Canada Gazette

On February 23, 1998, the Canada Education Savings Grant (CESG) was announced to provide an incentive for parents and others to save in registered education savings plans (RESPs) for the post-secondary education of children. Through the CESG, the Government of Canada deposits 20 cents for every dollar, up to $400 per year of education savings for children up to age 17. Since the CESG, the number of RESPs in Canada has grown from 700 000 to over 2.38 million, and nearly $2 billion of Canada Education Savings Grant has been paid.

The March 2004 federal budget announced the Canada Learning Bond (CLB) and the enhanced matching rate for the Canada Education Savings Grant as part of the government's Lifelong Learning agenda. These improved education savings incentives are designed to encourage greater participation from low- to middle-income families to open and invest in RESPs for their children's post-secondary education.

For each child born on or after January 1, 2004, a Canada Learning Bond will be paid into the child's RESP in every year that the child's family qualifies for the National Child Benefit (NCB) supplement. The first year in which the child's family qualifies for the supplement, they will be eligible for a $500 CLB. Each subsequent year that the child's family qualifies for the supplement the child will qualify for an additional $100 CLB, up to the year they reach the age of 15. The maximum CLB amount for one child is $2,000.

In addition, starting in January 2005, the CESG matching rate on the first $500 of annual RESP savings will be increased to 40 percent for children in families with a net family income of $35,000 or less (in 2004 dollars). For children in families with a net family income between $35,000 and $70,000 (in 2004 dollars), the matching rate will be 30 percent. Other Canadians who invest in RESPs will continue to receive a 20 percent match rate from the Government of Canada.

The new Canada Education Savings Regulations will facilitate the implementation of the Canada Learning Bond and the improvements to the CESG by setting out the parameters that govern the payment of these benefits into RESPs at financial institutions in Canada. The Regulations set out the rules for both the CESG program and the financial service providers that offer RESPs to the public.

These Regulations build on the CES Grant regulations, which were issued under the authority of the Department of Human Resources Development Act (DHRD). Bill C-5, which received royal assent on December 15, 2004, established the Canada Education Savings Act, which replaces the CESG legislation in Part III.1 of the DHRD Act. Accordingly, the CES Grant Regulations will also be repealed and replaced by these new Canada Education Savings Regulations.

Generally, the Regulations deal with conditions for payment for CES grants and Canada Learning Bonds, including existing regulations for ineligible beneficiaries. They also govern the apportionment of CESG and CLB to be included in educational assistance payments made out of an RESP towards the cost of post-secondary education. Terms and conditions for the administrative agreements between RESP providers and the government of Canada are also set out, including conditions for record keeping and reporting of information. Finally, the Regulations specify the circumstances that would generate repayment of CESG or CLB and the amounts of those repayments, and the rules governing transfers of CESG and Canada Learning Bonds from one RESP trustee to another.

The primary changes proposed in the new Regulations deal with the sharing of the grants, learning bonds and earnings in RESPs between children in the same family. CESGs can be shared among beneficiaries in family plans, but enhanced CESG is effectively limited to sharing with siblings only. Learning bonds are an individual entitlement that may not be shared with others. Earnings on both the enhanced CESG and CLB can effectively only be shared among siblings in a family plan. The new Regulations specify the amount of the one-time $25 payment into an RESP that is included with the first CLB installment paid under section 6 of the Act and include fairness provisions to deal with cases of undue hardship on a case-by-case basis. In addition, restrictions in the Regulations prevent RESP assets from being withdrawn after March 22, 2004 (post-Budget) and then repaid into the RESP to take advantage of the increased match rate under the new enhanced CESG for low- and middle-income families.

Since regulatory amendments are required to establish provisions on the delivery and administration of the new Canada Learning Bond and the enhanced Canada Education Savings Grant, there is no practical alternative to proceeding with them. With the new Canada Education Savings Act in force, the current regulations no longer meet the regulatory provisions in the Act to administer and deliver these new initiatives.

The Regulations establish the rules for the program, which is partly administered by our financial institution partners. The current CESG Program and these new initiatives will continue to be delivered by financial institutions and, as such, these Regulations are required to ensure consistent treatment and application of program rules. The Department also has a responsibility to ensure proper stewardship of funds which cannot be achieved by administrative means alone.

The current estimated cost in the fiscal year 2004-2005 is $85 million for the Canada Learning Bond and $20 million for the enhanced Canada Education Savings Grant. For the fiscal year 2005-2006, the estimated annual cost for the CLB is $85 million and $80 million for the enhanced CES grant. The projected annual cost upon maturity for the CLB is $325 million and $80 million for the enhanced CES grant.

