1. Overview
The Canada Learning Bond is money that the Government of Canada deposits into a Registered Education Savings Plan (RESP) to help you save for a child’s education after high school. The total amount the Government deposits can be up to $2,000. Applying for and receiving the Canada Learning Bond will not affect any other benefits that you or an eligible child receives.
Through the Canada Learning Bond, the Government will add money to the RESP for an eligible child every year, even if you do not add any money.
An RESP is an education savings account set up with a financial institution like a bank or a credit union, or group plan dealer. The money in the RESP will grow tax free until it can be used for expenses related to their studies in:
- apprenticeship programs
- CEGEPs
- colleges
- trade schools; or
- universities
2. Eligibility
The Canada Learning Bond (CLB) is available to children from low-income families who also:
- born on or after January 1, 2004
- are residents of Canada; and
- have a valid Social Insurance Number
It is the primary caregiver (PCG) or, as of January 2018, their cohabiting spouse or common-law partner, who must request the CLB on behalf of an eligible child.
The PCG is the person who is eligible to receive the Canada Child Benefit.
Children in care, for whom a Children’s Special Allowance is payable, automatically qualify for the Canada Learning Bond.
3. How much a child could receive
A child could receive a total of up to $2,000 in a Registered Education Savings Plan (RESP) to help pay for their education after high school.
This includes:
- $500 for the first year of eligibility; and
- $100 for each year they remain eligible, until the calendar year they turn 15
In addition, the Government of Canada will deposit $25 in an RESP to help cover the costs of opening the plan.
A child can get the Canada Learning Bond in an RESP even if you do not contribute any money to the plan.
4. What you need before you start
Before you apply for the Canada Learning Bond on behalf of a child, you will need:
- a Social Insurance Number (SIN) for yourself; and
- a SIN for the child
There is no fee to get a SIN from Service Canada, but you will need to provide certain documents, such as a birth certificate or permanent residence card.
5. Apply
You must open a Registered Education Savings Plan (RESP), through an RESP provider, before you can apply for the Canada Learning Bond on behalf of a child.
Not all RESP providers offer the Canada Learning Bond, so make sure that your provider does.
Once your application is approved, the Government of Canada will directly deposit the Canada Learning Bond into the RESP every year that the child is eligible.
If you contribute to the RESP, the child could also qualify for the Canada Education Savings Grant and the additional amount of Canada Education Savings Grant.
6. After you’ve applied
An RESP can stay open for 35 years. This means the child can still use the Canada Learning Bond (as well as any Canada Education Savings Grant and provincial education savings incentives) in the RESP if they decide to delay their studies after high school until later in life.
If the child does not continue their education after high school and you choose to close the RESP:
- any amount you contributed to your RESP goes back to you
- the Canada Learning Bond is returned to the Government of Canada; and
- the Canada Education Savings Grant is returned to the Government of Canada, and any provincial education savings incentives will be returned to the provinces
Interest earned in the RESP can:
- be returned to you
- be rolled over into your or your spouse’s Registered Retirement Savings Plan
- be rolled over into the child’s Registered Disability Savings Plan; or
- gifted to a designated educational institution
If you would like more information on various programs, deductions and credits that can help save you money, contact The Lions Accounting Group Ltd., Chartered Professional Accountants at 604 926 3522.
