Canada Learning Bond: No RESP contributions required
Author: Sound Choices
September 25, 2020
Education Savings: What you need to know about the Canada Learning Bond (CLB)
The content in the article below is meant for Canadian investors only.
The CLB is a grant that the federal government deposits directly into an RESP every year if the child is eligible, even if the parents don’t add any money.
How much is the CLB?
The first year: $500 (plus $25 to help cover the costs of opening the RESP)
The following years: $100 for each year that the child is eligible – until the calendar year in which they turn 15
Lifetime maximum: $2,000 per beneficiary
Who is eligible for the CLB?
Any child born on or after January 1, 2004 if they are Canadian residents and have a valid Social Insurance Number.
In 2018, 3.3 million children were eligible for the Canada Learning Bond, but only about 38% or 1.3 million actually received it.*
Is there a maximum income level?
Beginning July 1, 2017**, eligibility for the Canada Learning Bond is based, in part, on the number of qualified children and the adjusted income of the primary caregiver.†
Eligibility thresholds†† (July 1, 2020 to June 30, 2021)
Number of qualified children
Adjusted income
1 to 3
Up to $48,535
4
Less than $54,764
5
Less than $61,016
6
Less than $67,268
Note: Beneficiaries from larger families with higher adjusted income may also be eligible for the CLB.
How do I apply for the CLB?
Ensure your tax returns are up to date
Open an RESP with the child named as a beneficiary – make sure the RESP provider can handle the CLB as not all do
Apply for the CLB – it must be the primary caregiver or their partner who applies
Once the application is approved, the appropriate amount will be deposited directly into that RESP every year that the child is eligible to receive it.
For more information on RESPs, visit AGF.com/RESP or contact your financial advisor.
* Source: 2018 Annual Statistical Review, Canada Education Savings Program, Employment and Social Development Canada.
** Source: https://www.canada.ca/en/employment-social-development/services/learning-bond/eligibility.html. From July 1, 2016, to June 30, 2017, a child was eligible for the CLB if the primary caregiver would have otherwise received the National Child Benefit Supplement for the child, had it continued to be paid for that period. For years prior to July 1, 2016, a child was eligible for the CLB if the primary caregiver received the National Child Benefit Supplement for the child.
† Adjusted income includes the income of the primary caregiver’s cohabiting spouse or common-law partner.
Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed; their values change frequently and past performance may not be repeated.
Commissions, management fees and expenses all may be associated with investing in ETFs. Exchange-traded funds are not guaranteed, their values change frequently and past performance may not be repeated. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. There is no guarantee that ETFs will achieve their stated objectives and there is risk involved in investing in the ETFs. Before investing you should read the prospectus or relevant ETF Facts and carefully consider, among other things, each ETF’s investment objectives, risks, charges and expenses. A copy of the prospectus and ETF Facts is available on AGF.com.
The commentaries contained herein are provided as a general source of information and should not be considered personal investment or tax advice. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change investment decisions arising from the use or reliance on the information contained here.
The contents of this Web site are provided for informational and educational purposes, and are not intended to provide specific individual advice including, without limitation, investment, financial, legal, accounting or tax. Please consult with your own professional advisor on your particular circumstances.
AGF Management Limited (“AGF”), a Canadian reporting issuer, is an independent firm composed of wholly owned globally diverse asset management firms. AGF’s investment management subsidiaries include AGF Investments Inc. (“AGFI”), AGF Investments America Inc. (“AGFA”), Highstreet Asset Management Inc. (“Highstreet”), AGF Investments LLC (formerly FFCM LLC) (“AGFUS”), AGF International Advisors Company Limited (“AGFIA”), Doherty & Associates Ltd. (“Doherty”) and Cypress Capital Management Ltd. (“CCM”). AGFI, Highstreet, Doherty and Cypress are registered as portfolio managers across various Canadian securities commissions, in addition to other Canadian registrations. AGFA and AGFUS are U.S. registered investment advisers. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. AGF investment management subsidiaries manage a variety of mandates composed of equity, fixed income and balanced assets.
® The “AGF” logo and “Sound Choices” are registered trademarks of AGF Management Limited and used under licence.
About AGF Management Limited
Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF’s suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.
