Yes! There are so many tax benefits to having an RESP. To start, the RESP is a tax-sheltered savings tool. That means that while the money is in the RESP, you don’t have to pay any taxes on the government grants and investment earnings. Now considering many RESPs attract thousands of dollars in grants which can be invested to generate earnings, that’s a sizable benefit.
Secondly, when the RESP money is withdrawn as an education assistance payment (which consists of grant and income on contributions and grant), your child will likely have to pay little or no tax on the because they will likely have little or no taxable income. Remember that their income has to be above a cut off level to be taxed, and students often don’t make more than the cut off. The income cut off before you begin to pay federal taxes for 2020 is around $14,000; provincial non-taxable income amounts range from around $11,000 to $16,000, depending on the province you reside in.
Finally, if the RESP money has not been used up and junior doesn’t need any more money for school, you can move any leftover investment income into your RRSP if you are eligible to avoid paying taxes on it (you can transfer up to $50,000 of income earned in an RESP to an RRSP, if you have contribution room in your RRSP).