Prenatal care and birth expenses

If we’re going to compare the cost of having and raising children, we might as well start at the beginning. What can come as a shock to expecting parents, or those planning to start a family, are the costs of pregnancy and childbirth. From medical expenses to maternity clothes, your offspring start making demands on your bank account in utero.

In Canada, most maternal care and childbirth expenses are covered by the public healthcare system. This includes all routine prenatal care visits and ultrasounds, as well as medical care during and after the birth. However, extra services such as childbirth classes, doula care, or a lactation consultant will have to be paid out of pocket.

When I had my baby, I chose a home birth with midwives. Thankfully, I got to make my decision without any financial considerations. Whether you choose a home or hospital birth in Canada, the cost for either is $0. It’s true that in the throes of labor you’re unlikely to worry about the price tag for anything, but I imagine getting a bill for expenses incurred on your baby’s birth does put a slight damper on the day.

South of the border, American women don’t enjoy subsidized healthcare. In the US, a vaginal birth without complications costs around $11,000(sans insurance), whereas a cesarean with complications can cost over $21,000. If your baby needs any additional care, or is born prematurely, expect to pay more. How much parents are responsible for paying out of pocket depends on their insurance coverage and terms, but they should expect to pay a couple thousand dollars no matter what to meet their copay or deductible, and save accordingly.

(*note that for the purposes of this article, costs in Canada are listed as CAD and costs in the US as USD)

Government subsidies and grants

In Canada, families are entitled to the Canada Child Benefit, which is a tax-free monthly disbursement to families to help with the costs of raising a child. Depending on a family’s annual net household income, they can receive up to $6,400 per year for each eligible child under the age of six, and up to $5,400 per year for each eligible child aged 6 to 17. Canadians can also claim children as dependents, as well as deduct childcare expenses to reduce their taxes.

While the US government will provide refundable tax credits like the child tax credit, this amounts to a maximum of only $1,000 per year and begins to phase out for families earning more than $110,000 per year. Likewise, Americans can only claim a maximum of $6,000 in childcare expenses when they file their taxes.

Maternity & parental leave

Canada has one of the most generous parental leave systems in the developed world, giving parents up to 18 months of partly-subsidized leave following the birth or adoption of a new baby. Maternity and parental leave is government sponsored up to 55% of your salary for 12 months, or 33% of your salary for 18 months. Mothers are entitled to 15 weeks of paid maternity leave, then the remaining 35 or 61 of paid parental leave can be taken by one parent or shared by both. Although rare, some employers even make up the difference so you’ll receive your entire paycheque while on leave.

Alternatively, maternity and parental leave in the USA is among the worst of the developed world. How much leave you can take depends on what state you live in and what company you work for. The Federal Family and Medical Leave Act mandates 12 weeks of unpaid leave after having a baby. However, this only applies to women working for a company with 50 employees or more, which means employees of small businesses are not entitled to any leave. While some employers do offer paid parental leave, it is uncommon and usually very short.

The high costs of childcare

The out-of-pocket cost of childcare in Canada can vary substantially depending on what province and city you live in. In Quebec, the average is only $164 per month, but in Toronto it’s $1,375. For many cities, the average hovers around $1,000 per month, or about $12,000 per year. For each child ages 1-5 the average Canadian family will spend approximately $48,000 on childcare.

In the USA, childcare isn’t much cheaper. The average daycare costs $10,468 per year, only 15% lower than that in Canada. However, because American parents aren’t entitled to any paid long-term leave, they start paying this expense a lot sooner. Daycare costs from age 3 months to age 5 will cost an American family $50,000. This is more overall than Canadian families pay during the same time period, despite a lower monthly cost.

Health insurance

Canada operates under a public health system, so most families do not see a dramatic increase in spending on healthcare. However, adding another person to the family can add up in out-of-pocket prescriptions, dental, and vision costs. To manage these expenses, many families purchase private health insurance to help cover whatever is not paid for by the government system. When I added my daughter to my private health insurance plan, it only cost me an extra $20 each month.

In the US, health insurance is a hefty out of pocket cost, which only goes up when you have a family. The good news is that while adding one child to your coverage can as much as double your premiums, any subsequent children won’t increase the cost further, because most insurers offer plans that cover either “single” or “family.” Healthcare accounts for 9% of the total child-related expenses paid by American families, and less than 2% for Canadian families.

Having a child is expensive no matter where you live, but it’s far cheaper in Canada

Overall, Canadians pay less out of pocket to have their babies and raise them to age 18. Thanks to paid parental leave, government subsidies, generous tax deductions, and free healthcare, families enjoy more financial security and support in Canada than they do in the States.

Bridget Casey is the award-winning entrepreneur behind Money After Graduation, a Canadian financial literacy website aimed at 20 and 30-somethings. She holds a BSc. from the University of Alberta, and an MBA in Finance from the University of Calgary. She has been featured as a millennial financial expert by Yahoo! Finance, TIME Magazine, Business Insider, CBC and BNN. Bridget was recognized as one of Alberta's Top Young Innovators in 2016.

Explore the latest articles

Best staycation ideas to save you money

With a tight budget, why not vacation at home? Here are 10 staycation ideas in Canada that will also save money.

Amanda Lee Freelance Contributor


The content provided on is information to help users become financially literate. It is neither tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter.