education plan canada

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Registered Education Savings Plan: How RESPs Work in Canada

Post-secondary education can be expensive, which is why many Canadians start a registered education savings plan (RESP) to cover the costs. Starting to save early helps give them a head start on paying for university, college or skills-training programs. RESPs have a lifetime contribution limit of $50,000 per beneficiary.

What is an RESP?

An RESP is a long-term investment strategy designed to let family members and friends help pay for a child’s education. An RESP has three main participants:

• The subscriber: The person who opens the RESP and makes contributions. It can be an individual, a child’s parent or a caregiver.
• The promoter: The financial institution where the RESP is held and which will pay out the funds when the individual or child attends post-secondary education.
• The beneficiary: The person who is named on the RESP and will eventually receive the funds. They must have a Social Insurance Number (SIN) and be a resident of Canada.

Investments in an RESP will grow tax-free, and may even qualify for government contributions like the Canada Education Savings Grant (CESG) and Canada Learning Bond (CLB) — free money toward the child’s education costs. Eligible beneficiaries will receive CESG of up to $7,200 and CLB of up to $2,000 as a lifetime maximum. Several provinces, including British Columbia and Quebec, also offer incentives.

How does an RESP work? 

For this long-term strategy to work, the subscriber will need to open an RESP and make contributions to the account as the beneficiary grows up. Once the beneficiary enrolls in a qualifying post-secondary program at a recognized educational facility, the promoter will distribute the funds and interest earned to the beneficiary to help finance their education. 

An RESP can be open for up to 35 years (technically, until the last day of the 35th year after the year in which it was established). For example, an RESP opened in June 2000 must terminate by December 2035. This timing means the beneficiary doesn’t have to go straight from high school into university or another education program. However, it is critical that you select the right type of RESP that matches your specific goals.

Types of RESP options

There are three types of RESPs available, and the right one for you depends on your family’s structure and needs.

Family RESP

This type of RESP is best for families with more than one child, as you can name more than one beneficiary of the plan, and any beneficiary can use the funds. However, the family plan requires that beneficiaries be your children, stepchildren, grandchildren or siblings, related to you by blood or by adoption. 

Since you’re not considered a blood relative of yourself, you cannot open this type of RESP for yourself.

Individual RESP

Only one beneficiary can be named under an individual plan. However, the advantage of an individual RESP is that anyone can open one — you don’t have to be related to the beneficiary. So for example, you could open this type of RESP for your niece or for a family friend’s child. 

You can even open this individual plan for yourself or another adult.

Group RESPs, sometimes known as a group scholarship trust, pool contributions from multiple families. Those funds are then invested in low-risk products, like guaranteed investment certificates (GICs) , to grow tax-free. The pooled fund is later divided and distributed among the contributors as annual payments during the first four years of post-secondary school. 

Group RESPs are more restrictive and have higher fees and stricter payment schedules than other types of RESPs. Each group plan can only name one child as the beneficiary, but they do not need to be related to you.

RESP pros and cons

• Depending on the type of RESP, family members and friends can contribute savings for a child’s future education.
• Contributors can choose from different plans to match their goals and preferences.
• Investments in the RESP account grow tax-free.
• RESPs can remain open for up to 35 years.
• The RESP may qualify for government contributions, such as CESG and CLB.
• Unlike registered retirement savings plan (RRSP) contributions, RESP contributions are not tax deductible. 
• Students may have to pay income tax on payments from the RESP.
• If total contributions exceed the lifetime limit of $50,000, each subscriber must pay a 1% tax on their share of the excess contribution each month until the extra money is withdrawn.
• If the RESP is not used or is transferred to a sibling over age 20, you may lose the CESG and CLB amounts. 
• Certain RESPs are more restrictive, have higher fees and strict payment schedules than other types of RESP plans.

How to open an RESP

Opening an RESP is incredibly easy. You will need to have the SIN number of the person you plan to name as the beneficiary. Then simply visit your preferred financial institution, like your bank or credit union , to open the account. You may also be able to open the account online. The provider will also be able to help you with the CESG or CLB.

RESP contribution limit

RESP contribution rules may vary depending on your provider. There is no limit to the amount you can contribute per year, but there is a lifetime limit of $50,000 for all RESPs for a beneficiary. This is especially important to keep in mind if there are multiple RESPs open under your child’s name and SIN. 

If you over-contribute, you’ll be penalized with a 1% tax on the excess contribution, which will be charged each month until the extra money is withdrawn.

Contribution schedules may vary across different RESP providers. Some providers will request that you follow a specific schedule, while others will let you contribute whenever you want.

RESP withdrawal rules

To withdraw money from an RESP, you’ll have to get in touch with the RESP provider. They will ask to see official proof that the beneficiary is enrolled in a full-time or part-time program at a recognized post-secondary institution. Once this is confirmed, they will issue the funds, which are referred to as the Educational Assistance Payment (EAP).

You may also be asked to show receipts for school purchases to prove that the money is being used as intended. Reasonable expenses include tuition, books, lab supplies, transportation and other related costs.

» MORE: How to set up a student bank account

What happens to an RESP if it’s not used?

Should the beneficiary choose not to pursue post-secondary education right after high school, there are a few options.

Leave the account as-is

Most students graduate from high school at the age of 18, but an RESP in their name can stay open for up to 35 years. If the beneficiary chooses not to continue their education right away, they may decide to go back to school after a few years. Make sure you check the rules of your RESP plan for any other conditions, but in general, you can simply leave the plan alone.

Change the beneficiary

This option depends on the rules of your agreement with the RESP provider and the type of plan you chose. You may be able to change the name of the beneficiary on individual and group plans. For family plans, you likely already have multiple beneficiaries, so if one child decides not to pursue post-secondary education, another child can use the funds.