The current estimated operational start-up costs for these initiatives are $37 million for the three-year period from 2004 to 2007. The program is then subject to a mandated operational review, which will establish ongoing operational costs.

It is expected with these new initiatives that more individuals from lower- to middle-income families will open RESPs for their children's post-secondary education. As this happens, children from lower- to middle-income families will have a savings base to finance their post-secondary education, thereby reducing their reliance on other forms of funding and motivating them to plan for the future. These children will have a better opportunity to continue with post-secondary education, allowing them to improve their employability.

To minimize start-up and delivery costs, these new initiatives will use the existing delivery framework through financial institutions that offer RESPs, with some modifications. The start-up and delivery costs for financial institutions that offer RESPs are not funded by the Government of Canada.

There are no additional costs associated with the Canada Education Savings Regulations, as they are simply in place to set out the parameters of the program.

Following the announcements of the 2004 federal budget, the CESG Program consulted with approximately 70 financial institutions, including banks, mutual fund companies, scholarship trust plans and their related service providers on the results of the CESG program evaluation and the underlying policy behind the new initiatives. A series of consultative sessions were held in Spring 2004 in Vancouver, Toronto and Montréal. In principle, RESP providers endorsed the Canada Learning Bond and enhanced CESG match rates; however, they stressed the need for simplicity in design and administration. In the summer, HRSDC again consulted RESP providers through a survey dealing with some specific implementation considerations and administrative challenges.

In November 2004, consultation sessions were held in major centres on draft regulations and the implementation strategy, and RESP providers were given an opportunity to comment. Responses were received from 17 providers and their comments were taken into consideration and incorporated, where possible, into the Regulations.

Comments and questions arose surrounding the administrative adjustments required to implement the new programs, but there were generally few comments on the technical or legal aspects of the Regulations. There was some disagreement on the policies surrounding the rules preventing providers from charging fees to the government portion of an RESP and concern expressed by scholarship trust dealers that they could no longer reallocate CESG and earnings from those who did not go on to post-secondary education to age cohorts who did. However, these policies were not amended, as they reflect the Government's intention to ensure that the CESG and Canada Learning Bond are available to further the education of the children for whom they were paid. Providers also indicated that tracking earnings on the Government portion of an RESP separately was unworkable, so the Regulations were structured to meet the intent that the new benefits and their earnings only remain available to siblings by restricting their payment into sibling-only RESPs.

The Regulations were adjusted to respond to the need for simplicity in the calculation of education assistance payments and to clarify the transfer and repayment regulations as noted by respondents. The Regulations were updated to permit partial transfers for Canada Learning Bonds and to ensure that grants paid in error due to income reassessments could be recovered from the current trustee, if the assets of the plan had been transferred. Finally, providers asked for clarity around the $25 additional amount which must be deposited into the child's RESP to assist the subscriber with the cost of opening a plan.

New agreements with each of the RESP trustees and the promoters will be negotiated to reflect the changes to the Canada Education Savings Act and its associated Regulations. These agreements specify the roles and responsibilities of the promoters and trustees in relation to the payment of the CES grant, the enhanced grant and the CLB. They include provisions on reporting requirements, compliance, and consequences of breach of agreement. Compliance with most of these Regulations is enforced by HRSDC through the CESG payment system. Those Regulations administered by RESP providers are enforced by agreements between these providers and the Minister.

It is expected that these provisions, as well as existing compliance mechanisms including ongoing compliance review of financial institution controls of CESG and evaluation of program results, will ensure that these Regulations are properly implemented and subsequently evaluated.

The Canada Education Savings Grant Program will develop an outreach and awareness campaign to promote effectively the CLB and enhancements to the CESG with low-income Canadians. It will complement traditional communication products and national advertising with building grass-roots outreach activities and establishing partnerships with community organizations that work with targeted groups. The outreach campaign is to ensure that the population targeted by these initiatives apply for their entitlements for their children's post-secondary education.

The outreach strategy will promote the importance of post-secondary education, increase awareness of the Canada Learning Bond (CLB) and the enhanced Canada Education Savings Grant (CESG) at the community level, improve low- and middle-income Canadians' understanding of how these education savings incentives programs fit within Registered Education Savings Plans (RESPs) and that even small amounts of savings add up over time, and encourage greater participation of all Canadians in the program.

