If you have kids or grandkids, the Registered Education Savings Plan is one of the best deals in the Canadian tax system — and a surprising number of families leave part of it unclaimed.

Here’s the headline: the federal government adds 20 cents for every dollar you contribute, through the Canada Education Savings Grant (CESG), on the first $2,500 per child per year. That’s up to $500 a year of free money, and up to $7,200 over the child’s lifetime. No other account hands you an instant 20% return.

Missed a year? You can catch up — one year’s worth at a time. Contribute $5,000 in a single year and you’ll collect $1,000 in grants ($500 for this year, $500 for one unused year). But you can only ever catch up one year per year, so falling two years behind takes two years to fix. The grant deadline is December 31st each year, which makes mid-year the perfect moment to check where you stand.

A few things worth knowing: contributions themselves aren’t tax-deductible, but growth inside the RESP is tax-sheltered, and when the money comes out for school, it’s taxed in the student’s hands — usually at a very low rate. There’s a $50,000 lifetime contribution limit per child, but no annual limit beyond what earns the grant.

And if the child doesn’t pursue post-secondary? The grants go back, but your contributions come back to you tax-free, and up to $50,000 of the growth can be rolled into your RRSP.

The real cost of waiting isn’t just the missed growth — it’s the grant money that can never be recovered once a catch-up year slips by.

Want to see what steady RESP contributions could grow into by the time the kids are ready? Try our Investment Goal Planner. And if you’d like help setting up or catching up an RESP, get in touch — I’m happy to walk through it.