RESP in 2026: Education Grants and the Rules Worth Knowing
A Registered Education Savings Plan (RESP) is a registered account designed to help families save for a child's eligible post-secondary education.
Although RESP contributions are not tax-deductible, government grants and investment earnings can generally accumulate on a tax-deferred basis while they remain in the plan.
One of the main advantages of an RESP is access to government education savings incentives. However, available grants depend on the child's eligibility, family income, province of residence, contributions, and applicable program rules.
Understanding these benefits, along with the account's contribution and withdrawal rules, can help families make informed decisions about education savings.
1. Government Education Savings Incentives
Several federal and provincial programs may contribute to an eligible child's RESP.
| Incentive | General Amount | Personal Contributions Required? |
|---|---|---|
| Basic Canada Education Savings Grant (CESG) | 20% of eligible contributions, generally up to $500 annually; combined lifetime CESG maximum of $7,200 | Yes |
| Additional CESG | Additional 10% or 20% on the first $500 of eligible annual contributions, depending on adjusted family income | Yes |
| Canada Learning Bond (CLB) | Up to $2,000 for eligible children from lower-income families | No |
| BC Training and Education Savings Grant (BCTESG) | One-time $1,200 for eligible BC children, subject to the application window and program availability | No |
Each incentive has separate eligibility requirements. Not every RESP provider offers every government grant.
2. How the CESG Works
The Basic Canada Education Savings Grant generally provides an additional 20% on eligible RESP contributions.
For example, contributing $2,500 during a calendar year normally generates $500 in Basic CESG, provided the beneficiary meets the applicable requirements.
Families with unused Basic CESG entitlement from previous years may be able to catch up. With sufficient eligible contributions and available entitlement, the Basic CESG can reach $1,000 in a calendar year.
Additional CESG Based on Family Income
Some families may qualify for additional CESG payments.
For 2026, the additional grant is calculated on the first $500 of eligible annual RESP contributions as follows:
| 2026 Adjusted Family Income | Additional CESG Rate | Maximum Additional Grant |
|---|---|---|
| $58,523 or less | 20% | $100 |
| More than $58,523, up to $117,045 | 10% | $50 |
| More than $117,045 | 0% | $0 |
This additional grant is paid on top of the Basic CESG when eligibility requirements are met.
However, the combined lifetime CESG limit is $7,200 per beneficiary, including both Basic and Additional CESG.
Special contribution-history requirements apply when a child is 16 or 17 years old. Families should not assume that opening an RESP shortly before the child's 18th birthday will qualify for the same grant opportunities as starting earlier.
3. Canada Learning Bond: No Personal Contribution Required
The Canada Learning Bond (CLB) provides education savings support for eligible children from lower-income families.
The lifetime maximum is $2,000 per eligible child, subject to program requirements.
Unlike CESG, the CLB does not require families to contribute their own money to an RESP.
Eligibility depends on factors such as family income, residency, and the child's Social Insurance Number (SIN).
Families may need to open an RESP with a participating provider and request the benefit to receive available CLB payments.
Automatic CLB Enrolment Beginning in 2028
Beginning in April 2028, the federal government is scheduled to automatically open RESPs for certain eligible children born in 2024 or later who are not already named as beneficiaries of an RESP by age four.
Eligibility includes additional requirements relating to family income, a valid SIN, and the primary caregiver's tax filing and Canada Child Benefit eligibility.
This does not mean that all children will automatically receive the CLB.
Families who currently qualify do not need to wait until 2028 to apply through a participating RESP provider.
4. BC Training and Education Savings Grant
The BC Training and Education Savings Grant (BCTESG) provides a one-time $1,200 contribution to the RESP of an eligible child.
Under the program's existing rules, applications are generally accepted from the child's sixth birthday until the day before their ninth birthday.
The child and a parent or guardian must meet BC residency and other eligibility requirements. The RESP provider must also participate in the program.
Families do not need to make a personal RESP contribution to receive this grant.
Important program update: BC's 2026 Budget states that the BCTESG will be discontinued effective April 1, 2028.
Families considering an application should confirm current eligibility, deadlines, and program availability directly with the Province of British Columbia and a participating financial institution.
5. RESP Contributions, Investments, and Withdrawals
The lifetime RESP contribution limit is generally $50,000 per beneficiary across all RESPs established for that child.
There is no general annual contribution limit, although government grant eligibility is subject to annual and lifetime rules.
An RESP can hold different eligible investments. Investment returns are not guaranteed, and the account may experience losses depending on its holdings.
When the beneficiary enrolls in an eligible post-secondary education program, funds may generally be withdrawn in two categories.
Educational Assistance Payments (EAPs)
EAPs consist of government grants and investment earnings. They are generally included in the student's taxable income.
For qualifying full-time studies, EAP withdrawals are generally limited to $8,000 during the first 13 consecutive weeks of enrolment. For qualifying part-time studies, a $4,000 limit generally applies during the relevant 13-week period.
Different rules, exceptions, and provider requirements may apply.
Withdrawal of Contributions
Amounts originally contributed to the RESP can generally be withdrawn without income tax because those contributions were made using after-tax funds.
However, the timing and purpose of contribution withdrawals may affect grant entitlements, repayment requirements, and plan administration.
Families should confirm the relevant rules with their RESP provider before withdrawing funds.
6. What If the Child Does Not Pursue Post-Secondary Education?
An RESP does not necessarily need to be closed immediately if the beneficiary decides not to pursue eligible studies.
Depending on the account and circumstances, available options may include:
- Keeping the RESP open within the permitted plan lifetime.
- Changing the beneficiary when eligibility and plan rules allow.
- Withdrawing original contributions.
- Returning unused government grants as required.
- Withdrawing accumulated investment income or transferring eligible amounts to an RRSP when the relevant conditions are met.
Accumulated Income Payments (AIPs) can result in income tax and additional tax unless an applicable exception or qualifying transfer is available.
The appropriate option depends on the type of RESP, the beneficiary's circumstances, available contribution room, and applicable tax rules.
7. What Should Families Compare Before Opening an RESP?
An RESP is more than a way to receive government grants. Account features and investment arrangements can affect how effectively the funds can be used.
Before selecting a provider, consider:
- Government grants: Does the provider support the CESG, CLB, and any applicable provincial grants?
- Investment options: What investments are available, and what risks do they carry?
- Costs: Are there account fees, investment management expenses, or other charges?
- Withdrawal flexibility: What rules apply when the child begins eligible studies?
- Plan restrictions: Does the RESP have additional conditions, particularly if it is a group scholarship plan?
Government grants can contribute meaningfully to education savings, but they do not guarantee that the investments held within an RESP will earn a positive return.
The Bigger Picture
An RESP can help families prepare for future education costs while potentially benefiting from government savings incentives and tax-deferred investment growth.
However, the amount contributed, available grants, investment risk, account costs, and withdrawal rules should all be considered together.
The purpose of an RESP is not simply to maximize government grants, but to build an education savings arrangement that fits the family's financial circumstances and the child's future needs.