Lower Income Families Encouraged to Save for Children’s Post-Secondary Education

TORONTO,ON — More lower-income Canadian families than ever are saving money to ensure that their children will benefit from a college or university education, thanks to the Federal Government’s Canada Learning Bond (CLB) program. By far the largest proportion of these families acquired their CLB grants because they had started a Registered Education Savings Plan with a group scholarship plan dealer. Most of these dealer companies are members of the RESP Dealers Association of Canada (RESPDAC).

According to new figures released by Human Resources and Skills Development Canada (HRSDC), in 2011, 268,300 children received $79.02 million in Canada Learning Bond payments. This number includes 93,984 children who received the CLB for the first time, and represents a 15.8% increase in first-time recipients, over 2010.

“Our members are very proud of the fact that we make an extra effort to make lower-income families in Canada aware of the CLB, as well as the Canada Education Savings Grant, which applies to all families,” said Peter Lewis, Chair of RESPDAC. “Nevertheless, there are still hundreds of thousands of families who could benefit from the CLB, and it’s unfortunate that they haven’t yet taken advantage of it. The CLB is a great incentive to begin a process that might well make post-secondary education attainable and affordable for those who might never consider it otherwise.”

The Canada Learning Bond was introduced by the Government of Canada in 2005. Upon applying, the Bond is given to children of families that are eligible to receive the National Child Benefit Supplement (NCBS), and who have opened an RESP account. The CLB does not require any contributions from parents and is deposited directly into the child’s RESP. Specifically, an initial CLB grant of $500 is given to children born after December 31, 2003 plus an additional $100 per year until age 15, up to a maximum of $2,000.

Since inception of the program, 386,925 children have received a Canada Learning Bond grant. Of these beneficiaries, 371,137 (95.9%) had also had at least one contribution to their RESPs, totalling $1.2 billion in additional savings.

“What this means is that these families have begun to supplement the money they received from the Government with their own funds,” Mr. Lewis explained. “These are families with very restricted incomes, so putting their own money into an RESP means that they clearly want their child or children to take advantage of higher education – and the improved career opportunities that higher learning can provide.

“One of the ways that our member companies help in this process is by making these families aware of RESPs and the government programs that work with them, through our sales and marketing efforts.”

HRSDC’s most recent Annual Statistical Review indicated that group scholarship plan providers accounted for 37.9% of payments made to CLB-eligible families in 2011, more than all other providers of education savings plans. Group plans marketed by RESPDAC member companies account for just under 30% of more than $31 billion in total RESP assets in Canada. Over more than fifty years since group plans were first introduced to the Canadian public, a total of $3.78 billion in Education Assistance Payments has been distributed to nearly two million Canadian students, by members of RESPDAC.



The Registered Education Savings Plan Association of Canada represents five of the leading providers of group scholarship plans. Group plans are different from individual RESPs, in that contributions are made by subscribers according to agreed-upon savings schedules. The money contributed is entered into a pool with others subscribers’ funds, is invested and grows over time, and then is paid out in the form of Education Assistance Payments when the beneficiary is enrolled in a college or university program. More than $9 billion is currently invested in group scholarship plans managed by RESPDAC members.

For more information:
James Deeks
Executive Director
RESP Dealers Association of Canada