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Insights & advice

Ways to use your Canada Child Benefit (CCB)

June 2022 – 15 min read

Key takeaways

  • The CCB is a government benefit that helps with the costs of raising children

  • The first use of the CCB is to buy food, clothing and other childcare needs

  • Other ways to use the CCB include investing it or purchasing life insurance to give you child a financial head start

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What is the Canada Child Benefit (CCB)?

The CCB is a government benefit that helps families in Canada with the costs of raising children. It provides eligible parents with children under the age of 18 a monthly, tax-free payment. It’s not considered to be taxable income.

Great ways to use the CCB

As a parent, you can spend the CCB anyway you see fit. You’ll likely want to use it for food, clothing and other childcare needs first. 

However, if you have some of the CCB left after purchasing what you need to care for your child, here are other ways to use it.

  • Contribute to an RESP – With the rising costs of education and everyday expenses, setting aside money for your child’s financial future could give them a welcome head start. A registered education savings plan (RESP) can help you save for your child’s post-secondary education and related expenses, such as housing, food, books, technology and travel. As a bonus, the government will help you save through the Canada education savings grant (CESG), which provides 20% on the first $2,500 you put into an RESP each year, to a lifetime limit of $7,200. Some provinces may also provide additional grants.

  • Purchase life insurance – When you buy a permanent life insurance policy for your child early in life, it means they’ll always be insured, regardless of any future health problems. Permanent life insurance includes features that can grow money inside your policy over time (called cash value). This money can be accessed during your child’s lifetime. When your child reaches the age of 25, the policy can be transferred to them tax-free. Later in life, your child could have the option to access the policy’s cash value to contribute to things like supplementing their retirement income or establishing a financial legacy of their own. 

  • Invest it – Setting aside money for your child beyond education costs could really help them. Consider contributing to a registered retirement savings plan (RRSP) or tax-free savings account (TFSA). Or you could contribute a portion of the CCB to a savings account for use as an emergency account or for unexpected family expenses.

What’s next?

Now that you know more about how to use the CCB, why not meet with your advisor to:

  • Set up an emergency fund, or open an RESP, RRSP or TFSA

  • Discover the benefits of purchasing life insurance for your child

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The information provided is based on current laws, regulations and other rules applicable to Canadian residents. It is accurate to the best of our knowledge as of the date of publication. Rules and their interpretation may change, affecting the accuracy of the information. The information provided is general in nature, and should not be relied upon as a substitute for advice in any specific situation. For specific situations, advice should be obtained from the appropriate legal, accounting, tax or other professional advisors.