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Need more information on the Canadian Education Savings Grant (CESG) and education planning? We invite you to read this FAQ to find the answers you're looking for. If you have any specific questions, we would be pleased to assist you.

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What is Human Resources Development Canada (HRDC)?

HRDC is the branch of the Federal Government of Canada that is responsible for monitoring and paying the CESG.

Is the grant included in the calculation of $50,000 lifetime contribution to an RESP?

No. The limits exclude the grant, as well as distributions and income earned on the investment.

When is CESG money paid out?

Your contribution data is forwarded electronically by the administrator of your RESP to HRDC. The administrator will receive a lump sum payment from HRDC, which will be applied to purchase additional units in your RESP account.

Can the CESG amount be carried forward?

Yes. If you contribute less than $2,500 in any given year, you may apply for the unclaimed CESG in the following years up to a maximum of $1000 per year and a lifetime total of $7,200. For example, if you set up a plan in 2007 and contribute $5,000, you are eligible for a $500 grant for 2007 and a $500 grant for 2006.

How is the money taxed?

This is the great thing: income accumulates in the plan tax-free! Both the CESG and accumulated earnings, when paid out to the beneficiary for educational purposes, are taxed as income in the hands of the beneficiary. If the student is in the lowest tax bracket, no tax whatsoever needs to be paid. The return of the contributions to the subscriber is not taxable.

If I have more than one RESP, which account will receive the CESG?

Where multiple applications for the CESG are made in the same quarter, the CESG is deposited to the RESP to which the first contribution was made in the respective quarter. If contributions relating to the same beneficiaries are made on the same date, HRDC will automatically split the grant money proportionally.

Does CESG contribution room accumulate for children under age 18 even if a RESP doesn't yet exist?

Grant room accumulates every year from December 31, 1997, until the year of their 17th birthday, whether or not they have an RESP. This grant room can be carried forward to future years' RESP contributions.

What is the maximum age a child can be to qualify for the CESG?

HRDC will only pay grants to RESPs of beneficiaries up to the year of their 17th birthday. For beneficiaries aged 16 and 17, the grant will only be paid if:

  1. there have been contributions to the RESP of at least $100 per year in any 4 years prior to the year in which they turned 16, or
  2. previous contributions totaled at least $2,000 before the beneficiary turned 16.


Additional Information

Benefits of an RESP

  • Up to $7,200 in Government Grants
  • Tax-Sheltered Growth
  • Flexible Investment Options
  • Tax Savings

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Useful Tools and Information

Planning Tool

Get started by estimating the costs that a child would incur.

Education Planning Calculator


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