Whether by choice, relationship breakdown, or widowhood, one in five millennial families are lone-parent households. And while much of the stigma of single parenting is waning, the economics of it have never been more concerning.
An August, 2018 report from anti-poverty think tank Maytree found that almost 30 per cent of people in lone parent households live in poverty, compared with 11 per cent of the general population. The poverty rate for lone parents is four times that of couples with children.
Skyrocketing costs of shelter, child care, transportation and everything else have hit all Canadians hard, but single parents have the fewest financial resources to absorb rising prices. Consider that in the almost four years since the Maytree report came out, the pandemic has helped propel Canada’s house prices 63-per-cent higher than they were in 2018 and inflation is up to 5.7 per cent.
By now we know that the pandemic has disproportionately hurt women, who left the labour force in droves to be the primary caregivers of children when schools and daycares closed. The pandemic also caused a spike in breakups and divorces, which means a rise in single parents.
While the number of lone parent households headed by fathers is rising, they still only represent about 9 per cent of the total. The vast majority of lone parent households are headed by women, who still earn less than men.
Supporting single parents is a predominantly feminist issue and forces a deeper conversation about the consequences of failing to close the gender wage and wealth gaps. If Canadian women have fewer financial resources, the result is an increasing number of Canadian children will grow up in poverty.
Nothing is fair if the Canadian dream only works for two-parent households. Besides, with Canada’s fertility rate at an all-time low of 1.4 live births per woman in 2020, we can’t afford to economically penalize anyone who wants to parent alone. If we want our population to continue to grow and our country to thrive, we need more people to be able to afford having children.
The greatest financial challenges faced by lone-parent households are the costs of child care and shelter. For obvious reasons, lone parent households are more likely than couples to use child care even if it is more difficult for them to afford it.
While the rollout of the Liberal government’s $10 a day child care plan will be a boon to household budgets, the plan will take years to fully implement and only targets reducing fees for children under age 6. For most parents, the annual cost of child care for one child still rivals domestic tuition fees at any Canadian postsecondary institution.
But why not make day care fees for lone parent households half of that $10 a day cost, since they have no partner with whom to share the bill or someone to share child-rearing duties?
Another solution would be to increase the Canada Child Benefit (CCB) for lone parent households, doubling or even tripling the benefit. Because this monthly tax-free cash benefit can be spent at the parent’s discretion, it could help with major bills, like shelter, that single parents have to carry alone.
The average house price in Canada is too high for most single parents to even hope to ever have a shot at home ownership, but additional cash can at least help them manage increasing rents.
The Canada Education Savings Grant (CESG) should also be doubled for children of lone parent households, or better yet, increase the Canada Learning Bond (CLB), by a few multiples. These are grants deposited to the registered education savings plan to help parents pay for a child’s postsecondary education.
Single parents already find their smaller incomes stretched to cover essential expenses, leaving nothing left over for saving so they need all the help they can get. If we want to break a family cycle of poverty, a postsecondary education is still one of the best ways to do so.
When it comes to supporting families in Canada, the focus should be on getting resources to lone parent households first, because they are the ones who need it most.
Bridget Casey, MBA (Finance), is founder of Money After Graduation, a financial eLearning company. You can follow her on Instagram & Twitter at @BridgieCasey
Bridget Casey