Canada Education Savings Grant (CESG)

The Canada Education Savings Grant (CESG) is free money from the federal government that gets deposited directly into a child’s RESP. For every dollar you contribute to an RESP, the government adds 20 cents, up to a maximum of $500 per year per child. Over a child’s lifetime, the CESG can add up to $7,200 in total grant money.

How it works

The basic CESG matches 20% of the first $2,500 you contribute to an RESP each year. Contribute $2,500 and the government adds $500. Contribute $1,000 and they add $200. The match stops at $2,500 in contributions per year for the basic grant.

If you miss a year or contribute less than $2,500, unused grant room carries forward. In a future year, you can receive up to $1,000 in CESG (on $5,000 in contributions) to catch up. The lifetime maximum of $7,200 per child still applies regardless.

Lower-income families may qualify for an additional CESG amount. Depending on household income, the match on the first $500 contributed can increase to 30% or 40%, adding an extra $50 or $100 per year.

When contributions make sense

Because the CESG is essentially a guaranteed 20% return on your first $2,500, it’s often one of the best deals available to Canadian families. Even if you’re deciding between contributing to your own TFSA or a child’s RESP, the grant match makes the RESP worth serious consideration.

The child must be under 18 for contributions to attract the CESG, and the grant is available until the end of the calendar year they turn 17. There are some conditions for 16- and 17-year-olds: the RESP must have received at least $2,000 in contributions before the end of the year the child turned 15. Planning ahead matters. For a full walkthrough, see our RESP guide.

Example

You open an RESP when your child is born and contribute $2,500 every year. Each year, the government adds $500 in CESG. After 14 years of consistent contributions, you’ve put in $35,000, and the government has added $7,000 in grants. If the investments grew at an average of 7% annually, the RESP could be worth over $75,000 by the time your child starts post-secondary. That $7,000 in free grant money alone could have grown to over $12,000.