Canada Education Savings Act (S.C. 2004, c. 26)

Act current to 2019-06-20 and last amended on 2018-01-01. Previous Versions

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

 This Act may be cited as the Canada Education Savings Act.

Interpretation

Marginal note:Definitions

  •  (1) The definitions in this subsection apply in this Act.

    Canada child benefit

    Canada child benefit means a deemed overpayment under Subdivision A.1 of Division E of Part I of the Income Tax Act. (allocation canadienne pour enfants)

    Canada Learning Bond

    Canada Learning Bond means the bond payable or paid under section 6. (bon d’études)

    CES grant

    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

    child tax benefit[Repealed, 2016, c. 12, s. 107]

    first threshold

    first threshold for a particular year means the dollar amount referred to in paragraph 117(2)(a) of the Income Tax Act, as adjusted under that Act for the particular year. (premier seuil)

    national child benefit supplement

    national child benefit supplement[Repealed, 2016, c. 12, s. 107]

    prescribed

    prescribed means prescribed by regulations. (Version anglaise seulement)

    primary caregiver

    primary caregiver means

    • (a) in the case of a beneficiary who is a qualified dependant, 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)

    second threshold

    second threshold for a particular year means the higher dollar amount referred to in paragraph 117(2)(b) of the Income Tax Act, as adjusted under that Act for the particular year. (deuxième seuil)

  • Marginal note:Income Tax Act expressions

    (2) Unless a contrary intention appears, in this Act

    • (a) the expressions adjusted income, cohabiting spouse or common-law partner, eligible individual and qualified dependant have the meanings assigned by section 122.6 of the Income Tax Act;

    • (b) the expressions beneficiary, contribution, designated provincial program, 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.

  • 2004, c. 26, s. 2
  • 2010, c. 12, s. 30
  • 2016, c. 12, s. 107
  • 2017, c. 20, s. 117

Purpose

Marginal note:Purpose

 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

 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

 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

  •  (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 Canada child benefit in respect of January in the particular year is the first threshold for the particular year 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 Canada child benefit in respect of January in the particular year is more than the first threshold for the particular year but not more than the second threshold for the particular year, 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:Eligible individual — first month

    (5) If there has been no determination of eligibility for a Canada child 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 Canada child 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:Change in care

    (6.1) If, in a month following January in a particular year, an individual who was not the primary caregiver of a beneficiary in January of that year becomes the beneficiary’s primary caregiver, then the adjusted income to be used for the purposes of subsection (4) in respect of contributions made to the trustee of the trust designated by that individual or their cohabiting spouse or common-law partner is the adjusted income used to determine the amount of a Canada child benefit for the first month in the particular year in respect of which the individual’s eligibility for the Canada child benefit has been established.

  • Marginal note:Change in care in December

    (6.2) In applying subsection (6.1) in respect of a beneficiary for whom the individual becomes the beneficiary’s primary caregiver in December, the reference to “the first month in the particular year in respect of which the individual’s eligibility for the Canada child benefit 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 or the primary caregiver’s cohabiting spouse or common-law partner at that time.

  • Marginal note:More than one designated trust

    (7.1) If there is more than one trust designated under subsection (7) at the time a contribution is made, the amount referred to in subsection (4) is to be paid to the trustee of the trust to which a contribution is first made.

  • Marginal note:Additional grant less than maximum amount

    (7.2) For greater certainty, if there is more than one trust designated under subsection (7) and the total of all amounts paid under subsection (4) to the trustee of the trust to which a contribution is first made is less than the maximum amount that may be paid under subsection (4), then amounts may be paid under subsection (4) to the trustee of any trust designated under subsection (7).

  • (8) [Repealed, 2010, c. 12, s. 31]

  • 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
  • 2010, c. 12, s. 31
  • 2011, c. 24, s. 148
  • 2016, c. 12, s. 108
  • 2017, c. 20, s. 118

Marginal note:Canada Learning Bonds

  •  (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 is a person less than 15 years of age at the beginning of the month immediately before the benefit year, or is born during the benefit year or during the month immediately before it, and, for at least one month in that year,

      • (i) is a qualified dependant of an eligible individual whose adjusted income used to determine the amount of a Canada child benefit was,

        • (A) if the eligible individual has not more than three qualified dependants, less than or equal to the first threshold for the particular year in which the benefit year begins, or

        • (B) if the eligible individual has more than three qualified dependants, less than the amount determined in accordance with subsection (2.1), or

      • (ii) is a person in respect of whom a special allowance under the Children’s Special Allowances Act is payable, 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, for at least one month in that year, is a person to whom subparagraph (a)(i) or (ii) applies.