Transfer the RESP funds to your RRSP or RDSP

As long as the plan allows it, you can potentially transfer up to $50,000 of earnings and contributions tax-free from an RESP to your RRSP .

To qualify, the RESP must be at least 10 years old, and all beneficiaries must be at least 21 years old and not continuing their education. You must have an RRSP contribution room to accommodate this transfer. This process can be complex, so it’s worth seeking help from a financial advisor.

RESP earnings also may be transferred to a r egistered disability savings plan (RDSP) if the RESP beneficiary has a severe and prolonged mental impairment that would prevent them from continuing their education.

You also may qualify for this option if the RESP has been open for 35 years, or if it has been open for 10 years, the beneficiaries are all over 21, and none are pursuing further education. This option has more requirements than an RRSP transfer , so make sure to first review the government’s RDSP Bulletin No. 4R2 and talk to your provider.

Close the RESP

You can close an RESP if the beneficiary is 21 years or older and not continuing post-secondary education, and the account has been open for at least 10 years. If you close the account, your contributions are yours to keep. You don’t have to pay tax on any contributions, though you will pay tax on the earnings. Any grants and bonds from the government must be returned, since that money can only be used for educational expenses.

Frequently asked questions about RESPs

Anyone can open and contribute to an individual or group RESP for a child. To contribute to a family RESP, you must be the child’s parent, step-parent or grandparent.

RESP contributions are not tax deductible. The money is tax-sheltered in the account but is taxed when it’s withdrawn by the student to pay for their education. However, students usually find themselves in one of the lower income brackets so this money is usually tax-free or taxed at a low rate.

Technically, you could. But, there’s no good way to transfer money from an RRSP to an RESP. To do so, you would withdraw the funds from your RRSP, at which point you’d pay a withholding tax, you’d be taxed on that income, and you would lose that contribution room, not to mention the money’s potential future growth. Raiding your retirement savings to pay for a child’s education expenses may incur more losses than other potential options.

About the Authors

Siddhi Bagwe is a content management specialist at NerdWallet Canada. Treating content marketing as an educational medium for readers, Siddhi believes in empowering them with the knowledge of personal finance…

Hannah Logan is a freelance writer and blogger who specializes in personal finance and travel. You can follow her personal travel blog EatSleepBreatheTravel.com or find her on Instagram @hannahlogan21.

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The Registered Disability Savings Plan (RDSP) helps those with disabilities create long-term savings. The government matches contributions and gives up to $20,000 to qualifying low-income plan beneficiaries.

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Registered Education Savings Plans (RESP)

An RESP is one of the easiest and best ways to save for your child’s future.

Why invest your money in an RESP?

RESPs help parents, grandparents, family, and friends save towards a child's future post-secondary education. We offer Individual and family plan RESPs and can help you choose the plan that works best for you.

What is an RESP?

An RESP is an investment account geared towards saving for a child’s education. It allows investments inside the account to grow tax free. Federal government incentives, such as the Canada Education Savings Grant (CESG), are also available. Here are some tips on how to save for your child’s education with an RESP .

Types of RESPs that Scotiabank offers

Our individual and family plans give you a range of options, whether you intend on naming one beneficiary or many. 

What are the contribution limits?

There is a lifetime contribution limit of $50,000 that you can contribute to an RESP for up to 31 years. The plan can remain open for a maximum of 35 years. 

Is this Registered Plan right for you?

Right for you if you:

• Need an account to save on a tax deferred basis for a child’s education
• Want to have funds in a RESP that are eligible for Canadian Government and/or select provincial grants/bonds
• Expect to have room to contribute within the yearly limit set by the Canadian Government

May not be right for you if you:

• Do not have available RESP contribution room for the child 

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Scotiabank Investment Companion Booklet N/A | pdf : 883 KB

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The Scotiabank Savings Accelerator Account may be opened within the following registered investment accounts - TFSA, RRSP, RESP, RRIF and RDSP.

The bonus interest rate (The “Bonus Rate”) applies to New Deposits (defined below) made into an eligible Scotiabank Savings Accelerator Account (“SSAA”) between February 1, 2024 and May 31, 2024 (the “Bonus Rate Period”). Eligible SSAAs include only those held within a First Home Savings Account (FHSA) at either The Bank of Nova Scotia or Scotia Securities Inc. (together, “Scotiabank”). SSAAs held within a TFSA, RRSP, RRIF, LIF, Registered Locked-In RSP, RESP, RDSP or any other registered plan or non-registered account at Scotiabank are not eligible for this Bonus Rate offer.  

During the Bonus Rate Period, the Bonus Rate of 4.35% will be earned only on that portion of the SSAA Daily Balance that is greater than the SSAA Daily Balance as of January 31, 2024 (“New Deposits”).   The “SSAA Daily Balance” means, with respect to any particular day, the closing balance in the eligible SSAA. In addition, New Deposits will continue to earn interest at the posted annual interest rate for the SSAA  ( click here for current rates). 

The Bonus Rate will cease to apply as of June 1, 2024. The bonus interest earned during the Bonus Rate Period will be calculated daily and paid monthly or within up to 90 days after Bonus Rate Period ends. All interest rates described here in are annual rates. 

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All other terms and conditions of the SSAA continue to apply, refer to https://www.scotiabank.com/ca/en/personal/bank-accounts/savings-accounts/savings-accelerator-account.html  for details, including calculation of interest.  

By accepting this offer, you consent to receive messages from Scotiabank via e-mail, Scotia OnLine and/or the Scotiabank Mobile Banking App so that we can send you important notices regarding your account or this offer. Should you ever need to change your email address, you can update it by calling us or going into a branch.

