Editor’s note: This guest blog post was authored by David Swol, Director General of the Canada Education Savings Program (CESP).
Since 1998, the Government of Canada has been providing incentives to encourage early and sustained saving for a child's post-secondary education through the Canada Education Savings Program (CESP). As one of the longest-running examples of a national asset-based program, the CESP is pleased to have this opportunity to share some of our successes and ongoing challenges with our colleagues in the asset-building policy community. To give a sense of the scale of our efforts, note that the population of Canada is about 35 million – just a bit less than that of California.
Our program uses Registered Education Savings Plans (RESPs), the equivalent of US 529 plans. RESPs allow assets to grow tax-free, and the savings can be used for full- or part-time studies in any type of post-secondary education: university, community college, trade school, or an apprenticeship program. RESPs can be opened through most banks, other financial institutions, or specialized RESP dealers across the country; and a wide variety of investment options and features are available. RESPs are also exempt from asset tests for social assistance in all Canadian jurisdictions.