Backgrounder: Canada Education Savings Program

Canada Education Savings Program

The Canada Learning Bond is money that the Government of Canada deposits directly in Registered Education Savings Plans (RESP) of children from low-income families, born in 2004 or later, to help pay for their post-secondary education. The Bond provides an initial payment of $500, plus $100 for each year of eligibility up to age 15, for a maximum of $2,000. Personal contributions are not required to receive the Bond.

To be eligible for the Canada Learning Bond, a child must be from a low-income family and:

·        have been born on or after January 1, 2004;

·        be a resident of Canada;

·        have a valid Social Insurance Number; and

·        be named as a beneficiary to an RESP.

The Canada Education Savings Grant consists of a basic grant of 20 percent on the first $2,500 in annual personal contributions to an RESP (available to all eligible Canadians regardless of their family income), as well as the additional amount of Canada Education Savings Grant, which is:

a)  10 percent on the first $500 of annual personal contributions for children from families with an adjusted income between $46,605 and $93,208; or

b)  20 percent on the first $500 of annual personal contributions for children from families with an adjusted income of $46,605 or less.

The Grant is available until the calendar year in which the beneficiary turns 17, and the maximum lifetime amount, including the additional amount of Canada Education Savings Grant, is $7,200.

The child’s primary caregiver (and effective January 2018, the spouse or common-law partner of the primary caregiver) can request the Canada Learning Bond on behalf of an eligible child. The primary caregiver is the person who is eligible to receive the Canada Child Benefit in the child’s name. The child’s primary caregiver must have applied for the Canada Child Benefit for the child through the Canada Revenue Agency and must continue to file income tax returns, allowing eligibility to be validated. Children in care qualify for the Bond.

Education Savings Referral Added to 5-in-1 Newborn Bundle

Ontario is the first province to bundle an Education Savings Referral service for parents when they register their newborn and apply for birth products through ServiceOntario. Parents may now choose to be contacted by a participating RESP promoter to start the process of opening an RESP and requesting education savings incentives—the Canada Education Savings Grant and the Canada Learning Bond—for their child.

The expanded service, which launched on March 25, aims to increase access to education savings incentives offered through the Government of Canada.

Through the 5-in-1 Newborn Bundle, parents of newborns living in Ontario will continue to be able to:

• register their child’s birth;
• request a birth certificate or birth certificate with parental information;
• apply for a Social Insurance Number; and
• sign up for Canada child benefits (including Ontario child benefits).

Also new to the bundle is the option to order a birth certificate that includes parental information, which will make it easier for parents to apply for products for their children that require proof of parentage, such as a child’s passport application.