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Scotia Securities Inc. is a mutual fund dealer and is a corporate entity, separate from, although wholly-owned by, The Bank of Nova Scotia ("Scotiabank"). ScotiaFunds are managed by 1832 Asset Management L.P. and are available from Scotia Securities Inc. 1832 Asset Management L.P. is a limited partnership the general partner of which is wholly-owned by Scotiabank. Scotia Smart Investor is a trade name of Scotia Securities Inc. 

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What is an RESP?

A  Registered Education Savings Plan (RESP)  is a government-registered savings plan that helps you save for your child’s post-secondary education. The money that you invest in an RESP grows tax-deferred, and the federal government helps contribute to your savings along the way in the form of education grants. When your child enrols at a qualifying post-secondary institution and you are ready to withdraw the funds for educational purposes, the payments made using these funds are known as Educational Assistance Payments (EAPs). Tax is applied to the investment income and government grants received when withdrawn from the RESP, not on the contributions you made using your own funds. These amounts are taxed in the hands of the student, and this usually means little or no tax will be paid, because students typically fall into the lowest tax bracket.

How do RESPs help my money grow?

• The sooner you start an RESP for your child, the more time your contributions will have the chance to grow.
• The Canada Education Savings Grant (CESG) matches 20% of annual contributions, up to $500 per year
• The matching contributions can continue until the lifetime limit of $7,200 per child has been reached
• Investing your Canada Child Benefit could help you save enough to qualify for the maximum CESG amount

Government-funded education grants

The Government of Canada encourages saving for a child's education by offering grants to a child’s RESP – that’s even more money to grow your savings!

Canada Education Savings Grant (CESG)

The basic  Canada Education Savings Grant  (CESG) tops up your annual contribution by 20%, up to $500 per beneficiary each year to a lifetime limit of $7,200 per beneficiary. Additional CESG grants may be available, depending on your income. For example, if your net family income is $60,000, and you contribute $2,000 in a year, the government CESG contributes an additional $450 to the child’s RESP.

2022 Summary of basic and additional CESG

*  Subject to change. Date modified July 7th, 2022. ** Subject to the annual CESG limit. ***  If available in your RESP.

Canada Learning Bond

This grant is available to children born on or after January 1, 2004, whose families are eligible to receive the National Child Benefit Supplement. The  Canada Learning Bond  (CLB) can add up to $2,000 per child to your RESP.

Provincial Grants*

The  Québec Education Savings Incentive (QESI)  was established to encourage Québec families to save for post-secondary education. The  British Columbia Training and Education Savings Grant (BCTESG)  is a one-time savings incentive to encourage B.C. families to start planning for their children's education. * If available in your RESP plan

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Your Child’s Tomorrow Starts Now

From their first steps to their first day on campus, planning for their future happens every step of the way. An RESP is a smart way to make the difference between dreaming and doing. Start your journey with us today.

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At Embark, education savings and planning is all we do. Our sole purpose is to help students realize their full potential by simplifying your savings with tools, advice, and an RESP plan that works for your family.

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• A plan that automatically adjusts to your timeline 
• Simple, expert guidance helps make investing easy 
• An innovative digital platform puts education savings at your fingertips 
• Ability to share your plan between your children

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Understanding resps, government grants, making withdrawals, create your tomorrow.

You and your child are moving forward together. Every step gets you closer to everything you hope for and everything they can be. The Embark Student Plan gets you closer to the place where needs and dreams align. It’s one of the most important steps you’ll take to prepare their path to the future.

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Embark is owned by a not-for-profit organization. This means that all profits that aren’t used to run the business go into the Embark Student Foundation. We use these funds to provide additional financial awards that help students realize their full potential. We’ve awarded almost $57 million to families and students across the country to help with their education savings.

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The results are in! All Flex First and Family Single Student Plan RESPs will be upgraded to the Embark Student Plan on July 1, 2024.

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Leading the Way to Success

RESP, TFSA or Savings Account – Which is Better?

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Tips to Help You Save for a Child’s Post-Secondary Education

Students starting university in 2032 can expect a 4-year education to cost about $115,315. 1 While that’s a big number, don’t be discouraged.

Check out our top savings tips based on when your child will be starting school:

My Child Will Start School in:

• Less than 5 Years

How much are you willing to cover?

If you feel overwhelmed by the thought of saving enough for your child to get a 4-year degree—remember, you don’t have to foot the entire bill.

• Let your child have some “skin in the game” through student loans or by working and saving. This could cover 25-50% of the costs and help your child gain valuable work experience.
• Look into grants, scholarships or bursaries your child is eligible for.
• Explore co-op or internship programs that allow students to earn money and work experience while they study.

Open an RESP now.

Open a Registered Education Savings Plan (RESP) as early as possible, even if you have to start small. Here’s why:

• Your money will have more time to grow—tax-free. And, because it is sheltered from tax, it could grow faster.
• The government will match 20% on the first $2,500 you contribute annually to an RESP ($500 maximum per year) through the Canada Education Savings Grant (CESG). Check out RESP grants and bonds .

Turn saving into a habit.

Put your savings on auto-pilot and grow your money faster by setting up regular (weekly, monthly, etc.), automatic contributions into your child’s RESP.

How regular, automatic contributions work

• You decide how much to save and how often—weekly, bi-weekly, monthly—it’s up to you
• Contributions are automatically debited from your bank account (at RBC or another financial institution)
• You can change how much you want to save, how often you contribute, and stop or pause your contributions at any time

Putting just $50 per week in an RESP adds up quickly:

Assumptions used in chart

Calculations are for illustrative purposes only and are not intended to reflect future values or returns on investment from any mutual fund investment. Based on 6.26% average annualized and includes Canada Education Savings Grant (CESG) payments.

Make saving a team effort.

Instead of another toy, suggest that family and friends give RBC RESP Gift Cheques on birthdays and other special occasions.

