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Government grants: Save for a child's post-secondary education

One of the biggest advantages of opening a Registered Education Savings Plan (RESP) for your child is that you are eligible for Government of Canada grants that add money to your child's post-secondary education fund.

Canada Education Savings Grant (CESG)

The Canada Education Savings Grant (CESG) boosts your own savings in a Registered Education Savings Plan (RESP) for your children's education.

The Government of Canada will give 20% of the amount you contribute to the RESP, up to a maximum grant of $500 per year for each child identified as a beneficiary of the RESP. To receive the maximum $500 grant annually, you would need to contribute $2,500 to your RESP each year.

If you can't contribute that much, you can still receive 20% of the amount you do contribute. For example, for $1,000 in contributions, you would receive a $200 grant.

The lifetime maximum CESG you can receive is $7,200 per child.

You must apply each year to receive the CESG.  Often, the company with which you have set up the RESP will apply on your behalf, but check to confirm if they do.

Example: how the CESG helps your RESP savings grow

In this example, you contributed $2,500 a year into your RESP for 10 years and the funds grew 3% a year.


 
RESP – No CESG
RESP with CESG
Total RESP contributions
($2,500 a year over 10 years

$25,000

$25,000
Total CESG contributions
($500 a year over 10 years)

–

$5,000
Total RESP contribution
$25,000
$30,000
Investment income earned (3% return)
$4,519
$7,459
Total RESP savings
$29,519
$35,423

With the CESG contributions, you were able to save $5,904 more towards your child's education.

For lower-income families, the Additional Canada Education Savings Grant (A-CESG) provides additional grant money.

For more information on the CESG, visit the Canada Education Savings Grant section of the CanLearn website.

Canada Learning Bond (CLB)

Lower income families who are eligible for the National Child Benefit Supplement may also qualify for the CLB and could receive up to $2,000 without having to contribute any of your own money to your RESP.

For more information on the CLB, visit the Canada Learning Bond section of the CanLearn website.

Provincial government programs

Alberta and Quebec offer other incentives to encourage families to open an RESP.

The Alberta Centennial Education Savings Plan Grant (ACESPG) will contribute a basic grant of $500 directly to the RESP of eligible children born to Alberta residents in 2005 and after.

The Quebec Education Savings Incentive (QESI) consists of a refundable tax credit that is paid directly into an RESP opened with a financial institution or with another RESP provider that offers the QESI. An RESP account can receive up to $250 per year.

To really take advantage of federal and provincial education savings grants, open an RESP and start contributing whatever you can as early as possible. The earlier you start, the more time your savings have to grow.

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Date Modified:
2012-12-05