DEFINITION of Canada Learning Bond

The Canada Learning Bond is funded by the Canadian government as part of a program to help less privileged families send their children to college. This bond has a maximum benefit of $2,000 per child.

BREAKING DOWN Canada Learning Bond

The Canada Learning Bond was instituted in 2004 by the Canadian Minister of Finance. Unfortunately, only a small percentage of eligible Canadian families took advantage of this program. As a result, the government has made efforts to increase publicity for the bond. This program depends largely on the National Child Benefit Program to determine eligibility for aid.

How to Apply for the Canada Learning Bond and Who Is Eligible

As of July 2017, eligibility for the Canada Learning Bond is based on the income of the primary caregiver and cohabitating spouse or common law partner, if any, and the number of qualifying children in the household. Children are qualified if they were born on or after January 1, 2004 and are legal residents of Canada.

Once a citizen has been deemed eligible for aid, the government will deposit up to $2,000 into a registered education savings plan (RESP) for each child, regardless of whether or not the parent contributes. The funds will be paid annually until the child is 15 or is no longer eligible, with $500 being deposited the first year, followed by annual $100 deposits the following years.

To apply, first set up an RESP with a provider that accepts Canada Learning Bond payments (not all providers do). If you already have an RESP established for your child or children, confirm they participate in the program, then submit your application for consideration. The application will ask for a social insurance number (SIN) for you and your child or children, as well as a permanent residence card or birth certificate.

What Happens if Your Child Does Not Use the Funds

Canada Learning Bond funds do not have to be used immediately upon graduating from high school. An RESP can be kept open for 35 years. If even after that length of time the funds have not been used, or if you decide sooner they will never be used, the funds given through the Canada Learning Bond will be returned to the Government of Canada and any funds you contributed are returned to you. The interest earned in the account can be given to an educational institution, rolled into your registered retirement plan or your child's registered disability savings plan, or returned to you.