Author: Devin Drover, Canadian Taxpayers Federation
Carney has been bragging that the Canada Child Benefit went up in July. Parents can now get up to $8,157 a year per child. The prime minister says that’s more money to help with the costs of raising a family.
Here’s the part he skipped. Ottawa taxes a slice of that money right back every time parents spend it on their kids. The child benefit is tax-free until mom and dad hit the checkout.
If the government thinks raising kids costs too much, a simpler idea is to stop taxing the things kids need.
The goods and services tax adds five per cent to almost everything parents buy for their kids. When they spend $300 on a car seat, Ottawa takes $15. Or when they spend $120 on winter boots and a snowsuit, it takes $6.
Kids outgrow boots, snowsuits and sneakers faster than parents can pay for them, yet Ottawa takes a cut every time.
And Ottawa knows this tax hurts.
The federal government took the GST off children’s clothing, footwear, diapers and car seats previously during its holiday tax break, from December 2024 to February 2025. Then it put the tax back. If taking the tax off kids’ essentials made sense for two months, it makes sense for good.
The provinces are ahead of Ottawa here. Ontario takes its share of the HST off children’s clothing, footwear, diapers, car seats and booster seats right at the till. Nova Scotia and Prince Edward Island give parents the same break on kids’ clothing and footwear. Ottawa keeps taxing all of it, in every province.
So why does this matter?
Let’s start in the maternity ward. Canada’s fertility rate sat at an all-time low of 1.26 children per woman in 2025, according to Statistics Canada. The country needs about 2.1 to hold its population steady. We’re not even close.
And if you ask young couples why they’re not having kids or why they’re stopping at one, the answer is money. Sixty-five per cent of Canadians say they’re choosing to have smaller families because of financial concerns.
Yet while the cradles sit empty, the country keeps getting older.
One in five Canadians is now 65 or older. Children under 15 make up 15 per cent of the population. For every three kids in this country, there are four seniors. The population pyramid is flipping upside down, becoming wide at the top and narrow at the bottom.
An upside-down pyramid is an expensive thing.
Health care costs $14,042 a year for the average senior compared to $3,818 for a Canadian of working age. Ottawa already sends the provinces $54.7 billion a year through the Canada Health Transfer, and that bill is set to hit $57.4 billion next year. Governments should always be fighting to get health spending under control. But even the leanest system costs more as the country gets older, and every one of those dollars will come from a shrinking pool of working-age taxpayers.
Taking the GST off children’s essentials won’t fix the country’s demographics by itself. Nobody has a baby to save five per cent on a car seat. But making it more affordable to raise a family is a good start. It tells young families the government is on their side instead of in their wallets.
Carney says the child benefit gives parents more money to help with the costs of raising a family. The cheapest way to help is to stop taxing those costs. Take the sales tax off kids’ essentials and let parents keep more of their own money.
Devin Drover is Atlantic Director and General Counsel at the Canadian Taxpayers Federation.
no way he can do that this country is drowning in debt , the printing presses are over loaded printing money , he needs more tax dollas to pay for his elitist ways
Housing costs, that's the expense that takes it all. And the solution is deportations, reduce Canada's population. Foreigners (not immigrants!), are suffocating our cities.