Accumulated Income Payment
"Accumulated Income Payment" or "AIP" means any amounts paid out of the Heritage Plans other than:
(i) Educational Assistance Payments;
(ii) refund of Contributions to a Subscriber;
(iii) the repayment of CESG, CLB, QESI and ACES;
(iv) the payment to, or to a trust in favour of, a Designated Educational Institution; and
(v) a payment to a trust holding property for another RESP.
"Aces" means the Alberta Centennial Education Savings Plan Grant, which is the grant from the Government of Alberta with the cumulative lifetime maximum of $800 per eligible Beneficiary. "Additional CESG" means the additional Canada Education Savings Grant available to qualifying families. The amount of Additional CESG is up to 20% annually on the first $500 of Contributions to a Registered Education Savings Plan.
"Additional CESG" means the additional Canada Education Savings Grant available to qualifying families. The amount of Additional CESG is up to 20% annually on the first $500 of Contributions to a Registered Education Savings Plan.
"Additional QESI" means the additional Quebec Education Savings Incentive available to qualifying families. The amount of Additional QESI is up to 10% annually on the first $500 of Contributions to a Registered Education Savings Plan.
"Application" means the Education Savings Plan Enrollment Application for enrollment in the Heritage Plans and, if applicable, the Notice of Transfer to Self-Determined Option for enrollment in the Self- Determined Plan.
"Attrition" means the decrease in the number of the Beneficiaries with the same Year of Eligibility due to failure to fulfill financial and educational commitments to the Plan. As a result, Income earned with respect to such Beneficiaries (except interest earned on government grants) is allocated to the remaining Beneficiaries with the same Year of Eligibility.
"Basic CESG" means the Canada Education Savings Grant of up to 20% annually on up to $2,500 of Contributions to a Registered Education Savings Plan.
"Basic QESI" means the Quebec Education Savings Incentive of up to 10% annually on up to $2,500 of Contributions to a Registered Education Savings Plan.
"Beneficiary" means the child nominated and enrolled in the Heritage Plans, or any individual substituted for that child, to whom Educational Assistance Payments will be paid provided that he or she will be eligible to receive such payments.
"CESG" means the Canada Education Savings Grant which is the grant from the Government of Canada with the cumulative lifetime maximum of $7,200 per eligible Beneficiary.
"CLB" means the Canada Learning Bond which is the grant from the Government of Canada with the cumulative lifetime maximum of $2,000 per eligible Beneficiary.
"Contract" means the particular Education Savings Plan entered into by the Subscriber.
"Contributions" means the funds contributed by the Subscriber under an Education Savings Plan on behalf of a Beneficiary, less Insurance Premiums, which funds are contributed to the Heritage Plans and become eligible for the Basic CESG and, if applicable, Additional CESG, CLB, ACES and Basic and Additional QESI, but shall not include any amounts paid into the plan under or because of:
(i) the Canada Education Savings Act or a Designated Provincial Program, or
(ii) any other program that has a similar purpose to a Designated Provincial Program and that is funded, directly or indirectly, by a province (other than an amount paid into the Plan by a Public Primary Caregiver in its capacity as a Subscriber).
"Contribution Schedule" means the schedule(s) contained in this prospectus setting out the required Contributions under the Heritage Plans.
"CRA" means the Canada Revenue Agency.
"Deposit Account" means the account established by the Trustee in which the Subscriber's Contributions (less Membership Fees and Insurance Premiums, if applicable) and government grants are placed and in which Income is earned.
"Depository" means The Bank of Nova Scotia or its successor which is responsible for receiving Contributions, deducting Insurance Premiums and Membership Fees, remitting the balance to the Trustee and receiving Principal from the Trustee upon or after the Maturity Date.
"Depository Fee" means the annual depository fee paid to the Heritage Educational Foundation under the Heritage Plans to reimburse it for its expenses.
Designated Educational Institution
"Designated Educational Institution" means an institution which complies with Section 118.6(1)(a)(I) of the Income Tax Act (Canada).
Designated Provincial Program
"Designated Provincial Program" means:
(i) a program administered pursuant to an agreement entered into under section 12 of the Canada Education Savings Act, or
(ii) a program established under the laws of a province to encourage the financing of children's post-secondary education through savings in registered education savings plans.
"Distributor" means Heritage Education Funds Inc., the corporation which offers enrollment in the Heritage Plans to Subscribers.
Educational Assistance Payment
"Educational Assistance Payment" or "EAP" means the amount determined by the Foundation to be paid out of the Heritage Plans to eligible Beneficiaries who attend a Recognized Institution in the Year of Eligibility and according to the pay-out option selected by the Subscriber prior to the Maturity Date.
