The cost-of-living crisis facing younger Canadians is showing no sign of fading
Rising costs and economic uncertainty are forcing many young Canadians to rethink family planning, according to BMO Financial Group’s latest Real Financial Progress Index. The survey found that 70% of Gen Z and 69% of Millennials want children but fear starting a family could undermine their financial security.
While 81% of Canadians say parenting brings joy and fulfilment, more than half (53%) of parents report that having children compromised their financial stability.
Financial stability emerged as the leading consideration (44%) in deciding whether to have children, followed by finding the right partner (34%), the ability to be fully present for children (27%), health (24%) and career prospects (17%). More than one-third (35%) of respondents would reconsider their decision not to have children if finances were less of a concern.
The survey also found that aspiring parents typically want two children, though that figure rises to three if financial constraints are removed.
Nearly nine-in-10 respondents (89%) said balancing the emotional and financial demands of parenting is challenging, with 55% often feeling overwhelmed by their family’s financial responsibilities. Pressure to “keep up” with other families was acknowledged by 76% of parents, while 86% said childcare and school-related expenses hurt their ability to save for long-term goals such as homeownership and post-secondary education.
“For many Canadians, starting and raising a family is one of life’s most meaningful journeys, but it can also bring significant financial and emotional pressures,” said BMO’s head of everyday banking, segment and customer growth Gayle Ramsay. She encouraged families to engage in ongoing financial discussions and develop long-term plans with the help of professional advice.
The index reported that 84% of Canadians feel child-rearing costs have become unmanageable. Parents cited groceries (39%), recreational activities (37%), and childcare (31%) as the most unexpectedly high expenses. Many Canadians also plan to support their children into adulthood, with the average respondent believing such support should last 19 years.
BMO Economics noted that while high unemployment and falling home prices in parts of Ontario and British Columbia have hurt household sentiment, recent declines in interest rates and borrowing costs have eased debt burdens.
According to analysts, financial stress could improve further if trade negotiations with the US succeed and the Bank of Canada proceeds with anticipated policy easing this fall.
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