Education After High School: The Canada Guide to Saving


The latest statistics are out.  In Canada, education after high school will cost you, on average, $6,463 in 2019/2020.  The amount is determined without the additional cost of room and board, transportation or a meal plan that most university and college students require.  We know higher education is expensive, so it is important to determine how to save money as early as possible.  

To help your child with the cost of university, one thing to consider is opening a registered education savings plan (RESP). 

According to Children’s Education Funds Inc. (CEFI), a provider of RESPs since 1991, parents can be more financially prepared for paying for their child’s higher education through an RESP.  

Here’s what you need to know when considering opening an RESP: 

First, you’ll need to obtain a social insurance number for your child upon his or her birth.  You’ll need this number to set up his or her RESP and to register for government grants. Check out the Service Canada website for more information. 

Once your child is born and you have his or her social insurance number, you can open an RESP.  The best way to begin this is by doing your research.  Understand that there are different types of RESPs, so it is important to find a plan that fits your families’ financial requirements.  

Anyone can open an RESP; this includes grandparents, aunts and uncles, even a friend of the family.  Each plan allows family members or friends to contribute a lifetime maximum of $50,000 per child, and the money is tax-deferred for as long as it stays inside the plan.  

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To determine which RESP best fits your financial needs, decide how much money and how often you’ll contribute to your child’s plan.  You can enhance your RESP with the benefit of government grants. Everyone is eligible for the basic Canadian Education Savings Grant or CESG, which matches 20% of the first $2,500 yearly contributions to a lifetime maximum of $7,200.  

If your child decides higher education is not for them, the good news is – you still have options.  Although this varies by provider, you can typically transfer an RESP to another eligible beneficiary or transfer up to $50,000 to your RRSP or spousal RRSP tax-free, provided you have sufficient contribution room. 

Remember, each RESP can vary depending on fees, commissions, types of investments held within the plan and expected rates of return. Like any financial decision, you should do your research in order to make the best choice for you and your child.


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