Don’t leave money on the table
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Insights and Market Perspectives

Don’t leave money on the table

Author: Sound Choices

September 13, 2018

Back to School series:
Are you taking advantage of the government incentives?

The content in the below article is meant for Canadian investors only.


A Registered Education Savings Plan (RESP) is a tax-sheltered investment plan that can help families save for their children’s post-secondary education.

RESP savings can be supplemented with government education savings initiatives – but in 2016, 3.4 million children were not benefiting from any education savings incentives*, even though those RESP grants can make a significant difference in the value of their savings!

Tale of two families** 

1. Invest in a non-registered account

  • Paul and Susan invested $100 bi-weekly into a non-registered account
  • This investment doesn’t qualify for the Canada Education Savings Grant (CESG)

Paul and Susan contribute $46,800 to a non-registered account and have a total investment value of $70,801 after 18 years.

2. Invest in an RESP

  • John and Cathy also invested $100 bi-weekly – but into an RESP account
  • This investment qualifies for the CESG – 20% of their monthly contributions

John and Cathy also contribute $46,800 but have a total investment value of $97,059 after 18 years – $26,258 more because of the maximum CESG of $7,200.

Key Facts about the Canada Education Savings Grant (CESG)

  • All RESPs are eligible for Basic CESG
  • The Government of Canada will match a percentage of your RESP contributions by depositing the CESG directly into the RESP
  • The basic CESG provides 20 cents on every dollar you contribute, up to a maximum of $500 (20% of the first $2,500 of annual contributions per beneficiary) per year
  • $7,200 Lifetime CESG maximum per beneficiary
  • CESG paid into a Family Plan RESP may be used by any beneficiary of the RESP to a lifetime maximum of $7,200 per beneficiary
  • If you cannot make a contribution in any given year, you can carry over unused Basic CESG. By contributing more than $2,500 in subsequent years, you can get up to $1,000 of Basic CESG per calendar year if unused CESG amounts are available
Additional Resources


Talk to a financial advisor to learn how they can help you and visit

* Source: 2016 Annual Statistical Review, Canada Education Savings Program, Employment and Social Development Canada. The number of beneficiaries who have ever received Additional CESG is being used as a representation for children from middle- and low income families who have benefited from RESP funds. However, Canadians who opened an RESP before the introduction of the Additional CESG in 2005 would have had to subsequently request the Additional CESG. Given that some Canadians may not have made the new request for the Additional CESG, the numbers being used to represent middle- and low-income families are considered to be understated.
** Source: AGF Investment Operations. Both examples are based on bi-weekly contributions of $100 (for a total of $2,600 over 12 months) and exclude fees. For the RESP example, John and Cathy received the Canada Education Savings Grant of 20% of contributions to a maximum of $500 per year. Paul and Susan invested in a non-registered account that consisted of only interest earnings and assumes a marginal tax rate of 40%. Paul and Susan paid taxes on their non-registered investment at the beginning of the 17th week each year except the first year. Growth of investments for both families is based on the assumption of a 6% average annual compound rate of return over 18 years. The rate of return is used only to illustrate the effects of the compound growth rate and is not intended to reflect future values or returns on investments. Mutual funds are not guaranteed; their values change frequently and past performance may not be repeated.
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.

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.

For further information, please visit

© 2018 AGF Management Limited. All rights reserved.

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