Canada Education Savings Act
S.C. 2004, c. 26
Assented to 2004-12-15
An Act to provide financial assistance for post-secondary education savings
Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:
Short Title
Marginal note:Short title
1 This Act may be cited as the Canada Education Savings Act.
Interpretation
Marginal note:Definitions
2 (1) The definitions in this subsection apply in this Act.
Canada Learning Bond
bon d’études
Canada Learning Bond means the bond payable or paid under section 6. (bon d’études)
CES grant
subvention pour l’épargne-études
CES grant means a Canada Education Savings grant payable or paid under section 5 or under Part III.1 of the Department of Human Resources Development Act, as it read immediately before the coming into force of section 19 of this Act. (subvention pour l’épargne-études)
child tax benefit
prestation fiscale pour enfants
child tax benefit means a deemed overpayment under Subdivision a.1 of Division E of Part I of the Income Tax Act. (prestation fiscale pour enfants)
national child benefit supplement
supplément de la prestation nationale pour enfants
national child benefit supplement means that portion of a child tax benefit determined under the description of C in subsection 122.61(1) of the Income Tax Act. (supplément de la prestation nationale pour enfants)
prescribed
Version anglaise seulementprescribed means prescribed by regulations. (Version anglaise seulement)
primary caregiver
responsable
primary caregiver means
(a) in the case of a beneficiary who is a qualified dependant in respect of whom a child tax benefit is payable, the eligible individual in respect of the beneficiary; and
(b) in the case of a beneficiary in respect of whom a special allowance is payable under the Children’s Special Allowances Act, the department, agency or institution that maintains the beneficiary. (responsable)
Marginal note:Income Tax Act expressions
(2) Unless a contrary intention appears, in this Act
(a) the expressions adjusted income, eligible individual and qualified dependant have the meanings assigned by section 122.6 of the Income Tax Act;
(b) the expressions beneficiary, contribution, promoter, registered education savings plan, subscriber and trust have the meanings assigned by section 146.1 of the Income Tax Act; and
(c) any other expression has the meaning assigned by the Income Tax Act.
Purpose
Marginal note:Purpose
3 The purpose of this Act is to encourage the financing of children’s post-secondary education through savings, from early childhood, in registered education savings plans.
Marginal note:Informational and promotional activities
3.1 The Minister shall take measures necessary to carry out the purpose set out in section 3, including making known to Canadians, through informational and promotional activities, the existence of CES grants and Canada Learning Bonds and any terms and conditions.
Designation of Minister
Marginal note:Power of Governor in Council
4 The Governor in Council may designate a member of the Queen’s Privy Council for Canada to be the Minister for the purposes of this Act.
Payments
Marginal note:CES grants
5 (1) Subject to this Act and the regulations, on application to the Minister in a form and manner approved by the Minister, the Minister may, in respect of any contribution made in 1998 or a subsequent year to a registered education savings plan by or on behalf of a subscriber under the plan in respect of a beneficiary under the plan who is less than 17 years of age at the end of the year preceding the contribution, pay to a trustee of a trust governed by the plan a CES grant for the benefit of the trust. The payment is to be made on any terms and conditions that the Minister may specify by agreement between the Minister and the trustee.
Marginal note:Amount of grant
(2) The amount of a CES grant that may be paid for a particular year at any time is equal to the lesser of
(a) 20% of the contribution, and
(b) the amount, if any, by which the lesser of
(i) $1,000, unless the particular year is any of 1998 to 2006, in which case, $800, and
(ii) the beneficiary’s unused CES grant room for the particular year at that time
exceeds
(iii) the total of all CES grants paid before that time — other than those amounts paid under subsection (4) — in respect of contributions made in the particular year in respect of the beneficiary.
Marginal note:Unused CES grant room
(3) The unused CES grant room for a beneficiary for a particular year at any time is
(a) if the beneficiary was 17 years of age or older at the end of the preceding year, nil; or
(b) in any other case, determined by the formula
$400A + $500B - C
where
- A
- is the number of years after 1997 and before 2007 in which the beneficiary was alive, other than a year throughout which the beneficiary was
(i) an ineligible beneficiary in accord-ance with the regulations, or
(ii) not resident in Canada,
- B
- is the number of years after 2006 in which the beneficiary was alive, up to and including the particular year, other than a year throughout which the beneficiary was
(i) an ineligible beneficiary in accord-ance with the regulations, or
(ii) not resident in Canada, and
- C
- is the total of all CES grants paid before that time — other than those amounts paid under subsection (4) — in respect of contributions made in a preceding year in respect of the beneficiary.
