REGISTERED EDUCATION SAVINGS PLAN (RESP)
- Helps save for a child’s education
- The Government of Canada provides a cash grant of 20% of contributions, up to $500/year per child until age 17 and residents of Quebec get additional 10% grants provided by the provincial government
- The grant room is cumulative to a total of $1,000 in any one year
- Income and gains grow tax-deferred, and withdrawals are favorably taxed to the student
The graph below illustrates an annual combination of a $2,500 contribution and a $500 Canada Education Savings Grant, compounding at 8%, can grow to $43,460 over 10 years:
Federal Grants for RESPs
The Canada Education Savings Grant (CESG) will match up to 20% of your contribution, up to a maximum of $500/year per beneficiary. The CESG has a lifetime limit of $7,200.
The Canada Learning Bond (CLB) provides up to $2,000 per child for families with a modest income. The child must be born after December 31, 2003 to qualify.
Provincial Grants for RESPs
Several provincial governments offer added incentives to encourage early savings for educational purposes. The province is determined by the residency of the parent/guardian.
Revenu Québec introduced the Québec Education Savings Incentive (QESI) as a tax measure for eligible beneficiaries who reside in Québec. An RESP account can receive an amount equal to 10% of the net contributions paid into it over the course of a year, up to a maximum of $250 per year. For low-income families, an increase of up to $50 per year, calculated on the basis of family income, may be added to the basic amount. In addition, since 2008, up to $250 of unused benefits accrued during previous years can be added to the basic amount. A beneficiary cannot be granted a cumulative amount of more than $3,600 for all of the RESPs for which he or she is the beneficiary.
When a B.C. resident child turns six years old, the Province of British Columbia will add $1,200 to the child’s RESP.
Our No-Fee RESP Providers
| AGF | Fidelity | Manulife |
| BMO | Franklin Templeton | National Bank |
| CIBC Asset Management (Renaissance) | Invesco Trimark | NEI Investments |
| CI Mutual Funds | Mackenzie Investments | TD Mutual Funds* |
*Does not qualify for the Canada Learning Bond or additional Canada Education Savings Grants.