Can a child have more than one RESP?

Yes, a child can have multiple RESPs. However, the lifetime limit on total contributions for one beneficiary is $50,000. This limit applies to the total contributions made by all subscribers to all plans in the name of the beneficiary. So, if you contribute to an RESP for your child, and their grandparents also contribute to another RESP for them, you will need to coordinate contributions so you don’t exceed $50,000. (Over-contributions are subject to a penalty of 1% per month.) It’s worth noting that you can contribute to an RESP for up to 31 years and the plan can remain open for a maximum of 35 years.

What if I have more than one child?

A Family RESP lets you name one or more beneficiaries and earmark payments based on what works best for your family.

• Each beneficiary has to be related to you (the RESP subscriber) by blood or adoption, and can include a child, grandchild, step-child or sibling.
• Funds in the RESP do not have to be shared equally among beneficiaries, giving you more flexibility when it comes to making withdrawals.

Get started—and stay on track—with free tools.

If you’re an RBC client, you’ve also got access to free tools that can get you started with saving and help you stay on track:

• A quick way to start saving for a child’s education is with the help of NOMI Find & Save . It’s a digital savings account that learns your transaction patterns, finds extra dollars in your cash flow and automatically moves them to savings. Turn on NOMI Find & Save in the RBC Mobile app.
• MyAdvisor is a digital service that makes the heavy lifting of saving for a child’s education—and other goals—easier.

How MyAdvisor can help you save for a child’s education

MyAdvisor is a digital service that combines interactive planning tools and advice from a live advisor to help you stay on top of your savings goals. It’s exclusive to RBC clients, easy to use and available to you at no extra cost.

• See what you have with more certainty.  MyAdvisor shows you how you’re doing with powerful visuals and forecasts of your goals, net worth and cash flow.
• Link outside accounts for a complete picture.  Have savings and investments outside of RBC? MyAdvisor lets you quickly link them for an up-to-date look at your money.
• Receive personalized advice.  Meet with a live advisor through video chat, by phone or in person to review your savings plan, talk strategy or to simply ask a question.
• Stay on track toward your goal with email alerts.  Progress alerts let you know whether you need to adjust the amount you are saving in order to reach your goal.
• Get started in a few simple, hassle-free steps.  In minutes, you’ll have an idea of where you stand, see recommendations to help you grow your savings, and be able to book a one-on-one with an advisor.

Sign in to RBC Online Banking and try MyAdvisor today.

It may still be worth it to open an RESP.

If you haven’t opened a Registered Education Savings Plan (RESP) for your child yet, you still can, but you have some catching up to do.

• Contribute as much as you want in any given year; however, there is a lifetime limit of $50,000.
• If your child hasn’t turned 18 yet, you still have time to take advantage of the Canada Education Savings Grant (CESG). Check out RESP grants and bonds .

Make saving a priority now.

Large RESP contributions are great, but don’t overlook the power of also saving smaller amounts on a weekly or monthly basis to help your savings grow faster. If that approach appeals to you, it’s easy to set up regular, automatic contributions into your child’s RESP.

Tip: Set your automatic contributions to coincide with every paycheque.

Putting just $25 per week in an RESP adds up quickly:

Consider other ways to pay for your child’s education.

With less than 5 years until your child starts school, it may not be possible to cover the entire expense—and that’s okay. Talk to your child about ways they can also contribute, such as:

• Working a part-time or summer job to stock some money away.
• Borrowing money through student loans or a line of credit. For example, the RBC Student Line of Credit offers a low rate and flexible repayment terms to help your child pay off school expenses over time.
• Co-ops or internship programs that let them earn money and valuable work experience while they study.
• Applying for grants, scholarships and bursaries. If your child is a couple years away from graduating high school, now is the time to start looking.

Get started by checking out the scholarships available through RBC or visit the Government of Canada’s Services for Youth site.

If you’re an RBC client, you’ve also got access to free tools that can not only get you started with saving, but also help keep you on track:

FAQs on Saving for a Child’s Education

With tuition fees and other expenses spiralling upward, it’s predicted that in 2032 a student’s annual average expenses including tuition fees, books, shelter, food and transportation will be $27,951. 1

You can open a Registered Education Savings Plan (RESP) for any “beneficiary”—your child, grandchild, niece, nephew or family friend. Each beneficiary must be a Canadian resident and have a Social Insurance Number (SIN).

While you can contribute any amount to an RESP, there is a lifetime limit of $50,000 per beneficiary. Contributions are not tax-deductible (they won’t reduce your taxable income in the year you contribute); however, investment earnings grow tax-free. The Canadian government and some provinces and territories also offer grants, bonds and incentives to help build the savings even faster.

Within an RESP, you can hold Guaranteed Investment Certificates (GICs), mutual funds, exchange-traded funds (ETFs), savings deposits, stocks and bonds. (Your specific choices depend on where you invest.)

Once a student has enrolled in a qualifying post-secondary education or training program, the investment income, grants and bonds within the RESP can be paid out as Educational Assistance Payments (EAPs). The student must claim these as income in the year that they are taken out. Usually, this results in little or no tax since students tend to be in a very low tax bracket and can claim tax credits. Original contribution amounts to the RESP can be taken out tax-free.

The Registered Education Savings Plan (RESP) is a tax-sheltered plan that helps you save for a child’s post-secondary education. While contributions to the plan are not tax-deductible (these amounts won’t reduce your taxable income in the year you make the contributions), your investment earnings within the RESP grow tax-free.

When the child takes the money out for their education, the money withdrawn is taxed in the student’s hands, often resulting in little or no tax. Read more about RESP Rules and Contribution Limits .

In addition to the tax benefits of an RESP, government grants, bonds and incentives may also be available to help build the child’s education savings even faster.

