Withdrawals from a Registered Education Savings Plan (RESP) are different than those from other registered plans. With an RESP, some withdrawals are taxable, while others are not.

This means you need to do some tax planning when you withdraw funds.


An RESP account consists of two pools of funds. One pool is exclusively your original contributions, from which you make non-taxable withdrawals. You can withdraw from this pool anytime, whether or not it’s for education costs.

The other pool is composed of Canada Education Savings Grant (CESG) funds, any other provincial grant funds and plan earnings. Withdrawals from this pool, called educational assistance payments, are taxable to the student. It’s very important to use up this pool by graduation. Otherwise, you will be required to return the remaining grant money to the government and could pay tax and a penalty on plan earnings.

Whenever you make an RESP withdrawal, you specify how much to take from each pool.


Here are strategies to use in different situations to minimize or eliminate tax on RESP withdrawals.


    • Non-taxable withdrawals from a pool of original contributions
    • Sometimes called a refund of contributions or post-secondary education payment


    • Withdrawals from a pool of CESG funds, provincial grant funds and plan earnings
    • Taxable to the student

When income is low, take educational assistance payments. Some students never have to worry about paying taxes on RESP withdrawals. They can take educational assistance payments and not owe tax because that amount plus their annual earned income is less than their basic personal amount and tuition tax credit. They can use up that pool, and then take withdrawals of contributions.

When income is high, take withdrawals of contributions. A student could be in a taxable position if they have a paid internship, co-op work term or well-paying spring and summer job. In such a year, taking withdrawals of contributions means your child won’t pay tax on RESP withdrawals. Just be aware that this strategy is only effective if you’ll still be able to take all available educational assistance payments by graduation.

An exception to the rule. What if education costs will be much lower than expected? Perhaps you accounted for residence and off-campus housing costs, but your child chooses a local university and lives at home. Or you covered expenses for a university degree and your child takes a two-year college program. In this case, you may be better off taking educational assistance payments even if your child must pay tax on the withdrawals. You want to use this pool. Any tax at your child’s rate is better than forfeiting grant money and facing a greater tax bill later. Remember that funds remaining in the pool of original contributions can be withdrawn at any time tax-free.

This material was prepared for and published on behalf of your financial advisor and is intended only for clients resident in the jurisdiction(s) where their representative is registered. This material is provided solely for informational and educational purposes and is not to be construed as an offer or solicitation for the sale or purchase of any securities or as providing individual investment, tax or legal advice. Consult your professional advisor(s) prior to acting on the basis of this material. Insurance products are available through advisors registered with applicable insurance regulators. Individual equities are available only through representatives of Assante Capital Management Ltd. In considering any particular investment, please remember that past performance is no guarantee of future performance. Although this material has been compiled from sources believed to be reliable, we cannot guarantee its accuracy or completeness. All opinions expressed and data provided herein are subject to change without notice. Neither CI Assante Wealth Management or its dealer subsidiaries Assante Capital Management Ltd. and Assante Financial Management Ltd., nor their affiliates or their respective officers, directors, employees or advisors are responsible in any way for any damages or losses of any kind whatsoever in respect of the use of this material. CI Assante Wealth Management is a registered business name of Assante Wealth Management (Canada) Ltd. Assante Capital Management Ltd. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada. Assante Financial Management Ltd. is a member of the Mutual Fund Dealers Association of Canada and the MFDA Investor Protection Corporation (excluding Quebec). © 2022 CI Assante Wealth Management. All rights reserved.