The Green Party of Canada would, if elected, eliminate the Registered Education Savings Plan (RESP).
The party’s platform, released earlier this month, discussed broad plans to “make college and university tuition free for all Canadian students” through a variety of measures.
The RESP measure wasn’t included in the platform document, but is included in its platform costing document, which was released on Wednesday.
A major element of the free-tuition plan would be eliminating the RESP. This would carry an initial cost of nearly $1.5 billion in 2019-2020 but result in increased savings in subsequent years, with projected savings of nearly $1.4 billion in 2024-2025.
A Green Party representative said in an email that the party “is proposing to eliminate tuition fees, [and] invest $10 billion in post-secondary education. We believe this removes the need for RESPs. Cutting it helps provide revenue.”
RESPs are designed to help save for a child’s future post-secondary education. Individual and family plans are available, and incentives such as the Canada Education Savings Grant (CESG) and Canada Learning Bond are tied to the plans.
Once a child is attending post-secondary, funds withdrawn from an RESP can be used to pay for tuition as well as other school costs, such as books, tools and administration fees.
The Green Party representative contacted by Advisor’s Edge didn’t provide detail on how current RESP balances would be treated or whether government grants that have already been given would need to be repaid. The representative also didn’t comment on how students’ non-tuition costs would be paid for if RESPs were eliminated.
However, the representative did say that the Green Party would “introduce the change in a manner that would not penalize those who have been saving for their children’s educations.”
According to a 2017 annual statistical review of the Canada Education Savings Program, total RESP assets had reached $55.9 billion by 2017, up from $23.4 billion 10 years earlier. By the end of 2017, nearly 4 million had received a CESG.
Last week, the Conservative Party of Canada announced its plans to boost RESP grants and raise the maximum lifetime grant limit.