Business | Fall 2008
Invest in your farm's future.
By Joy Gregory
They re-use binder twine, turn today's leftovers into tomorrow's soup and pass rubber boots from kid to kid. But when it comes to cold hard cash in an education savings account for their kids, a lot of Canadian farmers are too willing to find something else that needs their attention. Grant Griffith wants them to reconsider.
“I would say that a large percentage of farm families do not save for their children's future education. And that's too bad. I tell them they should see post-secondary education as a way to train their farm's next CEO,” says Griffith, with Meyers Norris Penny’s Brandon, MB office.
What's holding them back? “A lot of producers are not paying a whole lot of taxes. They look at registered education savings plans (RESPs) and figure they don't need the tax break.”
They may be right about the taxes, but they're missing the federal plan's real value, says Griffith. Depending on your net income and your annual contribution, the Canada Education Savings Grant program could contribute up to $600 a year to your child's RESP.
Flexible rules enable RESP money to be transferred from child to child, and allow the child, not the higher-income parent, to pay tax on the money as it's used.
If your child was born after December 31, 2003 and your net income is less than $37,885 in 2008, you may also qualify for the $500 Canada Learning Bond, plus another $100 per year until your child is age 15.
Another supplemental program called the Alberta Centennial Education Savings Plan, available for children born to Alberta residents beginning in 2005, may also top up your RESP.
“People get hung up on the idea they'll never be able to save enough to pay for their children's post-secondary education. That's a poor excuse for not putting something aside,” says Griffith. If your children are going to run the farm in the future, they need an education on everything from accounting to agronomy to computers and marketing.
