Cost of Raising a Child in Canada – How to Plan for Their Future


The average cost of raising a child in Canada for an average family in Canada is now a staggering $12,000 per year. Since this is just an approximate number, the cost will depend on many factors including your lifestyle, where you choose to live and where you choose to educate them, public or private. By the time your child is 18 years, you will have spent around $200,000.  And that’s before you even consider how to save for their post-secondary education,help them with the downpayment on their first home and their future and then the cost is going to get much higher. 

They say, money can’t buy happiness. But it can buy options. No money, no options, no happiness, the more money you save for your child’s future the more options in life they will have to be successful and happy. The guide below covers some of the costs you will have no choice on to care for your child and then there is a simple savings plan option where for no more than than the cost of two lattes a day you can give your child unlimited options for the future and set them up for a financially secure life full of options and happiness. 

This guide helps you to better understand, on average, how much money it will cost you before your child starts supporting themselves and provide options on how you can assist them along the way.

What is the cost of raising a child in Canada?

Let’s divide childcare expenses into several crucial stages:

  1. Maternity

The cost of raising a child starts right from maternity costs. During the first year of your baby’s life, you have to deal with the loss of income that comes with being away from work as a stay at home parent.  

The normal maternity leave in Canada is approximately 1 year, but you can take an extended leave of up to 61 weeks. If you decide to take extended leave, you will get an income replacement of 33% weekly up to $343 per week.

With maternity employment insurance, you will get an income replacement of 55% per week up to $573. 

  1. Baby expenses

After childbirth, you will need some money to buy baby items. You will need items like a crib, stroller, and car seat. These are mandatory items that will make the baby comfortable. The initial baby expenses can run to thousands of dollars because you also have to make the home safe for your baby.

Fortunately, you can save money on baby items by shopping for used items. You can also ask friends and family to donate hand me downs of baby items that they no longer use.

  1. Child living expenses

After buying the initial mandatory items for your baby, you will also need items to sustain your baby. In the first few years, they will need clothes, baby food, and diapers. These items are needed regularly and should be considered as monthly expenses, since you have to replenish them almost every month.

Based on Moneysense.ca calculations, you might be looking at spending over $50,000 on food and clothing only, before your kid becomes independent.  But, there are several ways to save money in the initial years, like using cloth diapers instead of disposable ones. You can also save money by shopping for second-hand toys and clothes.

  1. Child care and education

According to the latest figures by the Department of Finance Canada, Quebec has the lowest child care cost, at $181 a month. On the other extreme end, Toronto takes the day, with child care costs rising up to $1578 per month.  

  1. Education Savings Options

As a parent one of the very first thing you think of for their future is their education. However you begin to speak to friends and the financial institutions and are told the only option is the RESP. A Government program with government rules on where your child can go to school, what they can study and how the money you saved can be used. But now there are two options for their education. One is for education only and the other is for their education and for life.

Parents in Canada have two options. RESP (registered education savings plan) is a government program started in 1998 that provides parents with a 20% matching grant up to an annual maximum of $500 if they put in $2500. While the RESP is very popular because of the matching grants,  it comes with government rules on where your child can go to school, what they can study and how the money you saved can be used. 

Meanwhile, Child Plan, a participating whole life insurance plan is the fastest growing alternative to RESP and the only tax free savings plan parents and grandparents can open for their children and grandchildren in Canada.

Unlike the RESP which has matching grants only until your child reaches 17 and which can only be used for education and education related expenses. With Child Plan, from the day you open the plan your child or grandchild will get a tax free annual dividend for life which they have complete freedom to use for any university or college around the world without restrictions and to buy their first home or do whatever in life they will dream of.

Child Plan grows completely tax free and has no government restrictions on what your child will

want to do in the future with their plan.

This means that Child Plan offers your child limitless opportunities to achieve their life dreams. Take a look and see what your future child’s financial opportunities could look like and request a Child Plan illustration here

  1. Cost of housing

Many parents never account for shelter when it comes to the cost of raising a child, after all you have to live somewhere. If you have a child or several children, you have to make your home big and comfortable to accommodate your child.

