Wow, congratulations!!! Boy or girl?
With diapers,clothes, toys,we ended up spending less than expected actually. We got most of it from baby showers.
Our biggest surprise expense was formula since we were planning on breastfeeding. However for reasons out of our control, we ended up having to supplement with formula from day 1, and the type of formula we needed was not cheap.
Is Mrs Xyz going to take the full year of mat leave? If so, you need to take into account the reduced HHI.
Other than that, you shouldn’t worry too much since you are in Canada and medical costs should be covered.
Oh, don’t forget to contribute to RESP (Registered Education Saving Plan). You can set up an account as soon as the baby is born. To get the full $500/yr from the government, you need to contribute at least $2,500/yr.