A Registered Education Savings Plan (RESP) is a contract between an individual (the subscriber) and a person or organization (the promoter).

Depending on the contract, the subscriber names one or more beneficiaries (the future student(s)) and agrees to make contributions for them, and the promoter agrees to pay the beneficiaries Educational Assistance Payments (EAPs).

Family plans are the only RESPs that allow subscribers to name more than one beneficiary. Each beneficiary must be related, by blood or adoption, to each of the living subscribers or must have been related to a deceased original subscriber.

The subscriber (or someone acting for the subscriber) generally makes contributions to an RESP. The subscriber cannot deduct the contributions on their income tax and benefit return.

The promoter generally pays the contributions and the income earned on these contributions to the beneficiaries. Earned income is paid in the form of Educational Assistance Payments (EAPs).

If contributions are not paid to the beneficiaries, the promoter usually refunds them to the subscriber at the end of the contract. The subscriber does not include the contributions in their income when the promoter refunds them.

Beneficiaries generally receive the contributions and EAPs from the promoter. They must include the EAPs in their income for the year they receive them. However, they do not have to include the contributions they have received in their income.

The Canada Revenue Agency registers the education savings plan contract as an RESP. The cumulative limit on the amount that can be contributed for each beneficiary is defined by the Income Tax Act (see RESP Contribution Limits). Unless it is a specified plan, no contributions can be made to an RESP (except for transfers from another RESP) at any time after the end of the year that includes the 31st anniversary of the plan’s opening. In addition, the plan must terminate by the end of the year that includes the 35th anniversary of its opening.

Here’s an overview of how an RESP works.

• A subscriber enters into an RESP contract with a promoter and names one or more beneficiaries.
• The subscriber makes contributions to the RESP. Government grants (if applicable) are paid into the RESP. These grants can be the Canada Education Savings Grant (CESG), the Canada Learning Bond (CLB), or any designated provincial education savings program.
• The RESP promoter administers all amounts paid into the RESP. The accumulated income is tax-free as long as it remains in the RESP. The promoter ensures that RESP payments are made according to the terms of the RESP.
• The promoter can return the contributions made to the subscriber, tax-free.
• The promoter can make payments to the beneficiary to pay for post-secondary education.
• The promoter can make accumulated income payments.

https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/registered-education-savings-plans-resps.html

🎓 Example: Maximum RESP Contributions in Québec

Assumptions

• Lifetime contribution limit: $50,000 per child.

• Contributions are made regularly to maximize annual grants.

• Federal CESG (Canada Education Savings Grant) lifetime maximum: $7,200.

• Québec provincial QESI (Quebec Education Savings Incentive) lifetime maximum: $3,600.

• Time horizon: from the child’s birth until age 17.

1. Annual contributions

• To receive the maximum annual CESG grant of $500, you must contribute $2,500 per year.

• Québec adds 10% of $2,500 = $250 as a provincial grant.

So each year:

• Parent’s contribution: $2,500

• Federal grant: $500

• Provincial grant: $250

• Total added to the RESP: $3,250

2. Total grants

• The CESG (federal) reaches its maximum of $7,200 after about 14.4 years ($500 per year).

• The QESI (provincial) reaches its maximum of $3,600 after about 14.4 years ($250 per year).

So after about 15 years of contributing $2,500/year:

• Parent’s contributions: $36,000

• Federal grants: $7,200

• Provincial grants: $3,600

• Total before growth: $46,800

3. If the parent contributes the full $50,000

• After 15 years, all grants are maximized.

• The parent can still add $14,000 more (to reach $50,000), but no additional grants are received.

So the totals become:

• Parent’s contributions: $50,000

• Grants (federal + provincial): $10,800 ($7,200 + $3,600)

• Total base: $60,800 (before investment growth).

4. With investment growth (5% annual return assumption)

If all contributions + grants are invested in a balanced portfolio earning 5% net annually, and deposits are made yearly:

• By age 18, the RESP could grow to $90,000 – $100,000, depending on the exact timing of contributions.

Summary

In short: by contributing the full $50,000, a parent in Québec could realistically turn it into nearly $100,000 for their child’s education, thanks to government grants and compound investment growth.

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