TFSA, RESP & Childcare Costs — Using Registered Savings Alongside CWELCC in Regina SK

One of the unexpected benefits of CWELCC’s approximately $10/day childcare for Regina SK families is that it frees up household cash flow for registered savings contributions. At Daisy Days Daycare, we regularly hear from families who, after enrolling and seeing the CWELCC savings, can redirect previous childcare budget into RESP, RRSP, or TFSA contributions. Here’s the financial planning context.

The CWELCC Cash Flow Advantage — What Families Can Do With Savings

Before CWELCC, Regina SK families paying $1,100-1,430+/month for licensed infant care had almost no room for retirement or education savings. With CWELCC at approximately $220/month, the freed cash flow — approximately $880-1,210/month — can be redirected to:

RESP — Registered Education Savings Plan

The RESP is the single best registered account for families with children because of the Canada Education Savings Grant (CESG):

• CESG: The federal government adds 20% to your RESP contributions — on up to $2,500/year in contributions, that’s a maximum $500/year in free government money
• Lifetime CESG maximum: $7,200 per child
• Contribution room: $50,000 lifetime per beneficiary
• Even with CWELCC’s savings, directing $200-250/month to an RESP ($2,400-3,000/year) maximizes the annual CESG — approximately $480-600/year in free money

TFSA — Tax-Free Savings Account

After maximizing RESP/CESG, TFSA contributions provide:

• Tax-free investment growth
• Flexible withdrawals at any time, for any purpose (including backup childcare costs)
• 2026 TFSA contribution room: $7,000 annual limit (plus any unused room from previous years)

RRSP — Registered Retirement Savings Plan

For parents in higher marginal tax brackets, RRSP contributions provide immediate tax refunds — particularly valuable when household income spikes during the years the childcare expense deduction applies on a lower-income CWELCC-reduced amount.

The Childcare Expense Deduction and Your Registered Accounts

Your T778 childcare expense deduction (approximately $2,200 per child per year at CWELCC rates) reduces your taxable income — which slightly affects the optimal registered account strategy. Consult a fee-only financial advisor in Regina SK for the specific interaction with your household’s tax situation.

Canada Child Benefit — The Monthly Cash Flow

While using Daisy Days Daycare on CWELCC, your family also receives the Canada Child Benefit (CCB) monthly — income-tested monthly payments for families with children under 18. The CCB is separate from CWELCC and does not affect your daycare enrollment. Maximize CCB by filing your taxes annually even if you have no tax owing.

The Emergency Fund for Backup Childcare Costs

The one childcare-related cash reserve every family should maintain: 1-2 months of backup care costs. Sick days, statutory holidays, and unexpected centre closures require backup care — and some of these (emergency babysitter, backup daycare drop-in) have costs. A $500-1,000 emergency fund specifically for childcare gaps is a practical financial buffer for any Regina SK family.

This guide is for informational purposes only. Consult a licensed financial advisor for personalized financial planning advice specific to your situation.

→ Full CRA childcare tax deduction guide T778
→ Calculate your CWELCC savings and freed cash flow

Contact Daisy Days Daycare — quality licensed care freeing up Regina SK family finances.
306-807-3233 | info@daisydaysdaycare.com | 2007 Potts Crescent East, Regina SK S4V 2E5