Yes! You can use a Tax-Free Savings Account (TFSA) to save for anything, including your child’s post-secondary education.

Just keep in mind that amounts you contribute to a TFSA are not eligible for the Canada Education Savings Grant (CESG) or other government incentives . However, both earnings and withdrawals in your TFSA are tax-free. You can make withdrawals and pay your child’s school fees directly or give the money to your child.

You can also save for your child’s education in a high interest savings account . It gives you maximum control and flexibility, but any investment income you earn will be taxable in your hands in the year you earn it. This means you could miss out on the benefit of tax-deferred growth.

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Understand the Canadian education system

Are you thinking about studying abroad in Canada? Or sending your child to study in Canada? Canada is recognized for its quality education at all levels. Canada’s provincial and territorial governments are responsible for education. They follow government standards to ensure high quality public education across the country. School is mandatory for children from about the age of six years old to 18 years old. Our study environments are safe and welcoming. You’ll discover a world of possibilities!  

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Are you moving to Canada with your children or thinking about sending your child to study abroad? Canada offers excellent elementary or primary school education options.

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To prepare your child for university, college or to offer them an international experience, consider Canada for high school studies. Find out about our secondary school options.

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Canada’s colleges and vocational schools offer practical, hands-on learning. When you graduate, you’ll receive a certificate or diploma.

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Canada is an international research leader and has some of the top universities in the world. When you graduate, you’ll receive a Bachelors, Masters or PhD degree.

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Our CET Group Option Plan is the highest paid 1st scholarship 27 years in a row 1

Nearly $133 million in payments from the CET Plans paid to Canadian Families in 2023 2

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1 CEFI has compared the first Scholarship payments on a per unit basis from the Children's Education Trust of Canada Group Option Plan to the comparable first scholarship payments of other nationally available group scholarship plans through publicly available financial statements and prospectus documents at www.sedar.com. On the basis of this comparison, CEFI has determined that the Children's Education Trust of Canada Group Option Plan has paid the highest first Scholarship payments per unit to beneficiaries from 1997 to 2023 inclusive. Past payments are not a guarantee of future payments.

2 Total 2023 payments to Canadian Families include return of net Contributions at plans' maturity and total Education Assistance Payments paid to beneficiaries as reported in the Statement of Changes in Net Assets Attributable to Subscribers and Beneficiaries in our 2023 Annual Audited Financial Statements available here .

Watch your contributions grow

*This RESP calculator is for general information only. It does not take into account any additional grants offered based on adjusted family net income. This illustration is based on the Self-Initiated Option Plan which is an individual plan and takes into account the following fees as they apply to that RESP: sales charge, depository fee and administration fee. Please note that fees vary among our RESPs. Your Dealing Representative will discuss fees with you in detail as part of the plan presentation and you can also refer to our prospectus. Your child could be entitled to different amounts than those projected. These projections are for your information only. These projections are not guarantees of future investment returns. The information presented and projected is hypothetical and only for information purposes.

You can set up an RESP for only $9.90/month.

The calculation tool generates projections for information only and is designed to illustrate the general overall benefits of an RESP. This tool does not specifically apply to group RESPs and is based on our Self-Initiated Option Plan which is an individual plan. The projection assumes that you make monthly contributions at your selected amount until the year your child reaches 18 years of age. Fees vary depending on the RESP that you select. The projected growth of grants and savings defaults to a 4.5% rate of return assumption but you can select a higher or lower rate of return assumption. As they are rate of return assumptions, these projections cannot be considered a guarantee of future performance, nor interpreted as a commitment on our part.

The RESP calculator takes into account the basic 20% Canada Education Savings Grant (CESG) and in some provinces where they are offered, the basic provincial grants, only offered to residents in certain provinces. The lifetime CESG limit per beneficiary is $7,200.

Certain restrictions apply: The annual CESG limit is $500 and the lifetime RESP contribution limit is $50,000 per child. If your adjusted family net income is modest, your beneficiary could be eligible for the additional CESG.

Your child could also receive the Canada Learning Bond, offering a lifetime amount of up to $2,000 for children born on or after January 1, 2004. Certain conditions apply. Please learn more about the Canada Learning Bond here . You can also refer to our prospectus .

We offer three different RESPs and different contribution options. A minimum subscription amount is usually required. For further details, contact us or refer to our prospectus .

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College Savings Accounts: U.S. vs. Canada

Every parent dreams of the day their children go off to college. After all, it's a defining point in everyone's life. But let's face it, going to college or university costs a lot of money. So it makes sense to have a plan to save up for this very important life event. While Americans can save for their children's education in a tax-advantaged investment plan, Canadian children can have grants awarded to them at birth. Through the Canada Education Savings Grant (CESG), parents can start saving for their children's education literally at day one. Even better, the Canadian government will pitch in for part of the tab.

Read on to learn more about this program and how it differs from the 529 plans available to American parents.

Key Takeaways

• The Canadian Education and Savings Grant is an incentive-based program where the federal government matches contributions made to an RESP up to a certain percentage.
• Contributions are returned if the beneficiary doesn't attend a post-secondary institution within 36 years of the date the account is opened.
• Parents aren't subject to taxation on invested contributions but they are taxed on investment earnings withdrawn from the RESP and not used for educational expenses.
• 529 plan contributions are made with after-tax dollars, where accumulated earnings grow tax-free at the federal level.

The Canadian Education and Savings Grant is an incentive-based program that allows Canadians to receive a grant for the money they save for a child's education, whether that's a parent, another family member, or a friend. Here's how it works.

Parents open a Registered Education Savings Plan (RESP) at a bank, credit union , or other financial institution. As mentioned above, anyone can contribute—a parent, aunt, uncle, friend, or grandparent. Since an RESP is an investment account, there may be fees attached. Parents should be careful to choose one that's right for their children.

