Canada’s total fertility rate hit a record low of 1.26 in 2023. This is well below the replacement level of 2.1, which is the average number of children per woman needed to sustain a population without immigration.
Demographers are divided over whether this matters, and if so, how much. But even if one is generally non-plussed about the demographic implications of Canada’s declining fertility rate, there is a good reason why a new government should be concerned with it: half of Canadian women are not having as many children as they say they would like to have.
Lyman Stone, demographer and author of the Cardus report “She’s (Not) Having a Baby: Why Half of Canadian Women Are Falling Short of Their Fertility Desires” put it this way in an interview with The Hub: “every other Canadian woman in her 40s is missing a child she wanted.”
This represents an entry point for public policy. It’s well-accepted for government to help close the gap between the population’s preferences and actual outcomes using different policy instruments like cash transfers, tax subsidies, or other regulations.
So what might a government do? It can start by acknowledging that when half of Canadian women indicate they wish to have more kids than they currently do, fertility is a mainstream concern. Simply acknowledging openly that Canadians are struggling to achieve the family life they say they want would improve the situation.
Then there are some practical steps that governments can reasonably take to support women and their families. The same report cited above asked women who said they wish to have children why they would not have them in the next two years. The top five reasons they gave were as follows: wanting to grow as a person, wanting to save money, focusing on career, the belief that kids require intense care, and having no suitable partner.
If we categorize these concerns, at least one is economic. Improving financial security would improve the likelihood that Canadians feel secure enough to start families. The federal government has plenty of jurisdiction to boost the economy. Low and stable inflation is a starting point. We were reminded during the pandemic that high government spending can cause inflation to rise. The flip side is also true: controlled public spending can contribute to a low-inflation environment.
Boosting the economy also depends on keeping taxes low and generally getting out of the way to allow small businesses and entrepreneurs to flourish. The same goes for helping young families purchase affordable homes or save for the future.
Another policy area affecting fertility decisions is the length of time schooling takes, and the expectations of advanced degrees, which, for far too many, do not result in advanced work opportunities. It is frustrating to spend years in school just to end up in the service industry where no degree is required, for example. Canadian policymakers should speed up the recognition of credentials from overseas. They also create new educational pathways that enable options besides four-year degrees. Spending years in expensive (and often unproductive) schooling can conflict with the unfolding of women’s fertility timelines.
Another reason given for delaying children is the inability to find a suitable partner. Canadians are marrying later, if at all. And this is connected with lower fertility, since stability with a partner is still a typical step for many people before having kids. Governments can’t (and shouldn’t) play matchmaker, of course. However, there are aspects of partnership and marriage that government needs to support. Where marriage penalties exist, for example, governments should eliminate them. Marriage penalties occur when individuals lose benefits or are financially disadvantaged by entering a partnership or marriage. This concern has come up recently around disability benefits.
In discussions of raising fertility, many turn to family policies like parental leave and child care as a solution. But in our survey, while lack of paid leave or lack of access to affordable child care were present, they were not in the top ten. There are really good and important reasons to reform parental leave. That said, it’s not a slam dunk that in doing so, we would see an immediate uptick in fertility. Canada has, in contrast with the United States, generous leave policy, and yet we still have a lower fertility rate.
Likewise, yes, we should fix the current disastrous approach to childcare policy. Yet the primary reason is not to increase fertility, but rather simple equity: the current policy serves at best 30 percent of Canadian families at great and growing cost, where we could certainly have a lower taxpayer bill that would help every family. Other misbegotten solutions include things like government funding of IVF. This is a poor choice because the cost is enormous and the success rates low, especially for the very demographic of older women most likely to want to use it.
And so that leads to a final point, which is to recognize the limitations of government. Intrusive measures could—and have, in the past—led to terrible abuse. What leaders should prioritize is a government that views family policy as important, but pursues family policy in reasonable, minimalistic ways that respond to the desires of its citizens. In the case of fertility, this does mean taking some steps toward ensuring those who want to have children can achieve this normal, laudable goal.