A key component of the Outreach Strategy will include the building of partnerships between HRSDC regional and local offices, other federal departments and agencies, provincial/ territorial governments, RESP promoters and community based organizations.

Marc LeBrun, Director, Canada Education Savings Program, Learning and Literacy Directorate, Learning Branch, Human Resources and Skills Development Canada, Ottawa, Ontario K1A 0J9, (819) 997-6684 (telephone), (819) 953-6500 (facsimile).

Notice is hereby given that the Governor in Council, pursuant to section 13 of the Canada Education Savings Act (see footnote a), proposes to make the annexed Canada Education Savings Regulations.

Interested persons may make representations with respect to the proposed Regulations within 15 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to Marc LeBrun, Director, Canada Education Savings Program, Human Resources and Skills Development Canada, 140 Promenade du Portage, Phase IV, Gatineau, Quebec K1A 0J9.

"assisted contribution" means a contribution made to an RESP in respect of which a CES grant has been paid. (cotisation subventionnée)

"brother" includes a half-brother, an adopted brother and a stepbrother. (frère)

"CLB account" means an account that holds the CLB paid into an RESP in respect of a beneficiary. (compte du bon d'études)

"grant account" means an account that holds all CES grants paid into an RESP. (compte de subvention)

"trustee agreement" means an agreement entered into by the Minister and a trustee under an RESP that relates to the payment of a CES grant or CLB to the RESP. (convention de fiducie)

2. If both assisted and unassisted contributions have been made to an RESP, withdrawals of contributions from the RESP are considered to be made in the order specified below:

(a) assisted contributions are considered to be withdrawn before unassisted contributions; and

(b) unassisted contributions made after 1997 are considered to be withdrawn before unassisted contributions made before 1998.

3. When a contribution has been made in a particular year and a CES grant in respect of the contribution would otherwise be payable at a time in a year following the particular year, the CES grant shall be reduced by the total of all amounts each of which is, in respect of another CES grant paid after the particular year and before that time, the amount by which the other CES grant would have been reduced had the CES grant been paid in the particular year.

4. (1) The Minister may pay a CES grant in respect of a contribution made to an RESP if

(a) the trustee enters into a trustee agreement with the Minister that applies to the RESP and includes the terms and conditions set out in section 8;

(b) the trustee submits, at the request of a subscriber under the RESP, an application for the CES grant

(i) for a contribution made after 2004, within three years after the date of the contribution; and

(ii) for a contribution made before 2005, no later than December 31, 2007;

(i) attains 16 or 17 years of age, a minimum of $2,000 of contributions has been made to, and not withdrawn from, RESPs in respect of the beneficiary before the year in which the beneficiary attains 16 years of age,

(ii) attains 16 or 17 years of age, a minimum of $100 of annual contributions has been made to, and not withdrawn from, RESPs in respect of the beneficiary in at least any four years before the year in which the beneficiary attains 16 years of age,

(iii) attains 16 or 17 years of age and the year is 1998, the beneficiary was a beneficiary under an RESP in at least four years before 1998, or

(iv) attains 17 years of age and the year is 1999, the beneficiary was a beneficiary under an RESP in at least four years before 1998;

(d) the total of the contribution and all other contributions to RESPs made, or deemed to have been made for the purpose of Part X.4 of the Income Tax Act, in respect of the beneficiary does not exceed $42,000;

(e) in the case where the contribution is made after 1999 to an RESP that was entered into before 1999, the RESP complies at the time of the contribution with the conditions for registration set out in subsection 146.1(2) of the Income Tax Act that apply in respect of education savings plans entered into on January 1, 1999;

(g) in the opinion of the Minister, the trustee complies with the terms and conditions of these Regulations and the trustee agreement that applies to the RESP.

(2) Subject to subsection (3), the Minister may pay an amount under subsection 5(4) of the Act if the RESP has only one beneficiary or, if there is more than one, every beneficiary is a brother or sister of every other beneficiary.

(3) If assisted contributions are withdrawn from an RESP after March 22, 2004, the Minister shall not pay the amount under subsection 5(4) of the Act in respect of an individual who was a beneficiary under the RESP at the time of the withdrawal throughout the period that begins on the day of the withdrawal and ends on the last day of the year following the year in which the withdrawal is made unless

(a) the withdrawal is made at a time when at least one beneficiary under the RESP is eligible to receive an EAP under the RESP;

(c) the withdrawal is all or part of an excess amount of contributions to reduce the amount of tax, otherwise payable under Part X.4 of the Income Tax Act, and, at the time of the withdrawal, the excess amount for the year is not greater than $4,000.