Education Savings Plan
"Education Savings Plan" means a Contract made between an individual (or an individual and the spouse of the individual) and the Foundation under which the Foundation agrees to issue EAPs.
"Enhancement Fund" is a fund consisting principally of income earned on amounts held in the Scholarship Fund, other than government grants, which fund is utilized for the purposes as described in the "Enhancement Fund" section on page 17.
"Foundation" means the Heritage Educational Foundation.
"Good Standing" means, in respect of a Plan, that all Contributions have been remitted and all applicable fees have been collected.
"Group Plan" means the contractual arrangement between the Foundation and the Subscriber which applies until the time of transfer, if any, to the Self- Determined Plan.
Group Plan Trust
"Group Plan Trust" means the trust governed by terms of the Group Plan and the Self-Determined Plan.
"Heritage Plans" means the Group Plan and, where the Self-Determined Option is chosen, the Self-Determined Plan.
"HRSDC" means the Department for Human Resources and Skills Development Canada.
"Income" means all interest earned on Principal and government grants in the Deposit Account allocated to the Subscriber, and all realized capital gains and losses allocated to all Beneficiaries with the same Maturity Date.
"Insurance Premiums" means the premiums for insurance, if obtained by the Subscriber, which are deducted from Contributions.
"Interest Adjustment" is an amount calculated (and based on the rate of interest actually credited monthly to Subscribers' accounts of interest earned) so as to ensure that a Subscriber's Plan earns approximately the same amount at maturity as other Subscribers with the same Year of Eligibility after the change to the Subscriber's Plan is made.
"IRC" means the Independent Review Committee which is a committee whose role is to oversee all decisions involving an actual or perceived conflict between the interests of the Foundation or Distributor, on the one hand, and the interests of the Plans, on the other.
"Maturity Date" means July 31st in the year specified in the Contract, normally the year in which the Beneficiary turns 18 years of age or, if applicable, the date of termination, or such earlier or later date to which it may be changed.
"Membership Fee" means, in the case of enrollment in the Heritage Plans, the $100 per Unit fee deducted from Contributions by the Depository which is a commission to the Distributor for its distribution services.
"Operating Account" is an operating account maintained by the Foundation to pay the costs of the Foundation. The Operating Account is comprised of the Depository Fee and the Administration Fee.
"Permitted Purposes" means:
(i) Educational Assistance Payments;
(ii) return of Contributions to a Subscriber;
(iii) payment to a Designated Educational Institution;
(iv) payment to a trust holding property for another RESP;
(v) trustee and administrative fees relating to the operation of the Plans;
(vi) the payment of CESG, CLB and ACES pursuant to the Canada Education Savings Act; and the payment of QESI pursuant to the provisions set out by Revenu Québec;
(vii) Accumulated Income Payments.
"Plan" means each individual Plan of each particular Subscriber.
"Plans" means the Heritage Plans consisting of the Group Plan and the Self-Determined Plan.
"PPNs" means principal protected notes.
"Principal" means the amount contributed in the Deposit Account, after the deduction of the Membership Fee, the Depository Fee and the Insurance Premiums, if applicable, and does not include Income earned on such amount.
Public Primary Caregiver
"Public Primary Caregiver" of a Beneficiary means the department, agency or institution that maintains the Beneficiary or the public trustee or public curator of the province in which the Beneficiary resides, including any such department, agency, institution, public trustee or public curator that has been substituted for the foregoing in accordance with the Canada Education Savings Act.
"QESI" means Quebec Education Savings Grant which is the grant from the Government of Quebec with the cumulative lifetime maximum of $3,600 per eligible Beneficiary.
"Recognized Institution" means:
(i) an educational institution in Canada described insection (a) of the definition "Designated Educational Institution" in subsection 118.6(1) of the Income Tax Act (Canada); or
(ii) an educational institution outside Canada that is a university, college or other educational institution that provides courses at a post-secondary school level in which a Beneficiary is enrolled in a course of not less than 13 consecutive weeks leading to a degree.
"RESP" means Registered Education Savings Plan which is an education savings plan registered for the purposes of the Income Tax Act (Canada).
"RRSP" means Registered Retirement Savings Plan which is a retirement savings plan registered for the purposes of the Income Tax Act (Canada).
"Scholarship Committee" means the committee established by the Board of Directors of the Foundation to make decisions concerning eligibility, Recognized Institutions and other matters.
