Submitted by: Glen Izzard, CIM; Investment Advisor, Portfolio Manager
Every parent or grandparent wants to give the young people in their lives the best possible start.
For many families, that means helping with the cost of post-secondary education. With tuition, books, housing, and other expenses running into the tens of thousands, the challenge is real. One of the most effective tools available in Canada to meet that challenge is the Registered Education Savings Plan (RESP).
You may already know about RESPs — but many families are missing out on their full value. Used wisely, this account isn’t just about saving money. It’s about creating opportunity.
At its simplest, an RESP is a tax-advantaged savings account designed to help fund a child’s education. Parents, grandparents, or even close family friends can contribute, and the rewards can be significant. For every dollar you put in, the federal government adds 20 cents through the Canada Education Savings Grant (CESG), providing up to $500 per year and a lifetime maximum of $7,200.
That’s free money — too good for any family to leave on the table.
Beyond the grants, the RESP allows investments to grow tax-free until the funds are needed for school. When the money is eventually withdrawn, it’s taxed in the student’s hands rather than the contributors. Since most students have little or no income, that often means little or no tax is paid. And importantly, RESPs are not limited to university tuition — they can be used for college programs, trade schools, and many recognized institutions abroad.
Going Deeper: How to Maximize the RESP
While many families understand the basics, there are strategies that can make a big difference in how much value you get from an RESP. For example, if you’ve missed a few years of contributions, the rules allow you to ‘catch up’ by doubling contributions in later years to recover unused grants.
This approach is particularly powerful for grandparents who prefer to make larger lump-sum deposits as children get older.
Another option is to set up a family RESP when there is more than one child. This type of account offers flexibility, since funds can be shared. If one child doesn’t use the full amount available, another child can benefit from the balance.
Finally, it’s worth looking closely at how the RESP is invested. Too often, these accounts sit in basic savings vehicles earning very little. Given that the typical RESP has an 18-year investment horizon, families should consider growth-oriented investments — such as stocks, mutual funds, or ETFs — so the government grant money can work harder over time.
Advisor Tip #1: Timing Matters
It’s not just about how much you contribute but when.
Contributing early in the calendar year locks in the government grant sooner and gives investments longer to grow. A simple habit — like treating RESP deposits the same way you treat RRSP or TFSA contributions — can add thousands over time.
Most people focus on saving into the RESP, but how you take money out is just as important as how you put money in. Withdrawals are divided into two categories.
The first is Educational Assistance Payments (EAPs), which consist of the government grants and the investment growth. These amounts are taxable, but they’re taxed in the student’s hands — meaning that with little or no income, the tax bill is often negligible.
The second category is the original contributions you made yourself, which can always be withdrawn tax-free.
A smart approach is to draw on the EAPs first, when students typically have minimal income, while leaving the original contributions to keep growing and available for later years. Coordinating withdrawals around a student’s part-time or summer employment can also help minimize any tax impact, ensuring more of the money stays in the family’s pocket.
Advisor Tip #2: Don’t Forget the Grandparents
Grandparents often want to help but worry about complicating things. One option is to open their own RESP for a grandchild, ensuring full control of contributions and still accessing the government grant. Communication is key, as the lifetime limit per child is $50,000.
RESP Myths Worth Clearing Up
- “If my child doesn’t go to university, I will lose the money.”
Not true. RESPs cover a wide range of programs, from colleges to trade schools. And if unused, growth can often be rolled into an RRSP (with contribution room). - “It’s too late to start.”
Also false. Even contributing in the teenage years can unlock thousands in grants — and show the child that education is a shared family priority.
Advisor Tip #3: Make Gifts Count
Instead of toys that are quickly forgotten, ask relatives to contribute to the RESP for birthdays or holidays. Over the years, those small gifts can grow into something life changing.
The real value of a RESP isn’t just financial. It’s peace of mind for parents, freedom from debt for students, and a legacy of learning for grandparents.
If you already have a RESP, revisit it — make sure you’re getting the most out of grants, timing contributions strategically, and planning withdrawals wisely. And if you haven’t opened one yet, remember: the best time to start is always now.
A RESP is more than an account — it’s a pathway to opportunity.
And that’s a gift that lasts a lifetime.
About Glen Izzard
Based in Meaford, Ontario, Glen Izzard is a Chartered Investment Manager (CIM®) and Discretionary Portfolio Manager with over 15 years of experience helping clients navigate investing, cash flow, estate planning, and retirement transitions.
Known for his client-first approach, Glen focuses on building clarity, confidence, and long-term results. An active community supporter, he serves as Treasurer for the Meaford Chamber of Commerce and as Assistant Coach with Georgian Bay Lightning Hockey. Glen’s mission is simple: provide thoughtful guidance, practical strategies, and a steady hand so clients can stay on course — financially and in life.
Please contact: (226) 909-8688 glen.izzard@optimizewealth.com www.greenpeaksecurities.ca