(4) At the time a CES grant is paid to an RESP, the trustee shall credit the grant account of the RESP with the amount of the CES grant paid.

5. (1) For the purposes of paragraph 5(3)(b) of the Act and paragraph 4(1)(f) of these Regulations, if contributions that were made to an RESP before 1998 are withdrawn from the RESP after February 23, 1998, any individual who is a beneficiary of the RESP at any time during the period beginning on February 24, 1998 and ending on the day of the withdrawal is an ineligible beneficiary throughout the period that begins on the day of the withdrawal and ends on the last day of the second year following the year in which the withdrawal is made.

(a) the total of all withdrawals made under the RESP for the year does not exceed $200;

(b) the withdrawal is made at a time when at least one beneficiary under the RESP is eligible to receive an EAP under the RESP;

(d) the withdrawal is all or part of an excess amount of contributions to reduce the amount of tax, otherwise payable under Part X.4 of the Income Tax Act, and, at the time of the withdrawal, the excess amount for the year is not greater than $4,000.

(a) the trustee enters into a trustee agreement with the Minister that applies to the RESP and includes the terms and conditions set out in section 8;

(b) the application for the CLB is made by the trustee, at the request of a subscriber under the RESP;

(c) the RESP complies at the time of the CLB payment with the conditions for registration set out in subsection 146.1(2) of the Income Tax Act that apply in respect of education savings plans entered into on January 1, 1999;

(d) the RESP has only one beneficiary or, if there is more than one, every beneficiary is a brother or sister of every other beneficiary; and

(e) the RESP has a CLB account for each beneficiary in respect of whom a CLB is paid; and

(f) in the opinion of the Minister, the trustee complies with the terms and conditions of these Regulations and the trustee agreement that applies to the RESP.

(2) At the time a CLB is paid to an RESP, the trustee shall credit the beneficiary's CLB account within the RESP with the amount of the CLB paid.

7. The Minister may, for the purposes of section 9.1 of the Act, waive the requirement

(b) to apply for a CLB before the beneficiary reaches 21 years of age under subsection 6(1) of the Act;

(d) to provide a Social Insurance Number or business number under paragraph 7(b) of the Act; and

(e) to apply for CES grants within the time limits set out in paragraph 4(1)(b).

(a) the trustee shall provide the Minister with any information that the Minister requires for the purposes of the Act and these Regulations;

(b) the trustee shall maintain records and books of account that relate to the amounts paid under the Act in such form and containing such information as the Minister requires to enable the Minister to determine whether the amounts will be paid or are required to be repaid;

(c) the trustee shall allow the Minister access to all documents and other information that the Minister requires for auditing payments or repayments made under the Act or these Regulations;

(i) all contributions and transfers to, and all withdrawals and transfers from, an RESP that are made after 1997,

(ii) the portion of EAPs made from the RESP that is attributable to amounts paid under the Act, and

(iii) any other information related to the RESP that is specified in the trustee agreement;

(e) the reporting referred to in paragraph (d) shall be done annually or within any shorter period that is set out in the trustee agreement;

(f) the trustee shall submit all information to the Minister in a format and manner that is acceptable to the Minister;

(g) the trustee may make a distribution from an RESP only if, at the time immediately after the distribution, the fair market value of the property held in connection with the RESP would not be less than the total of the balance in the grant account and all CLB accounts of the RESP, unless the distribution is an EAP made to a beneficiary of the RESP and all of the EAP is attributable to CES grants and to a CLB;

(h) the trustee shall repay any amount required to be repaid to the Minister under these Regulations, other than the amounts payable by a beneficiary under subsection 12(2) and section 13; and

(i) the trustee shall not charge fees related to the RESP against the balance of the grant account or the CLB account of any beneficiary of the RESP.

9. Every agreement between the Minister and the promoter of an RESP shall include the following terms and conditions:

(a) the promoter shall provide the trustee with any information that the Minister requires for the purposes of the Act and these Regulations;

(b) the promoter shall report to the Minister any information related to the RESP that is specified in the agreement;

(d) the promoter shall allow the Minister access to all documents and other information related to RESPs that the Minister requires for audit purposes; and

(e) the promoter shall not charge fees related to the RESP against the balance of the grant account or the CLB account of any beneficiary in the RESP.

