Canada Education Savings Act

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 This Act may be cited as the Canada Education Savings Act. Definitions The definitions in this subsection apply in this Act. 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 means the bond payable or paid under section 6. (bon d’études) 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 (subvention pour l’épargne-études) child tax benefit[Repealed, 2016, c. 12, s. 107] first threshold for a particular year means the dollar amount referred to in paragraph 117(2)(a) of the Income Tax Act, as adjusted under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 (premier seuil) national child benefit supplement[Repealed, 2016, c. 12, s. 107] prescribed means prescribed by regulations. (Version anglaise seulement) primary caregiver means in the case of a beneficiary, or a child referred to in subsections 6(1.1) to (1.3) and section 12.2, who is a qualified dependant, the eligible individual in respect of the beneficiary or child; and in the case of a beneficiary, or a child referred to in subsections 6(1.1) to (1.3) and section 12.2, 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 or child. (responsable) 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) Income Tax Act expressions Unless a contrary intention appears, in this Act 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; 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 any other expression has the meaning assigned by the Income Tax Act. 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. 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. 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. CES grants 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. Amount of grant The amount of a CES grant that may be paid for a particular year at any time is equal to the lesser of 20% of the contribution, and the amount, if any, by which the lesser of $1,000, unless the particular year is any of 1998 to 2006, in which case, $800, and the beneficiary’s unused CES grant room for the particular year at that time exceeds 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. Unused CES grant room The unused CES grant room for a beneficiary for a particular year at any time is if the beneficiary was 17 years of age or older at the end of the preceding year, nil; or in any other case, determined by the formula 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 an ineligible beneficiary in accord-ance with the regulations, or (ii)not resident in Canada, not resident in Canada, 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 (ii)not resident in Canada, and not resident in Canada, and 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. Additional amount of grant The amount of a CES grant that may be paid for a particular year at any time is increased by the lesser of the amount that is 20% 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 the first threshold for the particular year or less, or 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 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 the amount by which $100, in the case of a beneficiary referred to in subparagraph (a)(i), or $50, in the case of a beneficiary referred to in subparagraph (a)(ii) 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. Eligible individual — first month 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. Beneficiary born in December 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”. Change in care 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. Change in care in December 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”. Designation 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. More than one designated trust 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. Additional grant less than maximum amount 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). [Repealed, 2010, c. 12, s. 31] Restriction Subsection (4) applies only to contributions made in 2005 or a subsequent year. Lifetime cap Not more than $7,200 in CES grants may be paid in respect of a beneficiary during their lifetime. Canada Learning Bonds 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. Notice — automatic enrolment If the Minister determines that a child born after 2023 would be eligible to have a Canada Learning Bond paid in their respect if they were a beneficiary under a registered education savings plan, the child’s Social Insurance Number is provided to the Minister and the child is not, to the Minister’s knowledge, a beneficiary under such a plan, the Minister must notify the child’s primary caregiver — in the form and manner that the Minister considers appropriate — that the child is eligible to have a Canada Learning Bond paid in their respect and that the Minister will open a registered education savings plan in respect of the child in accordance with subsections (1.2) and (1.3) for the purpose of paying the Canada Learning Bond. Opening of registered education savings plan by Minister Subject to subsection (1.3), if the Minister determines that a child born after 2023 would be eligible to have a Canada Learning Bond paid in their respect if they were a beneficiary and the Minister is provided with the child’s Social Insurance Number, the Minister must open a registered education savings plan in respect of the child if the child is less than three years of age on the day the Minister determines that the child is eligible, no earlier than the day on which the child reaches the age of four or no earlier than any other day determined by the Minister; or if the child is three years of age or more on the day the Minister determines that the child is eligible, no earlier than the day that is 365 days after the day on which the Minister determines that the child is eligible or no earlier than any other day determined by the Minister. Exception The Minister must not open a registered education savings plan in respect of a child under subsection (1.2) if the child’s primary caregiver or the primary caregiver’s cohabiting spouse or common-law partner has communicated to the Minister, in the form and manner approved by the Minister, their refusal of the payment of a Canada Learning Bond in respect of the child or if the child is a beneficiary. For greater certainty For greater certainty, an application may be made to the Minister under subsection (1) in respect of a person even if a refusal referred to in subsection (1.3) was communicated to the Minister in respect of that person. Amount of bond The amount of a Canada Learning Bond is equal to the sum of the following amounts: $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, is a qualified dependant of an eligible individual whose adjusted income used to determine the amount of a Canada child benefit was, 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 if the eligible individual has more than three qualified dependants, less than the amount determined in accordance with subsection (2.1), or is a person in respect of whom a special allowance under the Children’s Special Allowances Act is payable, and $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. Formula For the purposes of clause (2)(a)(i)(B), the amount is determined by the formula is the amount determined by the formula is the first threshold for the particular year in which the benefit year begins, and is $2,308.27, is $2,041.94, is $1,942.55, is the number of qualified dependants in excess of two, and is 0.333. Annual adjustment 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. Adjustment for a benefit year 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. 