Registered Education Savings Plan Canada

Registered Education Savings Plan Canada

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Read this article to understand Registered Education Savings plans in Canada, how they work and how they might be able to benefit you and your family.

What is a Registered Education Savings Plan?

A Registered Education Savings Plan, commonly abbreviated as RESP, is a form of investment where Canadian parents can save for their children’s higher, or postsecondary, education.

The government of Canada considers RESP as a contract between a subscriber (an individual, often a parent) and the promoter (another person, organization or a government entity). The subscriber enters into a contract where he or she names beneficiaries (children who will become future students). The subscriber agrees to make contributions towards the beneficiaries, which are called educational assistance payments (EAPs). The beneficiaries can use the EAPs for enrolling in and studying at a university or a college later in life.

There are two types of RESPs in Canada: family plans and specified plans. Family plans allow subscribers to add more than one beneficiary, as long as each beneficiary is related by blood or by legal adoption. The beneficiary under a family plan must be less than 21 years to be named as such. On the other hand, only one beneficiary is allowed under a specified plan. The beneficiary under specified plan does not necessarily have to be related to the subscriber by blood. Therefore, specified plans are sometimes called non-family plans. Beneficiaries can also claim disability tax credit after a selected number of years. Beneficiaries who are already named in family plans cannot be named again under specified plans.

RESPs are managed and supervised by the Canada Revenue agency. The agency’s website lists detailed information regarding RESPs.

How Does It Work?

RESPs work quite simply. First, a subscriber enters into a one type of RESP contract and names a beneficiary or several beneficiaries when allowed. The subscriber enters into the contract with a promoter, which can be an individual or an entity that will be in charge of repaying the contributions to the beneficiaries.

The subscriber than starts making contributions to the RESP. These contributions are subject to income tax law and there is a limit of how many contributions a subscriber can make.  The promoter will administer the contributions made to the RESP and make sure all payments are made according to the terms in the contract. The contributions to the plan can also include government grants provided by the Canada Education Savings Grant (CESG), Canada Learning Bond (CLB) or any recognized provincial education savings program. The subscriber cannot claim income tax deductibles on the contributions paid to the RESP.

When the time comes, the promoter will pay the contributions to the beneficiaries as educational assistance payments (EAPs). If needed, the promoter may pay the contributions in accumulated chunks. The beneficiaries who receive EAPs should include the amount received per year as income tax. The beneficiaries do not have the specifically disclose the contributions received in income tax files.

If the beneficiary is unable to or is ineligible to receive the EAPs, then the promoter will return the contributions back to the subscriber free of income tax.

Benefits of a Registered Education Savings Plan

The following are some of the benefits of RESPs:

  • RESPs are tax shelters. The contributions may not be tax deductible, but they are sheltered from taxation as long as the amounts remain in the plan.
  • RESPs make it easy to contribute to funds regularly. So, funds are readily available.
  • Subscribers and beneficiaries will get access to Canada Education Savings Grant (CESG).
  • RESPs are highly flexible. The contributions to be withdrawn can be altered any time. Also, beneficiaries can use payments for a variety of educations costs including covering for textbook purchases or for buying educational accessories like lab gear.
  • The federal government can make contributions to the plan.
  • The beneficiary students pay little to no taxes on the contributions they receive as income.

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Canadian Baby Stores

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Want to shop for baby items online or in store, in Canada? There are a number of local stores that you can choose from. Choices are almost unlimited for buying baby items online in Canada. Branded and chain stores across the country have also made various baby items accessible to Canadians regardless of the location. Here is a list of the most well known Canadian baby stores:


Snuggle Bugz

This is the best known baby and maternity store in Canada. Snuggle Bugz has a vastly popular online store as well as physical stores in select locations. You can find almost everything related to baby products at the Snuggle Bugz online store. The website is designed Amazon-style, and there are always excellent deals to find. Discount offers are available during the holiday season and on special days. The store also offers useful gift guides. You can place orders to be gift wrapped and delivered as well.

Baby en Route

Baby en Route is one of the best online stores for baby goods that offer free shipping for orders above $50 within Canada. They also have physical stores in British Columbia and Ontario, but the online shop is more popular. The store offers a wide variety of baby goods from infancy to preschool. It’s one of the few baby stores with a solid selection of bags and clothing items for new mothers. The store offers great deals for stylish strollers and similar baby gear. You can also buy safety items to childproof your house from the online store. Baby

Amazon is certainly the best known online retailer in Canada. If you want to select baby goods from a number of international brands, Amazon will be an excellent place to shop. Amazon is good for finding budget baby goods, including deals for used items.

Brick Mortar

Baby & Beyond

Baby & Beyond is one of the best known stores in Canada for infant and maternity essentials. The main store is located in Sherwood Park, Alberta. The company’s online store has recently become quite popular across Canada as well. You can buy toddler items, baby items, maternity products and baby gifts both online and in store. The store is known to offer expert assistance for selecting gear and accessories. You can buy products needed from pregnancy to preschool at the store, so it’s a convenient one-stop-shop for young families. Baby & Beyond is also a top place to shop for maternity necessities like breast pumps, nursing bras, and maternity gowns. The store also offers baby gift registries both online and in store. Plus, overseas customers can get items at very reasonable international shipping rates.

Bô Bébé

Bô Bébé is the foremost French-Canadian baby store located in Quebec (though English language services are offered as well). This 20-year-old brand has stores in Montreal, Laval and St-Hubert. The store particularly specialises in selling local Quebec baby products like locally made cribs, furniture and handicraft toys. The store is a great place to buy necessities like strollers, high chairs, car seats, toys and baby to toddler clothing. There’s an online version of the traditional store that also offers great deals. You can buy gifts here, or get a very valuable Bô Bébé gift card for a friend or a loved one. The store offers delivery for all orders at great rates.

West Coast Kids

West Coast Kids is a specialty baby retailer with stores located at Toronto, Vancouver, Calgary, and Winnipeg among other places. The store focuses on baby furniture, but there is other merchandise available as well. If you like personalised and intimate service, West Coast Kids is the best place to go.

Baby Land and Cheeky Monkey are two other excellent baby stores in Canada that you might want to check out.