10. (1) The portion of an EAP made to a beneficiary under an RESP that is attributable to a CLB is, subject to subsection (5), the lesser of

(a) the balance in the CLB account of the beneficiary immediately before the EAP is made, and

(2) Subject to subsections (3) to (6), the portion of an EAP made to a beneficiary under an RESP that is attributable to CES grants is the lesser of

A is the amount of the EAP other than the portion attributable to a CLB included in the EAP,

B is the balance in the grant account of the RESP immediately before the EAP is made,

C is the fair market value of the property held in connection with the RESP, determined immediately before the EAP is made or at an earlier time that is agreed to in the trustee agreement that applies to the RESP,

D is the total of all contributions made to the RESP before the EAP is made that have not been withdrawn, and

E is the total of all CLB accounts held by the other beneficiaries under the RESP immediately before the EAP is made; and

(b) the amount, if any, by which $7,200 exceeds the aggregate of all amounts determined under paragraph (a) in respect of an EAP previously made under the RESP to the beneficiary.

(3) If, in applying the formula set out in paragraph (2)(a), the value of C is less than the total of the values of B, D and E, the result of that formula shall be considered to be the lesser of the value of A and the value of B.

(4) The portion of an EAP that is attributable to CES grants is nil until all amounts of the EAP attributable to the beneficiary's CLB have been so attributed.

(5) The portion of an EAP that is attributable to CES grants or a CLB is nil where the beneficiary is not resident in Canada at the time the EAP is made.

(6) The portion of an EAP made to a beneficiary under an RESP that allows more than one beneficiary at any one time that is attributable to CES grants is nil where the beneficiary became a beneficiary under the RESP after attaining 21 years of age, unless, before attaining 21 years of age, the beneficiary had been a beneficiary under another RESP that allows more than one beneficiary at any one time.

(7) Where a CES grant or a CLB is paid as a portion of an EAP to a beneficiary under an RESP, the trustee shall debit the grant account or the CLB account of the RESP, as the case may be, at the time of the payment with the amount of CES grant or CLB paid.

11. (1) Subject to subsection (2), if assisted contributions are withdrawn from an RESP, other than by way of transfer to another RESP, when no beneficiary under the RESP is eligible to receive an EAP, the trustee under the RESP shall, within the period set out in the trustee agreement that applies to the RESP, repay to the Minister an amount equal to the lesser of

A is the balance in the grant account of the RESP immediately before the withdrawal,

B is the balance of the total assisted contributions in the RESP immediately before the withdrawal, and

(b) the balance in the grant account of the RESP immediately before the withdrawal.

(2) A trustee under an RESP is not required to repay any amount of a CES grant paid in respect of a beneficiary if there is a withdrawal of contributions and the withdrawal is all or part of an excess amount of contributions to reduce the amount of tax payable under Part X.4 of the Income Tax Act, and, at the time of the withdrawal, the excess amount for the year is not greater than $4,000.

(3) A trustee under an RESP shall repay to the Minister, within the period set out in the trustee agreement that applies to the RESP, an amount referred to in subsection (4), if

(c) a payment described in paragraph (b) or (d) of the definition "trust" in subsection 146.1(1) of the Income Tax Act is made under the RESP;

(d) an EAP is made under the RESP to an individual who is not a beneficiary under the RESP;

(e) property is transferred from the RESP to another RESP except where the transfer is an eligible transfer; or

(f) an individual becomes a beneficiary under the RESP in place of another beneficiary, except where paragraph 204.9(4)(b) of the Income Tax Act applies in respect of the replacement

(4) The amount that must be repaid as the result of an occurrence of an event described in subsection (3) is the lesser of

(a) the total of the balance in the grant account and all of the CLB accounts of the RESP immediately before the time of the occurrence, and

(b) the fair market value, immediately before the time of the occurrence, of the property held in connection with the RESP.

(5) If an amount has been paid into an RESP under subsection 5(4) of the Act and an individual, who is not a brother or sister of all of the other beneficiaries under the RESP, becomes a beneficiary under the RESP, the trustee shall repay to the Minister, within the period set out in the trustee agreement that applies to the RESP, the lesser of,

(a) the balance of the grant account of the RESP immediately before the individual becomes a beneficiary, and

(b) the fair market value of the property held in connection with the RESP immediately before the individual becomes a beneficiary.

