It seems that in Canada tough family finances are getting in the way of people having more children, even though they would actually like to do so. This needs to change if we are to overcome the problem of population aging.
A recent study performed by the Institute of Marriage and Family Canada (IMFC) has found that, like in so many countries, population aging, not overpopulation, is the real problem. According to the study, in 2010 Canada needed 109,000 more babies to reach the replacement rate and that, altogether, 1,022,971 more babies would have been needed since 2002 to do so. It is well recognised that inverted pyramid type numbers like these will cause economic problems when the baby boomers begin to retire.
What is most interesting, however, is that Canadians would actually like to have more children – so there is the potential for change. The World Values Survey found that the mean ideal number of children for Canadian families was 2.7, compared to the 1.63 they are currently having (the replacement rate is 2.1). Apparently finances, delayed childbirth, and changing ‘family mores’ all get in the way.
It is true that the expectations for what you need to be a good parent are high. This has been fuelled in part by many people choosing to have children when they are older and have more ‘stuff’ – so then others feel that they also need that ‘stuff’ before they have children. It doesn’t help that the cost of housing, education and food are high in many countries. Do people need to rid themselves of the idea that a spacious family home and neatly decorated and decked out baby room are necessary before having a baby? Sadly, perhaps they do.
The study suggests that family taxation is one good solution for Canada which would allow families to achieve more of their financial goals and, hence, have the amount of children they would like to. It also suggests that such a policy is fairer, given that proportionally families with only one working member pay a much higher proportion of tax on their income than double income families:
Governments need to step back and allow for family freedom. They can do this by leveling the playing field between families and individuals. For example, the government has long discussed but also long delayed the idea of family taxation, which would lower a family’s taxes by allowing income sharing. Currently, two families earning the same amount are not taxed the same, depending on whether the family has one or two earners. The two-earner family pays fewer taxes.
…Wise preparation for the future involves grappling with the idea that we may just have too few children to keep the status quo, particularly with regards to public benefits.
The idea of making things financially easier for families is not an original one, and is in line with author and journalist, Jonathan Last’s, ideas which were recently discussed on this blog here. The idea of income splitting has also been mooted many times here in New Zealand but never actually introduced. I tend to agree with it – especially because stay at home mums offer vital services to the community like sports coaching, helping on school trips, other such volunteer work and most importantly bringing up well adjusted citizens for our future society.