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.

How to contact us

Contact us at the Registered Plans Directorate if you have any questions about this RESP bulletin.

Our telephone enquiries service is available Monday to Friday from 8:00 a.m. to 5:00 p.m., Eastern Time (with a voice mailbox system to take messages outside those hours):

In the Ottawa area
For service in English: 613-954-0419
For service in French: 613-954-0930

Toll-free elsewhere in Canada
For service in English: 1-800-267-3100
For service in French: 1-800-267-5565

Promoters of RESPs who need guidance on specific registration issues can write to us at the Registered Plans Directorate, Ottawa ON K1A 0L5 or fax us at 613-952-0199.

We welcome feedback on this bulletin. Email your comments to: RPD.LPRA2@cra-arc.gc.ca

Related publication

Information Circular 93-3R2, Registered Education Savings Plans

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