(6) If a beneficiary in respect of whom a CLB was paid into an RESP ceases to be a beneficiary under the RESP, the trustee shall repay to the Minister, within the period set out in the trustee agreement that applies to the RESP, the lesser of

(a) the balance of the beneficiary's CLB account immediately before the beneficiary ceases to be a beneficiary, and

(b) the fair market value, immediately before the beneficiary ceases to be a beneficiary, of the property held in connection with the RESP less the total of the balances of the CLB accounts in the RESP for all other beneficiaries.

(7) If a CLB has been paid into an RESP and an individual, who is not a brother or sister of every other beneficiary under the RESP, becomes a beneficiary under the RESP, the trustee shall repay to the Minister, within the period set out in the trustee agreement that applies to the RESP the lesser of

(a) the total of the balances of the CLB accounts in the RESP immediately before the individual becomes a beneficiary, and

(b) the fair market value, immediately before the individual becomes a beneficiary, of the property held in connection with the RESP.

(8) If an amount of a CLB or CES grant is repaid to the Minister, the trustee shall debit that amount from the CLB account or grant account, as the case may be, at the time of the repayment.

12. (1) A trustee of an RESP shall, within the period set out in the trustee agreement that applies to the RESP, repay to the Minister any portion of an amount paid as a CES grant or CLB to which the trustee was not entitled under the Act or these Regulations.

(2) A beneficiary of an RESP shall repay to the Minister any portion of an EAP attributable to a CES grant or CLB to which the beneficiary was not entitled under the Act or these Regulations.

13. If the aggregate of all amounts that a beneficiary has received as an EAP that is attributable to CES grants exceeds $7,200, the beneficiary shall repay the excess to the Minister.

14. Any amount of CLB repaid to the Minister under section 11 may be paid into an RESP in respect of the same beneficiary if the conditions of payment of a CLB are otherwise met.

15. For the purpose of subsection 6(5) of the Act, the Minister may pay $25 into the trust when the Minister pays the amount under paragraph 6(2)(a) of the Act.

16. (1) For the purpose of these Regulations, the transfer of an amount, other than an amount in a CLB account, from an RESP to another RESP is an eligible transfer

(i) any beneficiary under the receiving RESP is, immediately before the transfer, a beneficiary under the transferring RESP, or

(ii) a beneficiary under the receiving RESP had not attained 21 years of age at the time of the transfer and a parent of the beneficiary was a parent of an individual who was, immediately before the transfer, a beneficiary under the transferring RESP;

(i) the receiving RESP has only one beneficiary or, if there is more than one, every beneficiary is a brother or sister of every other beneficiary, or

(ii) no payments have been made into the transferring RESP under subsection 5(4) of the Act; and

(c) if the receiving RESP complies with the conditions for registration set out in subsection 146.1(2) of the Income Tax Act that apply in respect of education savings plans entered into on January 1, 1999.

(2) If less than all of the property, other than the property in a CLB account, held in connection with an RESP is transferred to another RESP, the assisted contributions, unassisted contributions, CES grants and accumulated income are considered to be transferred in the same proportion as the value of the property transferred is to the total value of the property, other than the value of the property in a CLB account, in the RESP at the time of the transfer.

(3) If property held in connection with an RESP, other than the property in a CLB account, is transferred to another RESP, the amount of CES grant that is transferred or considered to be transferred under subsection (2) is, at the time of the transfer,

(4) The amount of the CES grant that is transferred or is considered to be transferred under subsection (2) is considered to have been paid to the trustee under the receiving RESP.

(5) The assisted contributions or unassisted contributions that are transferred or are considered to be transferred under subsection (2) are considered to have been made to the receiving RESP.

17. (1) The transfer of an amount in a CLB account of an RESP to the CLB account of another RESP is an eligible transfer if

(b) the receiving RESP complies with the conditions for registration set out in subsection 146.1(2) of the Income Tax Act that apply in respect of education savings plans entered into on January 1, 1999; and

(c) at the time of the transfer, the receiving RESP has only one beneficiary or, where there is more than one, every beneficiary is a brother or sister of every other beneficiary.

(2) If an amount held in connection with a CLB account is transferred to another RESP, the amount that has been transferred is, at the time of the transfer,

(3) The amount of a CLB that is transferred from an RESP is considered to have been paid to the trustee under the receiving RESP.

18. (1) CES grants and the earnings generated on them may only be shared among the beneficiaries of the RESP.

(2) A CLB shall not be shared among beneficiaries of an RESP. However, the earnings generated on a CLB may be shared among the beneficiaries of the RESP.

20. These Regulations come into force on the day on which section 13 of the Act comes into force.