we can see that child expenditure in Canada between the ages of 0-17 and further 18-22 can greatly vary based not just on where a family resides, but also the number of parents and children in each family.
We can also infer that these expenses increase substantially after the age of 17, and that Atlantic provinces seem to be the best for childcare expenses, due to suspected lower cost of living.
However, the study does have notable limitations that should be considered. First, was the relatively small sample size that may have skewed results—as income data was taken and pooled from the Survey of Household Spending (SHS), which traditionally does not get many respondents.
Second was the fact that the survey only reported income at the household level and did not distinguish between child and parent income—something that could seriously skew results for children above the age of 18 who still lived at home; as it does not distinguish between their parents expenditure on them, and the child’s spending on themselves.
Lastly was the reference period of the study data (2014-2017), which already may have limited applicability already. Still the study is the first of its kind, and an important data point for newcomer families to reference.
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