The government then matches the money up to a certain percentage and deposits it into the RESP. This matching contribution is what makes up the Canadian Education and Savings Grant. The program provides a 20% base batch on the first $2,500 of contributions for all families, for a maximum grant of $500 per year. Lower-income families may qualify for additional grants. For 2023, families that earn between $53,359 and $106,717 are eligible for an additional 10% grant on the first $500. Those with adjusted family incomes below $53,359 may receive an extra award of 20% on the first $500. Each child can earn up to $7,200 in lifetime grants.

Parents are not able to deduct contributions from their income taxes . However, earnings are not taxable as long as they stay within the RESP.

Once the beneficiary is enrolled in an approved post-secondary institution, they receive payments called educational assistance payments (EAPs) from their RESP. Unfortunately, students who receive funds from an RESP must pay income tax on those payments. But the taxes they pay will likely be a lot less than what parents would have paid on the same money because students usually aren't raking in a lot of cash.

But there is one catch. The child must pursue an approved post-secondary education training program, such as college or trade school, within 36 years of opening the account to get full benefits. The contributions are returned if the beneficiary doesn't go to school and the government will take back the grant money. But the money may not be entirely lost since the account holder may be able to transfer the balance to another child.

You don't have to pay income tax on the contributions you invested. However, any investment earnings withdrawn from the RESP and not used for education-related expenses are subject to income tax and a 20% penalty tax. These payments are called accumulated income payments (AIP).

Even a few dollars per week adds up quickly. For instance, investing $9.62 per week adds up to $500 in a year. If you met the income requirements, this amount is matched at $200. In one year, you would have saved $700—before interest —for your child.

If you started doing this in year one of your child's life, your contribution would be $8,500 before earning any interest. If grant levels remain the same, you may receive as much as $3,400 from the government. Your son or daughter would end up with a base amount of $11,900 for education. Depending on your investments, that could grow to a substantial sum with compounding .

There are also grant programs, where you can get more money for your RESP from the government if you meet the income requirements. For example, your child could be eligible to receive a $500 Canada Learning Bond . If you continue to meet the requirements, you can receive another $100 per year to fund your child's RESP until they hit age 15. No personal contributions are required, and you can receive a maximum of $2,000 from Canada Learning Bonds.

How Does the American 529 Plan Compare?

The American 529 plan is similar to an RESP in that it is an investment vehicle for parents to contribute to their child's education. Contributions made to 529 plans are made with after-tax dollars , and the earnings accumulated in the plan grow tax-free at the federal level.

The biggest advantage of this structure is that you end up paying no taxes on your withdrawals if they go to qualified education expenses . However, you make contributions with after-tax dollars. That means high-income parents pay a higher tax rate on their contributions than the student receiving the money would have paid. On the other hand, the majority of states offer state tax deductions for parental contributions. Most states though, don't have grant-matching programs, though a handful offer amounts ranging between $100 to $500.

Remember—your state may offer tax benefits for 529 plan contributions and withdrawals aren't subject to federal income taxes when used to pay for qualified higher education expenses.    

There are two types of 529 plans available—college savings programs and prepaid tuition programs. Prepaid tuition programs allow parents to prepay college tuition at today's rates. Prepayment can be very beneficial because of rising tuition rates in the United States. Suppose that a parent put in $2,000 this year to cover tuition for a semester of school 15 years from now, and tuition rose at a rate of 5% per year. The $2,000 invested today would cover $4,158 worth of college tuition. That is equivalent to receiving a $2,158 grant by locking in the tuition at today's level.

Investments in a college savings plan can fluctuate depending on the market, much like in an individual retirement account (IRA) or 401(k) . There is a risk that the market will underperform, and you may end up with less money than expected. At the same time, there is also more potential for growth.

It is also possible to use 529 plan funds to pay down student loan debt thanks to the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019. However, only $10,000 can be used for repaying student loans. Furthermore, this $10,000 ceiling is a cumulative lifetime limit. Keep in mind there are contribution limits for 529 plans that vary between states. Fortunately, these limits are quite high. The ceilings were between $300,000 and $500,000 per beneficiary.

Both Canada and the United States offer programs parents should use when saving for their child's education. Don't stop with education savings plans. Within a year of college, students should also check out and apply for grants and scholarships from universities. After all, more support from universities means less student loan debt for students and their parents.

U.S. Securities and Exchange Commission. " An Introduction to 529 Plans ."

Canada Revenue Agency. " How Much Money Benefits Could Add to the Registered Education Savings Plan ."

Canada Revenue Agency. " How an RESP Works ."

Canada Revenue Agency. " Who Can Be a Subscriber? "

Canada Revenue Agency. " Notice #972 – Revised Income Brackets for the Additional Amount of Canada Education Savings Grant (Additional CESG) for Calendar Year 2023 ."

Canada Revenue Agency. " Canada Education Savings Grant (CESG) ."

Canada Revenue Agency. " Who Can Become a Beneficiary ."

Canada Revenue Agency. " RESP - Accumulated Income Payments ."

Canada Revenue Agency. " Canada Learning Bond ."

Invesco. " College Bound 529: 529 Plan State Tax Information ," Page 3.

Education Commission of the States. " 529 Education Savings Plans: Federal Action and State Policy Trends ," Page 2.

U.S. Congress. " H.R.1865 - Further Consolidated Appropriations Act, 2020 ," Page 643.

Education Commission of the States. " 529 Education Savings Plans: Federal Action and State Policy Trends ," Page 3.

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Ontario tightens rules on cellphone use, bans vaping in schools

T he Ontario government is introducing new measures to crack down on cellphone use and vaping in schools as the province sees an "alarming rise" of vaping and cellphone distractions in classrooms.

