Best Planners Inc.

Investment

RESP

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Tuition costs in Canada have roughly doubled in the last 20 years. An RESP addresses that in two ways at once: it shelters investment growth from tax until your child withdraws it for school, and it unlocks government grants that add money to the plan automatically — grants that are only available through an RESP.

Why starting early changes the outcome

The Canada Education Savings Grant adds 20 cents for every dollar you contribute, up to $500 per year on the first $2,500 of annual contributions. That's a guaranteed 20% return on that first portion before your investments do anything at all. Families that start when their child is born have 18 years for those compounding grants to work.

Waiting until your child is 10 or 12 still allows contributions and grants, but the compounding window is much shorter. Catch-up contributions can cover some of the missed ground, but the earlier years carry the most growth potential. The RESP is one of those situations where the cost of delay shows up clearly.

Government grants available through an RESP

Canada Education Savings Grant (CESG)

The federal government adds 20% on the first $2,500 contributed each year, to a lifetime maximum of $7,200 per beneficiary. Families with lower income may qualify for an enhanced grant rate, up to 40%*.

Canada Learning Bond (CLB)

Additional federal funding for children in lower-income families, up to $2,000. No contribution is required to receive the CLB — the government deposits it directly into the RESP, provided one has been opened.

Alberta Centennial Education Savings Grant

A one-time grant for Alberta residents, with additional top-ups at ages 8, 11, and 14.

* Enhanced CESG rate available to qualifying lower-income families. Conditions apply.

How the money gets used

When your child enrolls in a qualifying post-secondary program, they can start withdrawing from the RESP as Educational Assistance Payments. These withdrawals are taxed as the student's income — which is almost always very low — rather than yours.

If your child does not pursue post-secondary education, you have several options: transfer to another beneficiary, roll investment earnings into your RRSP (subject to contribution room), or close the account and return the grants while keeping your own contributions and investment gains.

Service area

Jatinder Singh and his team serve clients across Ontario and Alberta. Appointments are available in person at 195 Queen St E, Brampton, or by phone.