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Raising children costs less than people believe, Fraser study says

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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-$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-$15,000 range — with the total bill for raising a child to age 18 at more than $200,000.

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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.

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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.

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