How to set your kid up financially in Canada, from birth to 18

Canada pays families real money for raising kids, but you have to ask for it. Ottawa pays you every month for each child under 18, adds free money to a school savings account, and opens two tax-free accounts when your child turns 18. Nobody tells you to claim any of it.

Start the school savings in the first year and it can reach roughly $85,000 by age 18, with $7,200 of that from the government (assuming $2,500 a year and 5% growth). Start at 9 and it's about $33,900. If your child is already past the first year, begin with Step 2. You can catch up on the missed years.

Step 1: Register the birth and apply for the Canada Child Benefit

The Canada Child Benefit is a monthly payment from the Canada Revenue Agency (CRA), the federal tax agency. It's tax-free and you spend it however you like. From July 2026 to June 2027 the maximum is $8,157 a year for a child under 6 and $6,883 a year for a child aged 6 to 17.

What you get depends on your family's income, and the CRA looks at last year's. Under $38,237 you get the full amount. Above that it shrinks slowly, and faster above $82,847. Apply even if you earn more, because it shrinks instead of stopping.

Apply when you register the birth with your province. The form asks if you want a Social Insurance Number (SIN) for your child, the nine-digit number they'll need for almost everything below, and if you agree to share the details with the CRA. In most provinces you tick yes to both. Payments start within about 8 weeks. Don't apply a second time through My Account on the CRA website, because that can delay the first application.

Set up direct deposit with the CRA before the baby arrives, so the first payment has somewhere to land. And file a tax return every year, even with no income. The CRA works out your payment from your return, and your spouse or partner's, so you both need to file. The CCB payment dates guide shows which day each month the money arrives.

If you want, open a savings account in your child's name and move part of each payment into it. Interest on money you give a child normally counts as your income (more on that in Step 3), but the CRA makes an exception for CCB money. The interest on it counts as your child's income, and a child with little other income usually pays no tax on it.

Step 2: Open an RESP in the first year

A Registered Education Savings Plan (RESP) is a savings account for your child's education after high school. The money grows without being taxed, and the government adds a grant on top.

Ask your bank or credit union for a family RESP, which lets you add more children later. Bring your SIN and your child's. You own the account, so you pick what it's invested in. Ask what each option costs first.

For every dollar you put in, up to $2,500 a year, the government adds 20 cents. That's $500 a year, and $7,200 over your child's life. On the first $500 each year, families with income under $58,523 get an extra $100 and families up to $117,045 get an extra $50. The extra counts toward the same $7,200.

Say you put in $208 a month, which is $2,500 a year, from birth. By 18 you've put in $45,000, the government has added $7,200, and at 5% growth the account holds roughly $85,000. That's an illustration, since the real number depends on what the account is invested in.

Your child earns $500 of grant room every year, even before the account exists. If you open it at age 9, you can put in up to $5,000 in one year and collect up to $1,000 in grants to catch up. Grandparents and friends can contribute too, and their gifts earn the same 20% grant. You can put in $50,000 per child over time, and the grants don't count toward that. Contributions aren't tax-deductible. The grant is paid until the end of the year your child turns 17.

If your income is lower, the Canada Learning Bond adds up to $2,000

The Canada Learning Bond puts $500 into the RESP in the first year your child qualifies and $100 a year after that until they turn 15. You never have to contribute. For July 2026 to June 2027 you qualify with a family income of $58,523 or less if you have one to three children, under $66,036 with four and under $73,577 with five. Your child must be born in 2004 or later.

Ask for the Bond when you open the RESP, because it only pays into an RESP. Each year you wait is a $100 payment your child doesn't get. Children born in 2024 or later will be enrolled automatically from 2028, when they turn four, if they have a SIN and no RESP.

Two provinces add their own money. BC pays a $1,200 grant with no contribution needed, which a child can apply for between their sixth birthday and the day before their ninth. Québec's incentive can add up to $3,600 on top of the federal grant.

Getting the money out

When your child starts college, university or a trade program, what you put in comes back to you tax-free. The grants, the Bond and the growth go to your child as educational assistance payments, which they report as their own income. A student with little other income usually pays little or no tax on them. For scale, average undergraduate tuition in Canada is $7,734 for 2025/26, from $3,746 in Newfoundland and Labrador to $9,988 in Nova Scotia, according to Statistics Canada.

If your child doesn't go on to school, the account can stay open for decades. The grants and the Bond go back to the government, and your contributions still come back tax-free. The growth can move into your RRSP up to $50,000 if you have the room. An RRSP is a retirement savings account. Otherwise the growth is taxed as income plus an extra 20% (12% in Québec).

Step 3: Keep gifts and birthday money out of your tax bill

Canada has no gift tax, so giving your child money costs nothing. The catch is what the money earns. If you give a child under 18 money and it earns interest or dividends, the CRA taxes that income to you until the year your child turns 18. Profit from selling an investment isn't taxed back to you.

Inside an RESP the growth isn't taxed until it comes out, so none of this applies there. Keep the long-term savings in the RESP, and keep birthday cash and allowance in a regular savings account in your child's name. The interest on small balances is tiny anyway.

Step 4: Start a small allowance and talk about money

The Financial Consumer Agency of Canada (FCAC), the federal consumer watchdog, says an allowance is practice. Start small, match it to your child's age and decide up front what it covers. If it has to cover toys and snacks, $5 runs out fast and your kid sees why.

Talking counts as much as the money. In the 2018 PISA international test, teens who talked about money with their parents, even once a week, scored 33 points higher in financial literacy than teens who didn't.

FCAC's Teaching children about money page has activities sorted by age.

Step 5: File a tax return after the first job

A teen with a summer job usually owes no federal income tax. The first $16,452 of income is tax-free in 2026 (provinces set their own amounts). The employer still takes tax off each paycheque, and the only way to get it back is to file a return.

File even if your teen earned only a few thousand dollars. A return also starts their RRSP room, which is 18% of last year's earned income and only builds once a return is on file. Before the first job, send your teen through the free Canooq lesson on reading a paycheque.

Step 6: At 18, open a TFSA and, for a first home, an FHSA

The Tax-Free Savings Account (TFSA) lets investments grow tax-free and lets withdrawals come out tax-free, for any reason. Room starts building at 18 and the 2026 limit is $7,000. The CRA doesn't prorate it, so a December birthday still gets the full amount, and unused room carries forward. The TFSA explained guide covers how it works.

The First Home Savings Account (FHSA) is for buying a first home. Contributions lower the tax your child pays that year, and money withdrawn to buy a qualifying first home is tax-free. The limit is $8,000 a year and $40,000 in total. The account closes after 15 years, at age 71, or the year after the first home withdrawal, whichever comes first. If you gift money into your child's FHSA, the deduction is still theirs to claim. The FHSA guide has the rules, and if your child can fund only one account at first, the TFSA vs RRSP vs FHSA comparison shows which to pick.

If your child has a disability, open an RDSP

A Registered Disability Savings Plan (RDSP) pays bigger grants than the RESP, but your child must first be approved for the Disability Tax Credit. Ottawa then matches your contributions with a grant of up to $3,500 a year, to $70,000 over a lifetime, until the year your child turns 49. Lower-income families also get the Canada Disability Savings Bond, up to $1,000 a year and $20,000 in total, with no contribution needed. For 2026 the full Bond goes to families with income of $38,237 or less, and it phases out completely at $58,523.

Have your kid take the free lessons

Before that first paycheque, have your teen try Canooq's free Learn course. Eight short lessons cover paycheques, bank accounts and credit cards, the TFSA, RRSP and FHSA, taxes and benefits, renting versus buying, and investing. Do it together.