  • Marginal note:Formula

    (2.1) For the purposes of clause (2)(a)(i)(B), the amount is determined by the formula

    A + [(B + C + (D × E))/Y]

    where

    A
    is the amount determined by the formula

    F — (B/0.122)

    where

    F
    is the first threshold for the particular year in which the benefit year begins, and
    B
    is $2,308.27,
    B
    is $2,308.27,
    C
    is $2,041.94,
    D
    is $1,942.55,
    E
    is the number of qualified dependants in excess of two, and
    Y
    is 0.333.
  • Marginal note:Annual adjustment

    (2.2) The amounts expressed in dollars in subsection (2.1) are to be adjusted, as set out in section 117.1 of the Income Tax Act, for each particular year after 2016.

  • Marginal note:Adjustment for a benefit year

    (2.3) The amounts adjusted under subsection (2.2) that are to be used in respect of a benefit year are those amounts so adjusted for the particular year in which that benefit year begins.

  • Marginal note:Restriction

    (2.4) A Canada Learning Bond is, other than for the purposes of section 14 of the Canada Education Savings Regulations, not to be paid in respect of any beneficiary

    • (a) more than once in the beneficiary’s lifetime under paragraph 6(2)(a); and

    • (b) more than once in respect of a benefit year under paragraph 6(2)(b).

  • Marginal note: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, the primary caregiver’s cohabiting spouse or common-law partner or, if the beneficiary is 18 years of age or more, 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.

  • 2004, c. 26, s. 6
  • 2016, c. 12, s. 109
  • 2017, c. 20, s. 119

Marginal note:Conditions

 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

 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

 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

  •  (1) On application made by the primary caregiver of the beneficiary, the primary caregiver’s cohabiting spouse or common-law partner or, if the beneficiary is 18 years of age or more, 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 Canada child benefit or for a special allowance under the Children’s Special Allowances Act.

  • 2004, c. 26, s. 9.1
  • 2016, c. 12, s. 110
  • 2017, c. 20, s. 120

General

Marginal note:Recovery of payments and interest

 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.

 [Repealed, 2005, c. 34, s. 83]

Marginal note:Authority to enter into agreements with provinces

  •  (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:Collection of information

 If the Minister considers it advisable, the Minister may, subject to conditions agreed on by the Minister and the Minister of National Revenue, collect the Social Insurance Number of any registered education savings plan subscriber as well as any prescribed information, for the administration of section 146.1 and Parts X.4 and X.5 of the Income Tax Act.

  • 2007, c. 35, s. 176

Marginal note:Regulations

 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;

  • (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; and

  • (l) specifying information that the Minister may collect under section 12.1.

  • 2004, c. 26, s. 13
  • 2007, c. 35, s. 177

Transitional Provisions

Marginal note:Agreements

 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.

Marginal note:Applications for benefit years before July 1, 2016

  •  (1) The provisions of this Act, of the Income Tax Act and of any regulations made under those Acts, as they read immediately before July 1, 2016, apply to an application for a Canada Learning Bond made in respect of any benefit year, within the meaning of subsection 6(3) of this Act, before that date.

  • Marginal note:Applications for benefit year 2016-2017

    (2) The provisions of this Act, of the Income Tax Act and of any applicable regulations made under those Acts, as they read immediately before July 1, 2017, apply to an application for a Canada Learning Bond made in respect of the benefit year, within the meaning of subsection 6(3) of this Act, starting on July 1, 2016.

  • 2016, c. 12, s. 112

Consequential Amendments

Access to Information Act

 [Amendment]

 [Amendment]

Children’s Special Allowances Act

 [Amendment]

 [Amendment]

Department of Human Resources Development Act

 [Amendment]

Income Tax Act

 [Amendment]

 [Amendments]

 [Amendment]

Coming into Force

Marginal note:Order in council

Footnote * 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.]

RELATED PROVISIONS

  • — 2010, c. 12, ss. 30(3), (4)

      • 30 (3) Subsection (1) applies to 2009 and subsequent years.

      • (4) Subsection (2) applies to the 2007 and subsequent years.

  • — 2010, c. 12, s. 31(4)

      • 31 (4) Subsections (1) to (3) apply to 2009 and subsequent years.

Date modified: