A key feature of a Registered Education Savings Plan (RESP) is that the capital contributed by subscribers, along with any government grants received, can grow on a tax-deferred basis. This means that any investment income, such as interest, dividends, or capital gains, is not taxed as long as it remains within the plan. This tax-sheltering allows the funds to compound more effectively over time, maximizing the potential savings available for a beneficiary's post-secondary education.

A. Unlike RRSP contributions, contributions made to an RESP are not deductible from the contributor's taxable income.

B. Annual contribution limits were eliminated in 2007. There is now only a lifetime contribution limit of $50,000 per beneficiary.

C. An RESP must generally be terminated by the end of the 35th year after it was opened, not the 31st year.

- Government of Canada. (n.d.). Registered Education Savings Plans (RESPs). Canada.ca. Retrieved from https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/registered-education-savings-plans-resps.html. This official source confirms that contributions are not tax-deductible and that investment earnings grow tax-free.

- Canadian Securities Institute. (2023). Investment Funds in Canada Course Textbook. Chapter 11: Government-Sponsored Savings Plans. Section: "Registered Education Savings Plans (RESPs)". This section details the rules, including the lifetime contribution limit, non-deductibility of contributions, tax-deferred growth, and plan duration.

- Income Tax Act (R.S.C., 1985, c. 1 (5th Supp.)), Section 146.1. This is the primary legislation governing RESPs in Canada.