With August here, many of us are juggling summer wrap-ups and back-to-school prep. It's also a good moment to reflect on education savings. RESPs can make a real difference for families planning ahead. If RESPs are not on your radar, don't worry we have our Monthly Market Update covered too.

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RESPs: Saving - and Withdrawing - Smarter for Education

When it comes to investing and building your savings, there are a range of account types that suit different purposes and goals.

A Registered Education Savings Plan (RESP) is an education savings plan that is registered with the Canada Revenue Agency (CRA). It is a government-registered account designed to help you save for a child's education after high school. An RESP can be opened by a parent (the "subscriber"), and the funds grow tax-deferred until they are withdrawn by the student (the "beneficiary"). RESPs are a powerful way to save for a child's post-secondary education, but knowing how and when to withdraw is just as important as knowing how to save.

Why it matters:

• Leverage granting dollars: The Canada Education Savings Grant (CESG) adds 20% to your contributions (up to $500/year, $7,200 lifetime per child). Lower-income families may also qualify for the Canadian Learning Bond (CLB).
• Tax-smart growth: Investments grow tax-free until withdrawn. With student withdrawals often taxed at little or no cost, due to their lower income, an RESP can be a great tool for school expenses. Use this Tax planning checklists for students to take advantage of tax credits and deductions that may also be available.
• Flexibility: Funds can be used for university, college, trade school, or certain international programs.
• Avoid over contributing: The lifetime contribution limit is $50,000 per beneficiary; excess amounts are subject to penalties.
• Timing: Contributions must be made between January 1 and December 31 to be eligible for that year. Note: Grant room can be carried forward.

When withdrawing: Once the beneficiary student has graduated from high school and enrolled full-time or part-time in a qualifying post-secondary educational program, the subscriber may request to withdraw money.

• Proof of Enrolment: is required in order to process Educational Assistance Payment. Acceptable proof of enrolment includes the following information:
• • Student’s full name (student permanent school ID without full name is not acceptable)
  • Semester/term start date
  • Name of post-secondary educational institution (abbreviation such as U of T is acceptable)
  • Additional information that confirms the student is enrolled
• Educational Assistance Payments (EAPs): This portion of the RESP include grants and investment income; taxed in the student's (subscriber's) name. Withdraw more while they have little or no income to minimize taxes.
• Your contributions: Can be withdrawn tax-free anytime - but to get the most out of the plan, wait until they are in school.
• Not attending school?: You keep your contributions, but unused grants are returned to the government.

Types of RESPs:

• Individual Plan: One beneficiary; ideal if you are saving for a single child.
• Family Plan: Multiple beneficiaries; best for families with more than one child; as grants and earnings can be shared.

An RESP is one of the most powerful, tax-advantaged ways to save for your child's future education. By starting early, contributing consistently, and taking full advantage of government incentives, you can help ensure your child steps into their post-secondary journey with confidence.

August Market Update

The lazy days of summer may be fading, but the headlines have been anything but quiet. From tariff deadlines to inflation jitters, there’s been no shortage of news this summer. Despite the busier than usual news cycle, the global economy and markets have shown resilience. Below, we discuss what big government moves are coming down the pipeline, how companies and consumers have fared this summer, and how we have positioned your portfolio.

In this week’s Global Insight Weekly, the spotlight is on Germany’s massive new spending plan and what it could mean for Europe and beyond. Germany is breaking from its reputation for tight budgets and announced a massive 500 billion Euro spending package over the next 10 years. Much of that money is being pushed out quickly. Projects include rail upgrades, housing initiatives, digital investments, education, and defense spending. By 2026, this front-loaded approach will create Germany’s biggest budget deficit in years but also one of the strongest “growth boosts” the euro area has seen in a long time. Germany is the EU’s biggest economy, so when it spends the whole region feels the lift. For investors, this is less about today's scorecard and more about skating to where the puck is going - positioning ahead of the growth impulse that could ripple across Europe over the next decade.

Closer to home, U.S. companies are still burning through pre-tariff inventories, which has kept consumer prices steady for now. But wholesale prices are already climbing which means the next stage could be tougher for both businesses and shoppers. In Canada the picture is calmer. Inflation eased in July, helped by the rollback of the carbon tax earlier this year. Nearly all Canadian exports to the US remain duty-free and the Bank of Canada seems comfortable keeping rates where they are. If inflation pressures re-emerge the path forward could become more volatile. We've positioned portfolios with this in mind - maintaining equity exposure but leaning towards high quality, global companies that can withstand short-term volatility.

Against this backdrop, attention has turned back to corporate earnings and how companies have adapted. Companies have reported strong growth in the first half the year. Automakers and some retailers are feeling the pinch, but tech and AI firms continue to deliver solid results, helping keep the overall market momentum intact. Looking ahead, strong earnings growth is still expected in the second half of the year and 2026 but trade uncertainty remains a risk.

As summer winds down, markets are holding their ground. But with tariffs feeding through and inflation pressures building, the months ahead could bring more bumps. Opportunities abroad continue to look attractive and we have already made strategic shifts to gain exposure to these markets. Staying “invested, but watchful” remains a sensible stance as we continue to monitor developments in trade policy and corporate earnings.

Next Steps:

• If this blog generates new ideas or questions about your family's goals don't hesitate to contact us.
• We are very passionate about supporting financial literacy at any age. Please contact us to arrange a meeting with our team and access this Financial literacy guide that provides a generational approach.
• Share this blog with your friends and family.