Million-dollar babies

Tamsin McMahon, Macleans

From crushing daycare fees to saving for university, the cost of having kids is reaching astonishing new heights


…. The Santiagos are only now discovering what nearly six million Canadian families with dependant children know all too well: The cost of rasing a child has hit astonishing new heights. In a society where many parents see buying a house as an important part of starting a family, the cost of housing in cities is rising into the stratosphere, pushing double-income households to the brink. Daycare costs, meanwhile, are now equal to taking on a second mortgage in some regions. ….

It shouldn’t be a shock, then, that young parents are the most financially squeezed of any families in the country. Statistics Canada estimates that couples with children account for 30 per cent of households, but more than half of all of Canada’s household debt. Two-parent families with children under the age of 24 averaged $157,000 in debt, or $33,000 more than couples without children.

By far the largest sticker shock that new parents face comes from child care costs, which run from Quebec’s subsidized $7-a-day child care centres, equal to around $140 a month, to as much as $2,000 a month in major cities.

Toronto screenwriter Trevor Finn caused a heated debate last month when he wrote in the Globe and Mail that he and his wife earned a combined six-figure income and couldn’t afford both the $1,600 a month in daycare and their small downtown condo.

The Vanier Institute of the Family says that, on average, it costs the typical Canadian family $1,000 to $1,200 a month to put a two-year-old in full-time daycare, or the equivalent to paying the principal on a $360,000 house over the life of a typical 25-year mortgage. “Child care costs are, in some cases, the same as you pay in rent,” says Nora Spinks, the institute’s CEO. “For many families, it is on the borderline of affordability.”

That’s if parents can find a daycare spot at all. It’s not uncommon for wait lists for licensed child care to stretch more than a year. The Vanier Institute estimates there are regulated child care spaces for just 22 per cent of Canadian children under the age of six. That lack of affordable options has led to a booming market for nannies and babysitters. Between 1998 and 2012, the number of people employed in child care in Canada jumped 65 per cent, from 20,800 to 34,400, compared to overall job growth of just 28 per cent for the entire economy, according to Statistics Canada data.

Wages in the sector have nearly doubled, from an average of $6.87 an hour to $11.74, growth that has outpaced both inflation and the average wage growth across Canada….

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