Can you use an RESP for an apprenticeship?

For many young people, the path to a fulfilling career doesn’t begin in a lecture hall. It starts in a workshop, on a job site or in a bustling kitchen. Skilled trades are in high demand, offering hands-on experience, steady income and the satisfaction of building something real.

With a Registered Education Savings Plan (RESP), you can help fund that journey, making it easier for your child to learn, earn and grow through an apprenticeship program.

An RESP doesn’t only benefit college and university students.

Any money set aside in an RESP can also support an apprenticeship route, as long as the program meets certain criteria.

What counts as an eligible apprenticeship program?

Apprenticeships typically last between two and five years and combine on-the-job training with in-class instruction.

According to the Canada Revenue Agency (CRA), a qualifying educational program must meet the following conditions:

• It must last at least three consecutive weeks
• It must require at least 10 hours per week of courses or work in the program

If the school under consideration is not on the federal government’s list of designated educational institutions, it’s also worth exploring the database of Provincial and Territorial Apprenticeship Programs.

Does the type of trade matter?

The list of qualifying programs includes many skilled trades, like electrical work, welding and plumbing.

Institutions across Canada even offer training in cooking, gas fitting and millwrighting for example.

The advantages of RESP withdrawals

In apprenticeship programs, participants often earn wages while they train.

RESP withdrawals can help cover costs associated with training, such as tuition, equipment and books.

How do you make RESP withdrawals for an apprenticeship?

While the structure of apprenticeships may look different from traditional post-secondary programs, the way RESP withdrawals work is largely the same.

You’ll have to provide proof of enrolment in a qualifying education program.

Additional support may also be available. For example, the Canada Apprentice Loan offers up to $4,000 in interest-free loans per technical training period when your apprenticeship is in a designated Red Seal trade.

How long can you have RESP savings before starting a program?

An RESP can stay open for up to 35 years from the date it was first created. (The timeline is extended to 40 years for individuals who are eligible for the Disability Tax Credit and in a non-family plan.)

This provides valuable flexibility if a student decides to delay their training or take time before starting a trade program. It also leaves the door open in case their career goals evolve over time.

My program isn’t eligible. What else can I do with RESP savings?

If the RESP beneficiary decides not to pursue post-secondary education, or a trade or apprenticeship program, you still have choices:

• Keep the RESP – and your options – open. You have 35 years in total from the date the RESP was opened and 40 years if the beneficiary is entitled to the disability tax credit!

The RESP contributor can also:

• Transfer the RESP to another child or beneficiary
• Contribute the income earned within the RESP to your registered retirement savings plan (RRSP), if you have contribution room
• Roll over the income into a registered disability savings plan (RDSP), if the beneficiary is eligible

In all cases, Canada Education Savings Grant (CESG) and Canada Learning Bond (CLB) amounts must be repaid to the government. Your original contributions, however, are returned to you tax-free.

Life paths are rarely linear, and career choices are more diverse than ever. But an RESP can provide the flexibility to help fund your child’s goals.