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, ACES and SAGES;
(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" stands for the Alberta Centennial Education Savings Plan Grant, which was the grant from the Government of Alberta with the cumulative lifetime maximum of $800 per eligible beneficiary, which was discontinued effective July 31, 2015.
Account Maintenance Fee
"Account Maintenance Fee" means the annual fee paid to the Heritage Educational Foundation under the Heritage Plans to reimburse it for its expenses.
"Additional CESG" stands for 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" stands for 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 in the same beneficiary group due to failure to fulfill financial and educational commitments to the plan.
"Basic CESG" stands for 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" stands for 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" stands for 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" stands for 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 government grants, 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.
Contributions Less Fees
"Contributions less fees" means the amount contributed in the Deposit Account, after the deduction of the sales charges, the account maintenance fee and the insurance premiums, if applicable, and does not include Income earned on such amount.
"CRA" stands for the Canada Revenue Agency.
"Deposit Account" means the account established by the Trustee in which the subscriber's contributions (less sales charges 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 sales charges, remitting the balance to the Trustee and receiving principal from the Trustee upon or after the maturity date.
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 Knowledge First Financial Inc., the corporation which offers enrollment in the Heritage Plans to subscribers.
"EAP Account" 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, ACES and SAGES, allocated according to the beneficiary groups with respect to beneficiaries where the Self-Determined Option has not been selected.
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.
"ESDC" means the Employment and Social Development Canada.
"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.
"Income" has the same meaning as Earnings.
"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 beneficiaries in the same beneficiary group after the change to the subscriber's plan is made.
"IRC" stands for 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 the date on which the plan matures. In general, it is in the year your beneficiary is expected to enroll in their first year of post-secondary education.
"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, ACES and SAGES 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 that provide funding for a beneficiary's post-secondary education.
"PPNs" means principal protected notes.
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" stands for the 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" stands for Registered Education Savings Plan which is an education savings plan registered for the purposes of the Income Tax Act (Canada).
"RRSP" stands for Registered Retirement Savings Plan which is a retirement savings plan registered for the purposes of the Income Tax Act (Canada).
"Sales Charge" 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.
"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 Option" means the option chosen which entitles the beneficiary to eligibility for one, two or three Educational Assistance Payments from the EAP Account.
"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 contribution less fees, Income, CESG, CLB, QESI, ACES and SAGES 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 contribution less fees 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, ACES, and SAGES, 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.
Heritage Education Funds is a division of Knowledge First Financial Inc. Knowledge First Financial Inc. is a wholly owned subsidiary of the Knowledge First Foundation and is the investment fund manager, administrator and distributor of the education savings plans offered by Knowledge First Foundation and Heritage Educational Foundation. For more information about our education savings plans, please visit knowledgefirstfinancial.ca or refer to our prospectus.