In an announcement Sunday, Education Minister Stephen Lecce said the province is removing distractions as part of its back-to-basics plan, and addressing the "negative impact" of mobile devices, social media and vaping in classrooms.

"Every parent and teacher we speak to has shared the growing problem of cellphone distractions in class … in addition to the disturbing rise of vaping in schools [among] our youth," Lecce said at a news conference in North York Sunday.

"We will be denying cellphone use during instructional time. We need to be bold, we need to be comprehensive and we need to act with urgency today."

Starting in September, students in kindergarten to Grade 6 will be required to keep phones on silent and "out of sight" for the entire school day, unless they are granted permission to use it, the province said.

Similarly, students in Grades 7 to 12, will not be permitted to use their cellphones during class time without permission.

"If they do not comply, they will be asked to surrender their phones or they could be sent to the office," Lecce said.

"There are progressive discipline policies listed in this. It can include up to suspension if there [are] repeat violations."

The Progressive Conservative government initially banned cellphone use in 2019, saying students can only use personal mobile devices during instructional time if it is for educational purposes, for health purposes or for special needs. It left it up to boards and schools to implement.

Boards such as the Toronto District School Board have previously said such bans are hard to enforce. The board had a procedure on cellphone usage — before their recent vote to modify it — that said kids should only be on cellphones for educational purposes. The board's chair said it can be applied differently in each school and isn't widely known. 

Lecce said Sunday that the difference between the 2019 ban and the latest one is that there will be consistency in applying and enforcing the new measures across all school boards in the province, calling the results of the last ban "mixed."

Schools to decide when tech use is appropriate

It will fall to school staff to decide when the use of technology is appropriate, and Lecce said he will "have the backs" of the teachers, principals and superintendents who will be the ones enforcing the new government policy.

Quebec and British Columbia have already made similar moves to ban the use of cellphones in class, but Lecce said Ontario will be the first to block access to all social media platforms on school networks and devices.

As part of these changes, teachers will undergo mandatory training, according to the province. Report cards will now also include comments on students' distraction levels in class.

Lecce touted the measures as necessary steps to help students focus in class and improve safety in schools.

"Our policy includes enforcement to ensure compliance and consistency provincewide," he said.

Teacher unions skeptical on changes

The Ontario Secondary School Teachers' Federation remains skeptical about whether a blanket ban will improve matters, the group's president said Sunday.

"I'm not really sure how this is going to change anything going forward," said Karen Littlewood.

Teachers are hesitant to take away students' phones because they would be responsible if the devices are lost, damaged or stolen, she said.

"It leads to so many issues and so many problems," she said. 

The changes reflect some of the demands made by the Elementary Teachers' Federation of Ontario in its most recent round of bargaining with the province.

The group suggested the changes as a way to address increasing violence and disruption in schools, the federation said in a statement issued Sunday.

But the union says it will reserve judgement on the new policies until it has seen the full range of changes in detail.

Vaping ban protects students from 'preventable threats'

In addition to the new restrictions on cellphones and social media use, Lecce said vaping will be banned in all school alongside tobacco, nicotine and cannabis products.

Students caught carrying such products will have them confiscated, and schools will be required to notify parents if that happens, he said.

The government said it has earmarked $30 million from its 2024 budget to install vape detectors and other security upgrades in schools.

Dr. Kieran Moore, the province's chief medical officer of health, said the vaping ban in schools will help protect students from "preventable threats.

"Ontario is seeing a growing number of youth in Grades 7 through 12 report using vaping products that contain and emit many toxic substances," Moore said.

"These products can affect the respiratory, immune and cardiovascular systems, and nicotine in these products is particularly harmful to youth brain development."

The announcement comes after  four major Ontario school boards sued  some of the largest social media companies to over their products, alleging the way they're designed has negatively rewired the way children think, behave and learn and disrupted the way schools operate.

The public district school boards of Toronto, Peel and Ottawa-Carleton, along with Toronto's Catholic counterpart, are looking for about $4.5 billion in total damages from Meta Platforms Inc., Snap Inc. and ByteDance Ltd., which operate the platforms Facebook and Instagram, Snapchat and TikTok respectively, according to separate but similar statements of claim filed in March.

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Canada imposes 24-hour work limit on international students

As part of ongoing efforts to reduce abuses and controversies in nation’s huge programme of international enrolment, trudeau cuts back covid-era 40-hour-a-week policy.

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The Canadian government has agreed to let international students work 24 hours per week in the coming academic year, more than the pre-pandemic norm of 20 hours but fewer than its previous suggestion of about 30 hours.

The new federal limit also is well below the 40-hour allowance that the Trudeau administration allowed after the Covid outbreak of 2020 as a response to worker shortages.

The administration, in settling on the 24-hour level, reiterated its commitment to deterring non-academic uses of Canada’s student visa opportunities.

“First and foremost, people coming to Canada as students must be here to study, not work,” the nation’s minister of immigration, refugees and citizenship, Marc Miller,  said in announcing  the revised limit. “We will continue working to protect the integrity of our student programme.”

The decision is part of a series of Trudeau administration actions aimed at ending the explosive growth of international students in Canada, whose numbers have tripled over the past decade to around 900,000. That huge flow has provided Canada and its institutions a financial windfall, but it also has produced  political pushback  due to housing shortages and other social concerns.

In the most dramatic of those steps, the administration recently announced province-by-province  caps on students from abroad , generally aimed at reducing their numbers by a third over two years.

Canada also has  doubled the wealth requirement  for incoming international students, added a step in the visa process that includes the student getting a letter of approval from the province where they plan to study, and taken steps toward certifying institutions based on their record of student support.

