A Registered Education Savings Plan (RESP), sponsored by the Canadian government, encourages investing in a child's future post-secondary education. Subscribers to an RESP make contributions that build up tax-free earnings.

The government contributes a certain amount to these plans for children under age 18.

Contributors do not receive a tax deduction for investments in an RESP. There are no taxes due until funds are taken out to pay for a child’s education. At that time, contributions made into the RESP are returned tax-free, although contributors’ earnings from the plan are taxed. The money the government pays out is taxed to the students. However, since a large number of students have little to no income, many can withdraw the money tax-free.