Taking Notes: Eye on Education – RESP’s Benfit the Rich!

Taking Notes: Eye on Education – RESP’s Benfit the Rich!

This column will focus on educational issues affecting post-secondary students. It will address a wide range of topics. Students are encouraged to submit suggestions and educational topics they are concerned about, or personal experiences with courses or university situations they feel other students should know about.


In an amazing flash of insight, a new Statistics Canada survey has “revealed” that the federal government’s education savings plan program “disproportionately benefits higher-income families.” According to the survey’s findings, the Canada Education Savings Grants implemented by Paul Martin’s education budget in 1998 are flowing to “high-income families least in need of financial help.”

Under the grant program, the federal government gives 20 cents for every dollar contributed to a child’s Registered Education Savings Plan to a maximum of $400 a year. Of the 50 percent of children under age 18 who had savings set aside for them last year, seven out of ten came from families with incomes above $80,000 a year. These families managed to save a median amount of $7000 a year. Only one-fourth of families earning less than $25,000 were able to save toward their children’s’ education – and the median savings were $2400 – not even enough to cover a single year’s tuition.

According to UBC economist Kevin Milligan, who analyzed the survey data; families in the high-income brackets were four times more likely to contribute to an RESP, and were also able to contribute amounts that were three times greater than those in lower income brackets. These larger contributions resulted in high-income families receiving a significantly disproportionate chunk of the $342.9 million matching government grant money. Milligan appeared surprised at his own analysis, stating, “What’s interesting is that the supposed goal of this program is to improve access to post-secondary education for families who have trouble, but the program is used primarily by high-income families – families least in need of help to access post-secondary education. So the outcome of the program is strongly at odds with its goal” (Sarah Schmidt, CanWest News, Nov. 21/03).

The Canadian Federation of Students (CFS) and the Canadian Alliance of Student Associations (CASA) are not surprised. They’ve been among the most vocal in denouncing the obvious flaws of the RESP/CESG program since its inception, calling it a “wealth-based,” “rich kids’ funding” system that benefits those who can afford to save. Paul Martin has assured CASA that he will make accessibility of post-secondary education a top priority in his government. If he plans on using his RESP/CESG program to do so, those of us who don’t belong to Martin’s rich man’s club will be out of luck.

For more information see:

The Edmonton Journal, November 21, 2003. “Better-off families make more use of education savings plan: Study pegs university cost at $11,200 per year.” Sarah Schmidt, CanWest News.

Statistics Canada: Survey of Approaches to Educational Planning. http://stcwww.statcan.ca/english/sdds/4442.htm

SUDS Conference July, 2003, D.Jabbour, The Voice, August 27-September 17, 2003 issues.

CASA: “Help us make Paul Martin keep his word”. http://www.casa.ca/ecampaign.asp

Canadian Federation of Students Campaigns & Lobbying: Registered Education Savings Plans.

CESG Canada Education Savings Grant Program