"Scholarship Fund" means the separate account maintained by the Trustee, constituted of Income at the Maturity Date from the Subscribers (including a portion of the Income of those who have withdrawn from the Plan), together with CESG, CLB, QESI and ACES, allocated according to the Year of Eligibility with respect to Beneficiaries where the Self-Determined Option has not been selected.
"Scholarship Option" means the option chosen which entitles the Beneficiary to eligibility for one, two or three Educational Assistance Payments from the Scholarship Fund.
"Self-Determined Account" means, with respect to Subscribers who have enrolled in the Heritage Plans and selected the Self-Determined Plan, each individual account established by the Trustee to hold funds of the Self-Determined Plan Trust into which Principal, Income, CESG, CLB, QESI and ACES are directed on the Maturity Date and into which Contributions made after the Maturity Date are directed.
"Self-Determined Option" means the option that may be selected by a Subscriber not earlier than 180 days before and not later than the Maturity Date to transfer from the Group Plan to the Self-Determined Plan on the Maturity Date, permitting additional Contributions to be made up to and including the 31st year following the year the Subscriber's Plan was entered into (the 35th such year if the Plan is a Specified Plan) and providing for the return to the Subscriber of Principal and payment to the Beneficiary of Income earned in the Subscriber's particular Plan at any time after the Beneficiary is in attendance at a qualifying program (together with applicable government grants) and permitting AIP withdrawals. This is the option that will be automatically deemed selected by a Subscriber enrolled in the Heritage Plans if the Scholarship Option is not chosen.
"Self-Determined Plan" means the contractual arrangement between the Heritage Educational Foundation and the Subscriber which applies following a transfer by the Subscriber from the Group Plan to the Self-Determined Plan following selection of the Self- Determined Option prior to maturity.
Self-Determined Plan Trust
"Self-Determined Plan Trust" means the trust governed by the terms of the Self-Determined Plan and the Group Plan.
"Specified Plan" means an RESP:
(i) that does not allow more than one Beneficiary at any one time;
(ii) under which the Beneficiary is entitled to a disability tax credit under section 118.3 of the Income Tax Act (Canada) in the 31st year after the RESP was entered into; and
(iii) that provides that, at all times following the 35th year after the RESP was entered into, no other individual may be designated as a Beneficiary under the RESP.
"Spouse" includes a common-law partner as defined under the Income Tax Act (Canada).
"Subscriber" means a person who has signed the Application, is responsible for the required Contributions, and whose Application has been accepted by the Foundation and includes
(i) a person who is a spouse of an existing Subscriber (as recognized under applicable law) and a joint Subscriber and
(ii) upon notice given to the Foundation (a) a person who acquired a Subscriber's rights under the Plan pursuant to a decree, order or judgment of a competent tribunal, or under a written agreement, relating to a division of property between that person and the Subscriber in settlement of rights arising out of, or on the breakdown of, their marriage or common law partnership; (b) after the death of a Subscriber, the estate of the Subscriber or any other person who makes Contributions to the Plan in respect of the Beneficiary; or (c) the Public Primary Caregiver (and any person who has acquired the Public Primary Caregiver's Rights in accordance with the Canada Education Savings Act). It is a requirement under the Income Tax Act (Canada) that both such individuals be spouses of each other.
"Trust Indenture" means the trust indenture, as amended, entered into between the Trustee and the Foundation establishing the terms of maintenance and investment of Principal and the payment of EAPs and AIPs and the general terms of the Group Plan Trust and the Self-Determined Plan Trust.
"Trustee" means RBC Investor Services Trust or its successors responsible for the custody of Principal, Income, CESG, CLB, QESI and ACES, maintaining and investing such funds (as directed by the Foundation) and remitting such funds to the Foundation to enable it to pay EAPs and AIPs.
"Units" are a measure of a Subscriber's interest in the underlying investment pool. Unit Contribution amounts are designed (assuming all are made in accordance with the Contribution Schedule) such that an approximately equal amount of accumulated Income per Unit is expected to be earned at maturity. Units in the Group Plan are obtained upon enrollment of a Beneficiary. A fraction of a Unit may be issued.
Variable Rate Securities
"Variable Rate Securities" means index linked or other variable rate debt securities issued or guaranteed by the federal or provincial governments.
Year of Eligibility
"Year of Eligibility" means the year when a Beneficiary whose Subscriber is enrolled in the Group Plan and has not selected the Self-Determined Option becomes 19 years of age, or such earlier or later year to which it is changed, and is the year in which the first EAPs are paid to the eligible Beneficiaries.
Year of Maturity
"Year of Maturity" means the year the Beneficiary is expected to enroll in the first year of post-secondary education, usually the year he or she turns 18 years of age.