As for the limit on work hours, Trudeau officials said they looked at studies and the norms in other countries and saw sharp declines in academic performance among students working more than 28 hours a week. Also, an internal government assessment prepared back in 2020, and detailed by CBC News in February, had warned Trudeau administration officials against going beyond 20 hours a week, saying that it could distract international students from their classes and harm government programmes designed for temporary foreign workers.

More than 80 per cent of the international students in Canada currently work more than 20 hours a week, Mr Miller said. The government’s tougher new requirement that an international student must prove having saved at least C$20,635 (£12,024) more than their tuition costs also should help ensure that such students can afford their time in Canada, he said.

International students can work unlimited hours during their academic break periods, though the hours restrictions apply to those taking summer classes.

In December, when Mr Miller warned that the Trudeau administration was looking to reduce the 40-hour limit as pandemic conditions faded, he had suggested 30 hours as the likely new maximum.

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Ministers Vandal and Blair and MP McLeod highlight Budget 2024 investments to support post-secondary education in the North

From: Crown-Indigenous Relations and Northern Affairs Canada

News release

Today, the Honourable Dan Vandal, Minister of Northern Affairs, the Honourable Bill Blair, Minister of National Defence, and Michael McLeod, Member of Parliament for the Northwest Territories, met with members of the Dechinta Centre for Research and Learning in Yellowknife, Northwest Territories, to emphasize Budget 2024’s investments in post-secondary education for the next generation of First Nations students. These investments include $5.2 million over two years, starting in 2024–25, to support the Dechinta Centre for Research and Learning as they provide innovative Indigenous-led land-based post-secondary education and research programming in northern communities.

April 25, 2024 – Yellowknife, Northwest Territories – Crown-Indigenous Relations and Northern Affairs

The federal government recently delivered Budget 2024: Fairness for Every Generation .

It is a plan to build a Canada that works better for everyone, where younger generations can get ahead, where their hard work pays off, and where they can buy a home—where everyone has a fair chance at a good middle class life.

Budget 2024 is a plan to deliver fairness for every generation.

First, the budget takes bold action to build more homes. Because the best way to make home prices more affordable is to increase supply—and quickly. It lays out a strategy to unlock 3.87 million new homes by 2031. Key measures include launching the new Public Lands for Homes Plan and Canada Rental Protection Fund, enhancing the Canadian Mortgage Charter, and creating a new Canadian Renters’ Bill of Rights.

Second, it will help make life cost less. The budget builds on the government’s transformative expansion of Canada’s social safety net—$10-a-day child care, dental care for uninsured Canadians, the first phase of universal pharmacare—and advances the government’s work to lower everyday costs for Canadians. This includes helping to stabilize the cost of groceries, cracking down on junk fees, and lowering the costs of banking. Budget 2024 also makes transformative new investments, including a National School Food Program and the Canada Disability Benefit.

Third, this year’s budget will grow the economy in a way that’s shared by all. The government’s plan will increase investment, enhance productivity, and encourage innovation. It will create good-paying and meaningful jobs, keep Canada at the economic forefront, and deliver new support to empower more of our best entrepreneurs and innovators. This includes attracting more investment in the net-zero economy by expanding and delivering the major economic investment tax credits, securing Canada’s advantage as a leader in artificial intelligence, and investing in enhanced research grants that will provide younger generations with good jobs and new opportunities. It also means ensuring Indigenous Peoples share in this growth in a way that works for them.

Budget 2024 will also make Canada’s tax system fairer by asking the wealthiest to pay a bit more—so that the government can invest in prosperity for every generation, and because it would be irresponsible and unfair to pass on more debt to the next generations. Budget 2024 is a responsible economic plan that upholds the fiscal objectives outlined in the 2023 Fall Economic Statement , and sees Canada maintain the lowest deficit- and net debt-to-GDP ratios in the G7.

“Our government first came to office with a vow to strengthen and expand the middle class. We delivered on that pledge by reducing poverty, especially for children and seniors, and creating millions of good jobs for Canadians. Our work isn’t done. Budget 2024 renews our focus on unlocking the door to the middle class for millions of younger Canadians. We’ll build more housing and help make life cost less. We will drive our economy toward growth that lifts everyone up. That is fairness for every generation.”  The Honourable Chrystia Freeland Deputy Prime Minister and Minister of Finance

“Over the last five years, the number of First Nations, Inuit, and Métis with a bachelor's degree or higher has increased, but Northerners continue to face fewer opportunities for higher education. That’s why we’re helping Northerners access post-secondary education closer to home. Budget 2024 investments – in education, housing, infrastructure, health services, and more – are helping accomplish the Arctic and Northern Policy Framework goals, which will ensure a better future for all Northerners.” The Honourable Dan Vandal, P.C., M.P. Minister of Northern Affairs

“People in the Arctic and North face longstanding inequities in education and research. Through Budget 2024, we are investing to make post-secondary education more accessible in Indigenous communities so that everyone has a fair shot at success.” The Honourable Bill Blair Minister of National Defence

“The Dechinta Centre for Research and Learning has had a significant impact on communities and individuals in the North and beyond. The programs offered by Dechinta not only empower and support Indigenous practices but they have also been designed to mitigate existing barriers. The investments in Budget 2024 are crucial to addressing the socio-economic gaps that face Indigenous communities in the North and across Canada.” Michael McLeod Member of Parliament for the Northwest Territories

Related products

• Budget 2024: Fairness for Every Generation
• Backgrounder: A Fair Future for Indigenous Peoples
• Budget 2024: Key Measures
• Backgrounder: Fairness for Younger Generations

Media may contact:

Carson Debert Press Secretary Office of the Honourable Dan Vandal Minister of Northern Affairs [email protected]

Media Relations Crown-Indigenous Relations and Northern Affairs Canada 819-934-2302 [email protected]

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