Actualis



August 2007
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RESPs now better than ever

Following the most recent federal budget, Registered Education Savings Plans (RESPs) have become more flexible than ever – and more profitable.


With children heading back to school soon, many parents and grandparents are re-discovering the importance of putting money away to finance their children’s or grandchildren’s post-secondary education. Now, the federal government has just made RESPs more attractive, and at least one provincial government has announced its plans to do the same. With the new provisions, a multitude of scenarios will be possible. There’s plenty to think about … and to discuss.

The new RESPs at a glance
  Previous Provisions New Provisions *
Annual contribution limit per child $2,000
($4,000 in case of unused contribution room)		 No contribution limit
(up to lifetime limit)
Lifetime contribution limit per child $42,000 $50,000
Annual maximum Canada Education Savings Grant (CESG) amount per child
$400
($800 in case of unused contribution room) 		$500
($1,000 in case of unused contribution room)
Lifetime Canada Education Savings Grant (CESG) amount per child $7,200 Unchanged
Canada Learning Bond (families whose net income is less than $36,378) An initial $500, followed by up to 15 annual $100 entitlements Unchanged
Additional measures from the Alberta Government    
Alberta Centennial Education Savings Plan $500, plus an additional $100 at ages 8, 11 and 14 (certain conditions apply) Unchanged
Additional measures from the Government of Quebec **    
Refundable tax credit, per child Non-existent Starting with the 2007 taxing year, 50% of the CESG per year, up to a lifetime limit of $3,600

* These provisions will apply to contributions made after 2006. The Bill was adopted by the House of Commons on June 12, 2007, and received royal assent on June 22, 2007.

** This measure applies to contributions made to an RESP after February 20, 2007. The Quebec budget was adopted on June 1, 2007.



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