Marginal note:Additional amount of grant
(4) The amount of a CES grant that may be paid for a particular year at any time is increased by the lesser of
(a) the amount that is
(i) 20% of the contribution, if the beneficiary
(A) is a qualified dependant of an eligible individual whose adjusted income used to determine the amount of a child tax benefit in respect of January in the particular year is $35,000 or less, or
(B) is a person in respect of whom a special allowance under the Children’s Special Allowances Act is payable for at least one month in the particular year, and
(ii) 10% of the contribution, if the beneficiary is a qualified dependant of an eligible individual whose adjusted income used to determine the amount of a child tax benefit in respect of January in the particular year is more than $35,000 but not more than $70,000, and
(b) the amount by which
(i) $100, in the case of a beneficiary referred to in subparagraph (a)(i), or
(ii) $50, in the case of a beneficiary referred to in subparagraph (a)(ii)
exceeds
(iii) the total of all amounts paid under this subsection before that time in respect of contributions made in the particular year in respect of the beneficiary.
Marginal note:No determination for January
(5) If there has been no determination of eligibility for a child tax benefit in respect of January in a particular year, the adjusted income to be used for the purposes of subsection (4) is the adjusted income used to determine the amount of a child tax benefit for the first month in the particular year in respect of which eligibility has been established.
Marginal note:Beneficiary born in December
(6) In applying subsection (5) in respect of a beneficiary born in December, the reference to “the first month in the particular year in respect of which eligibility has been established” in that subsection is to be read as a reference to “January of the next year”.
Marginal note:Designation
(7) The amount referred to in subsection (4) is to be paid to the trustee of a trust designated, in the form and manner approved by the Minister, by the primary caregiver of the beneficiary at the time the contribution is made.
Marginal note:Indexing
(8) The amounts $35,000 and $70,000 referred to in subsection (4) are to be adjusted for each year that is after 2004 in the manner set out in section 117.1 of the Income Tax Act.
Marginal note:Restriction
(9) Subsection (4) applies only to contributions made in 2005 or a subsequent year.
Marginal note:Lifetime cap
(10) Not more than $7,200 in CES grants may be paid in respect of a beneficiary during their lifetime.
- 2004, c. 26, s. 5
- 2007, c. 29, s. 37
Marginal note:Canada Learning Bonds
6 (1) Subject to this Act and the regulations, on application to the Minister, in the form and manner approved by the Minister, the Minister may, in respect of a beneficiary under a registered education savings plan who was born after 2003 and is less than 21 years of age at the time of the application, pay to a trustee of a trust governed by the plan a Canada Learning Bond for the benefit of the trust. The bond is to be paid on any terms and conditions that the Minister may specify by agreement between the Minister and the trustee.
Marginal note:Amount of bond
(2) The amount of a Canada Learning Bond is equal to the sum of the following amounts:
(a) $500 in respect of the first benefit year in which the beneficiary
(i) is a person less than 15 years of age at the beginning of the month immediately before the benefit year, or
(ii) is born during the benefit year or during the month immediately before it,
and in respect of whom a national child benefit supplement, or a special allowance under the Children’s Special Allowances Act, is payable for at least one month in that year, and
(b) $100 in respect of any subsequent benefit year in which the beneficiary is a person less than 15 years of age at the beginning of the month immediately before the benefit year and in respect of whom a supplement or an allowance referred to in paragraph (a) is payable for at least one month in that year.
Meaning of benefit year
(3) In this section, benefit year means the period that starts on July 1 in one year and ends on June 30 of the next year.
Marginal note:Designation
(4) The amount of a bond in respect of a benefit year is to be paid to the trustee of a trust designated, in the form and manner approved by the Minister, by the primary caregiver of the beneficiary or, if the beneficiary is 18 years of age or more, by the beneficiary.
Marginal note:Additional payment
(5) When the Minister pays the amount under paragraph (2)(a), the Minister may, in prescribed circumstances, pay into the trust an additional amount determined in accordance with the regulations in recognition of the cost of administering registered education savings plans.
Marginal note:Conditions
7 Neither a CES grant nor a Canada Learning Bond may be paid in respect of a beneficiary under a registered education savings plan unless
(a) the Minister is provided with the Social Insurance Number of the beneficiary;
(b) the Minister is provided with the Social Insurance Number of the individual, or the business number of the department, agency or institution, that made a designation under subsection 5(7) or 6(4); and
(c) the beneficiary is resident in Canada, in the case of a CES grant, at the time the contribution to the plan is made and, in the case of a Canada Learning Bond, immediately before the payment is made.
Marginal note:Interest
8 The Minister may, in prescribed circumstances, pay interest, determined in accordance with prescribed rules, in respect of CES grants or Canada Learning Bonds.
Marginal note:Payments out of CRF
9 All amounts payable by the Minister under this Act, the regulations or an agreement entered into under section 12 shall be paid out of the Consolidated Revenue Fund.
