RESP changes in 2007

Summary of the "Registered Education Savings Plan - An improved education plan!" article (in French only)
Mes finances - Ma caisse
Vol. 44, No. 4: September-October 2007

At the beginning of the year, the governments of Canada and Quebec announced substantial changes to the Registered Education Savings Plan (RESP).

Refundable tax credit

The Quebec government has introduced a refundable tax credit, also called a Quebec education savings grant. The tax credit is deposited directly in the RESP for any contribution made since February 21, 2007. It corresponds to 50% of the Canadian Education Savings Grant (CESG).

• Maximum annual amount
  $250 (additional $50 for middle-income and low-income families).
• Maximum cumulative grant
  $3,600
• Maximum unused grant room Limited to $250 per year starting in 2007. Must not exceed the maximum annual grant amount set at $500.

Contribution limit

The lifetime RESP contribution limit has been increased from $42,000 to $50,000.
The annual contribution limit of $4,000 has been eliminated.

Canadian grant

This grant is based on the contributions you make to the RESP account of a beneficiary under age 18.

• Maximum annual amount
  The maximum annual amount for the basic grant, set at 20% of the contribution amount, has increased from $400 to $500 per child.
• Maximum unused grant room
  The amount of unused grant room that can be carried forward is $400 per year before 2007 and $500 per year starting in 2007.
• Annual grant limit
  This limit, which includes unused grant room, has increased from $800 to $1,000.

Read the complete article (in French only, PDF format, 78 KB)