Many immigrants to Canada arrive with degrees and professional experience from their home country, only to find that Canadian employers or licensing bodies want local credentials. The Lifelong Learning Plan (LLP) exists partly for situations like this: it lets you withdraw from your RRSP to fund full-time education, without triggering a tax bill.
What Is the Lifelong Learning Plan?
The LLP allows you to withdraw up to $10,000 per year from your RRSP for full-time education or training, to a lifetime maximum of $20,000. Like the Home Buyers' Plan, it's not taxable at the time of withdrawal. It's an interest-free loan you repay over time.
Who Can Use It?
You or your spouse/common-law partner must be enrolled (or have received an offer to enroll) in a qualifying full-time educational program at a designated educational institution. You must also have RRSP funds that have been in the account for at least 90 days.
Part-time students generally don't qualify, unless you have a disability that makes full-time study impractical.
What Programs Qualify?
Most full-time diploma, degree, and certificate programs at Canadian colleges and universities qualify. Carleton University, the University of Ottawa, Algonquin College, and La Cité in Ottawa are all designated institutions. Many professional licensing bridging programs also qualify.
This is particularly relevant for Ottawa newcomers in fields like engineering, nursing, law, or teaching, where bridging programs help internationally trained professionals get licensed in Ontario.
Repayment Rules
You have 10 years to repay the withdrawn amount back into your RRSP. Repayments must begin the second year after the last year you were enrolled in the program (or five years after your first withdrawal, whichever comes first).
Each year, 1/10th of the total withdrawal becomes due. Miss a payment? That amount is added to your taxable income for the year.
A Realistic Ottawa Scenario
A nurse from the Philippines arrives in Ottawa and needs to complete a bridging program at Algonquin College before receiving Ontario licensure. The program is full-time and costs $8,000/year for two years. She can withdraw $8,000 from her RRSP each year (up to the $20,000 max), avoid the tax hit, complete her training, and repay the amount over the next decade once she's working as a registered nurse.
Combining LLP and Other Aid
The LLP doesn't prevent you from also applying for student loans, bursaries, or employer-sponsored education funding. It's one piece of a larger financial picture. If you're considering going back to school, speak with a financial advisor at your bank or a settlement organization in Ottawa about how the LLP fits into your overall plan.