Marginal note:Waiver
9.1 (1) On application made by the primary caregiver of the beneficiary or, if the beneficiary is 18 years of age or more, by the beneficiary, the Minister may, to avoid undue hardship, waive any of the requirements of this Act or the regulations that relate to the payment of CES grants or Canada Learning Bonds and that are specified in regulations made under paragraph 13(g). The application must be in the form and manner approved by the Minister.
Marginal note:Restriction
(2) Despite subsection (1), the Minister may not waive any requirement related to the determination of eligibility for a child tax benefit or a national child benefit supplement, or for a special allowance under the Children’s Special Allowances Act.
General
Marginal note:Recovery of payments and interest
10 An amount required to be repaid to the Minister under this Act, the regulations or under an agreement entered into under this Act, other than an agreement referred to in section 12, and any interest due in respect of the amount constitute a debt due to Her Majesty in right of Canada and is recoverable as such in the Federal Court or any other court of competent jurisdiction.
11 [Repealed, 2005, c. 34, s. 83]
Marginal note:Authority to enter into agreements with provinces
12 (1) The Minister may, with the approval of the Minister of Finance, enter into agreements with the government of any province to administer provincial programs consistent with the purpose of this Act.
Marginal note:Fees and charges
(2) An agreement entered into under subsection (1) may include provisions respecting the fees or charges to be paid for a service provided by or on behalf of the Minister under the agreement.
Marginal note:Amounts charged
(3) The amounts of the fees or charges referred to in subsection (2) may not exceed the cost of providing the service.
Marginal note:Amounts received
(4) Subject to conditions imposed by the Treasury Board, any amounts received by the Minister for services may be used by the Minister for administering the provincial programs referred to in subsection (1).
Marginal note:Regulations
13 The Governor in Council may make regulations for carrying out the purpose and provisions of this Act and, without limiting the generality of the foregoing, may make regulations
(a) respecting any matter or thing that by this Act is to be or may be prescribed or otherwise determined under the regulations;
(b) establishing conditions that must be met by a registered education savings plan and by persons in respect of the plan before a CES grant or a Canada Learning Bond may be paid in respect of the plan;
(c) establishing the manner of determining the amount of a CES grant that may be paid in respect of contributions to registered education savings plans or the amount of a Canada Learning Bond that may be paid into those plans;
(d) specifying terms and conditions to be included in agreements entered into between a trustee under a registered education savings plan and the Minister relating to the terms and conditions applicable to the payment of a CES grant or a Canada Learning Bond and specifying, for inclusion in the agreements, in addition to any other conditions that the Minister considers appropriate, the obligations of a trustee under an agreement;
(e) prescribing the circumstances in which an additional amount may be paid under subsection 6(5) and establishing the manner of determining the amount of the payment;
(f) specifying terms and conditions to be included in agreements entered into between promoters of registered education savings plans and the Minister;
(g) specifying the requirements of this Act or the regulations relating to the payment of CES grants or Canada Learning Bonds that may be waived by the Minister to avoid undue hardship;
(h) governing or prohibiting the sharing of CES grants or Canada Learning Bonds, and the earnings generated on them;
(i) specifying circumstances under which all or part of any amount paid under this Act is to be repaid to the Minister;
(j) specifying circumstances under which the earnings generated on Canada Learning Bonds repaid under regulations made under paragraph (i) are to be repaid to the Minister and establishing the manner of determining the amount of those earnings; and
(k) establishing, for the purpose of determining an amount required to be repaid under this Act in respect of CES grants or Canada Learning Bonds, the manner of determining the portion, if any, of an educational assistance payment made under a registered education savings plan that is attributable to CES grants or Canada Learning Bonds, as the case may be.
Transitional Provision
Marginal note:Agreements
14 Every agreement entered into under Part III.1 of the Department of Human Resources Development Act that is in force immediately before the coming into force of section 5 of this Act is deemed to be an agreement entered into under that section and continues in force until it terminates.
Consequential Amendments
Access to Information Act
15 [Amendment]
16 [Amendment]
Children’s Special Allowances Act
17 [Amendment]
18 [Amendment]
Department of Human Resources Development Act
19 [Amendment]
Income Tax Act
20 [Amendment]
21 [Amendments]
22 [Amendment]
Coming into Force
Marginal note:Order in council
Footnote *23 The provisions of this Act, other than sections 4, 12, 17 and 20 to 22, come into force on a day or days to be fixed by order of the Governor in Council.
Return to footnote *[Note: Sections 4, 12, 17 and 20 to 22 in force on assent December 15, 2004; Act, other than sections 4, 12, 17 and 20 to 22, in force July 1, 2005, see SI/2005-51.]
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