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 more than once in the beneficiary’s lifetime under paragraph 6(2)(a); and more than once in respect of a benefit year under paragraph 6(2)(b). Meaning of benefit year 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. 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. Additional payment 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. 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 the Minister is provided with the Social Insurance Number of the beneficiary; 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 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. Administration of registered education savings plans The Minister may enter into an agreement with a person respecting the administration of a registered education savings plan opened under subsection 6(1.2) or any other registered education savings plan identified by the Minister. The agreement may provide for the payment of remuneration by the Minister to the person for the administration of the plan. Interest The Minister may, in prescribed circumstances, pay interest, determined in accordance with prescribed rules, in respect of CES grants or Canada Learning Bonds. Payments out of C.R.F. All amounts payable by the Minister under this Act, the regulations or an agreement entered into under section 7.1 or 12 must be paid out of the Consolidated Revenue Fund. Waiver 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. 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. 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] Authority to enter into agreements with provinces 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. Fees and charges 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. Amounts charged The amounts of the fees or charges referred to in subsection (2) may not exceed the cost of providing the service. Amounts received 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). 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. Collection of Social Insurance Number The Minister may collect the Social Insurance Number of any person who, as determined by the Minister, would be eligible to have a Canada Learning Bond paid in their respect if they were a beneficiary and, if the person is a child, the Social Insurance Number of the child’s primary caregiver and the primary caregiver’s cohabiting spouse or common-law partner. 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 respecting any matter or thing that by this Act is to be or may be prescribed or otherwise determined under the regulations; 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; 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; respecting the notice referred to in subsection 6(1.1), including providing for the maximum age of a child in respect of whom a notice is to be provided under that subsection; respecting the opening of registered education savings plans by the Minister under subsection 6(1.2), including providing for the maximum age of a child in respect of whom such a plan may be opened under that subsection; respecting the refusal referred to in subsection 6(1.3); respecting the administration of the registered education savings plans referred to in section 7.1; respecting agreements made under section 7.1, including specifying terms and conditions to be included in such agreements; 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; 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; specifying terms and conditions to be included in agreements entered into between promoters of registered education savings plans and the Minister; 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; governing or prohibiting the sharing of CES grants or Canada Learning Bonds, and the earnings generated on them; specifying circumstances under which all or part of any amount paid under this Act is to be repaid to the Minister; 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; 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 specifying information that the Minister may collect under section 12.1. 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. Applications for benefit years before July 1, 2016 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. Applications for benefit year 2016-2017 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. [Amendment] [Amendments] Order in council 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. [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.] Subsection (1) applies to 2009 and subsequent years. Subsection (2) applies to the 2007 and subsequent years. Subsections (1) to (3) apply to 2009 and subsequent years. Subsection 6(1) of the Act is replaced by the following: Canada Learning Bonds — application 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 31 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 Canada Learning Bond is to be paid on any terms and conditions that the Minister may specify by agreement between the Minister and the trustee. [In force] Section 6 of the Act is amended by adding the following after subsection (1.4): Canada Learning Bonds — automatic enrolment If the Minister opens a registered education savings plan under subsection (1.2), subject to this Act and the regulations, the Minister may, in respect of the beneficiary under the plan, pay to a trustee of a trust governed by the plan a Canada Learning Bond for the benefit of the trust. The Canada Learning Bond is to be paid on any terms and conditions that the Minister may specify by agreement between the Minister and the trustee. Subsection 6(4) of the Act is replaced by the following: The amount of a Canada Learning Bond payable under subsection (1) 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. The portion of section 7 of the Act before paragraph (a) is replaced by the following: Neither a CES grant nor a Canada Learning Bond payable under subsection 6(1) may be paid in respect of a beneficiary under a registered education savings plan unless The Act is amended by adding the following after section 7: Conditions — automatic enrolment A Canada Learning Bond payable under subsection 6(1.5) must not be paid in respect of a beneficiary under a registered education savings plan unless the beneficiary is resident in Canada immediately before the payment is made. Section 13 of the Act is amended by adding the following after paragraph (c.3): respecting payments under subsection 6(1.5);