RESP Bulletin No. 2

May 24, 2011

This bulletin is the second in the series published by the Registered Plans Directorate. It will discuss issues that arise from time to time with regards to the administration of registered education savings plans (RESPs) and the Income Tax Act. This technical publication is intended primarily for use by promoters of RESPs.

Bill C-9, which received Royal Assent on July 12, 2010, amended section 146.1 of the Act by modifying the definitions of "contribution" and "designated provincial program".

RESP contributions

Originally, the definition of "contribution" excluded an amount paid under the Canada Education Savings Act (CESA) or a designated provincial program. The definition has now been amended as follows:

"contribution" to an education savings plan does not include an amount paid into the plan under or because of

(a) the Canada Education Savings Act or a designated provincial program, or
(b) any other program that has a similar purpose to a designated provincial program and that is funded, directly or indirectly, by a province (other than an amount paid into the plan by a public primary caregiver in its capacity as subscriber under the plan).

The purpose of this amendment is to ensure that amounts paid into an RESP under any program that is similar to a designated provincial program and is funded, either directly or indirectly, by a province will not be eligible for payments under the CESA. However, an exception is provided for amounts paid into the plan by a public primary caregiver (such as a child welfare agency). This amendment applies to the 2009 and subsequent tax years.

Designated provincial program

The words "prescribed program" in paragraph (b) of the definition of "designated provincial program" have now been replaced with the following:

(b) a program established under the laws of a province to encourage the financing of children's post-secondary education through savings in registered education savings plans.

The purpose of this amendment is to ensure that programs established under the laws of a province and have a purpose consistent with the CESA (such as the Quebec Education Savings Incentive) will be included under the definition of designated provincial program. This amendment applies to the 2007 and subsequent tax years.

Promoters should review their specimen plans to determine whether amendments are needed. The definitions of "contribution" and "designated provincial program" must be in accordance with section 146.1 of the Act.

Where to get help

Registered Plans Directorate

You can find more information at Savings and pension plan administration.

By telephone

Toll-free in Canada and the United States: 1-800-267-3100
If you are calling from outside of Canada or the United States, call us collect at 613-221-3105. The Registered Plans Directorate accepts collect calls.

By mail

Registered Plans Directorate
Canada Revenue Agency
Ottawa ON  K1A 0L5

By courier

Information Holdings Operation Section – Registered Plans
Registered Plans Directorate
Canada Revenue Agency
875 Heron Road, B70
Ottawa ON  K1A 1A2

We welcome feedback on this bulletin. Send comments by email to RPD.LPRA2@cra-arc.gc.ca.

Related publication

Information Circular 93-3R2, Registered Education Savings Plans

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