The average cost of shelter for a single Canadian child is $2,000 per year and significantly more if you live in cities like Toronto, Vancouver or Montreal according to MoneySese.ca. This covers the cost of the extra bedroom you’ll require for the kid, plus the furniture.

How to plan for their future

Raising a child is one thing but planning for their future is another thing. You need to make sure that you have investments and savings to take care of their future such as: food cost, daycare fees, health care, and school supplies.

 Here are some ways to plan for your child’s future:

  • Start saving now

The best time to start planning for your child’s future is from the day they are born. To build wealth, you don’t need a lot of money. You need time. If you wait until they are about to join a university to start putting some money away. It’s too late.

It is possible to start saving for a child shortly after they are born. Both the RESP and Child Plan can be set up within two weeks of their birth. However, with the RESP, your ability to add more savings is capped  by two factors. The first is that there is an annual maximum and you can only contribute until your child turns 17, and which by the time they turn 35 must be emptied and closed. So what’s the purpose of a savings plan that has to be empty before they have a family of their own. 

While with the Child Plan, you can invest up to 20 years from when you open the plan and after 20 years their plan is completely funded for life! And the cash value will continue to grow during your child’s entire life. 

  • Keep your savings consistent and manageable

Saving for your child’s future is important, but you are also likely to have some other bills and savings. The trick is to keep the savings consistent but manageable.

Set an amount that will not make you feel overwhelmed so that you are able to put away money for a long time. Consistency is important when saving for your child because it increases the amount.

  • Take advantage of boosts

When planning for your child’s future, remember to take advantage of government boosts to increase your savings. There is the Registered Education Savings Plan (RESP) if you are saving for your child’s education. 

And if you want more than just saving for your kid’s education, Child Plan comes in handy. It is an excellent alternative to RESP that helps you plan more than just education for your kid. 

With these options, you will always receive a grant each year to increase your savings.

  • Giving your children inheritance

Apart from saving money for your children, one of the ways to plan for their future is by giving them some inheritance. You can do that by putting some money in a trust with specific instructions.

Setting aside some money in a trust should be done with the help of a lawyer so that they can guide you on how to do it correctly. The money that you put in the trust will help them in the future for different needs.

  • Always prepare

It is important to always prepare for challenges that are likely to occur in the future. For instance, you can take a life policy that will take care of your children in case you die while they are still minors. 

Preparing for such a scenario will ensure that your kids are protected at all times. According to Angus Reid Institute Poll, only 51% of parents have a last will and testament. 

You can also select custodians to take care of your children in case you are not able to do it for whatever reason. Prioritizing your kids’ interests is a big part of planning for their future.

Key Takeaway

The cost of raising kids in Canada can be high for most people. However, proper planning and implementing some saving strategies can make it manageable.

The more options your child has in life, the happier they will be. The more money you save for their future, the more options they will have. It’s that simple. 

When you hold your child today, can you imagine how happy they will be at 20 years old when you tell them you opened an investment for their future when they were little and it’s now worth over $80,000? And if they manage it right, their investment will have over $180,000 when they’re 35 and want to buy their first home. 

You can begin to take pride in the future you’re preparing for your child, and give them what they deserve with all their savings. 

Request for a personalized Child Plan illustration, and get a customized saving plan for your kid to help secure them a brighter future.

Sample Child Plan™ Cash and Insurance Value Illustration

Based on a Monthly Deposit of $250 per month

Age Accumulated Cash Value Life Insurance Value


$82,568 (Education)



$177,953 (House)



$303,299 (Security)



$834,276 (Retirement)


Sample illustration is for a child under age 1 based on a monthly deposit of $250 for twenty years. There will be no further contributions required after year twenty. The cash and insurance values are based on a dividend interest rate of 6% from a Canadian life insurance company.

Personalize Your Child Plan™

Request a Child Plan™ Illustration and see how much cash value your child will have for their education and for life.

*illustrations are reflective of the annual premium amount

To learn more how Child Plan™ will provide your child with the funds for their future education and financial security for life, book a virtual meeting with a Child Plan™ Advisor.