RESP GUIDE REGISTERED EDUCATION SAVINGS PLAN

Education Funds THE HERITAGE PLANS RESP GUIDE REGISTERED EDUCATION SAVINGS PLAN Over a 40-year period, a university graduate earns $1.1 million more than a college graduate and earns on average $1.5 million more than a high school graduate.1 1 Council of Ontario Universities, University Works: 2017 Employment Report

2 THE COST RESP GUIDE HOW MUCH WILL IT COST? The estimated cost of a 4-year undergraduate degree from a Canadian university in 2037 could exceed $127,000. 1 Year of Birth Year of School Entrance 4-Year Tuition with Residence 2 4-year Tuition Without Residence 3 2019 2037 $127,446 $69,756 2018 2036 $124,956 $68,396 2017 2035 $122,505 $67,055 2016 2034 $120,075 $65,715 2015 2033 $117,675 $64,385 2014 2032 $115,315 $63,065 2013 2031 $112,985 $61,755 2012 2030 $110,685 $60,455 2011 2029 $108,425 $59,175 2010 2028 $106,185 $57,905 2009 2027 $103,975 $56,645 2008 2026 $101,785 $55,385 2007 2025 $99,625 $54,135 2006 2024 $97,485 $52,885 2005 2023 $95,375 $51,645 2004 2022 $93,284 $50,414 2003 2021 $91,214 $49,184 The average cost of a 4-year program starting in 2017/2018 is approximately $29,400 4 or $83,400 including expenses 5 2017 / 2018 ANNUAL TUITION BY FIELD OF STUDY (National average) 5 Nursing Arts Engineering Law Dentistry $5,634 $5,842 $8,099 $13,642 $22,297 1 Average annual increase based on previous 10-years data cited in CANSIM tables 477-0021 and 477-0077. 2 With Residence costs include compulsory fees, meals and lodging, as well as an estimate for textbooks and incidental expenses. 3 Without Residence costs include compulsory fees as well as an estimate for textbooks and incidental expenses. 4 Includes tuition, compulsory fees and meals/residence costs cited in Tuition, Living and Accommodation Costs, 2017/2018, (Statistics Canada, Sept. 2017), as well as an estimate for textbooks and incidental expenses. 5 Tuition, Living and Accommodation Costs, 2017/2018, (Statistics Canada, Sept. 2017)

RESP GUIDE ABOUT RESPS 3 ABOUT RESPS: THE HERITAGE PLAN AN EDUCATION SAVINGS VEHICLE An RESP is an education savings plan that is registered by the federal government, through the Canada Revenue Agency. INCLUDES GOVERNMENT GRANTS The Canada Education Savings Grant ( CESG ) provides up to $7,200 per child 1. The Canada Learning Bond ( CLB ) provides up to $2,000 per child for qualifying families 1. Provincial government grants and incentives are available to qualifying families depending on family net income and/or residency. OFFERS TAX BENEFITS Investment earnings on contributions up to $50,000 are taxsheltered until withdrawn by the student (beneficiary), taxed in the student s tax bracket. OFFERS LOWER RISK INVESTMENTS Subscribers contributions and government grants are conservatively invested in lower risk fixed-income securities such as bonds and GICs that typically earn a competitive risk adjusted return. PROVIDES MORE POTENTIAL INCOME Income earned in the plans may be invested in a diversified portfolio of corporate bonds, Canadian equities, US and Canadian Exchange Traded Funds ( ETFs ). The aim of this investment strategy is to increase returns through diversification of products and stock market exposure. INCLUDES ELIGIBLE SCHOOLS Students can attend full-time or part-time programs in Canada or abroad. Eligible institutions include all universities, community colleges, CEGEP 2, private vocational schools, distance education and correspondence courses 1. IF BENEFICIARY DOES NOT PURSUE POST-SECONDARY EDUCATION There are many options available if the student does not pursue postsecondary education, including transferring to another child, transferring money 3 to an RRSP, RDSP or withdrawing the income as an accumulated income payment 1. It is also important to know that an RESP can remain open for 35 years, which gives students who delay or prolong their postsecondary studies more time to receive benefits from their plan. ANYONE CAN START SAVING Parents, grandparents, other family members and friends can all help to save towards a child s post-secondary education. 1 Certain conditions apply. See prospectus for full details. 2 CEGEP means Collège d enseignement général et professionnel. 3 You may also be allowed to withdraw and transfer the accumulated income of up to $50,000 of earnings per subscriber from your RESP to your RRSP, your spouse s RRSP (provided he/she is a joint subscriber) or your spousal RRSP.

4 THE GRANTS RESP GUIDE GOVERNMENT PROGRAMS Today, many parents take advantage of Canadian Government Grants to help fund their child s post-secondary education. CANADA EDUCATION $7,200 SAVINGS GRANT LIFETIME MAXIMUM PER ELIGIBLE CHILD CANADA EDUCATION SAVINGS GRANT (CESG) 1 Paid on first: $2,500 of annual contribution $500 of annual contribution Net family income $46,605 2 Or less More than $46,605 2 to $93,208 2 Over $93,208 2 Basic CESG 20% = $500 20% = $500 20% = $500 Additional CESG 20% = $100 10% = $50 nil Annual total 40% = $600 30% = $550 20% = $500 Lifetime maximum $7,200 $7,200 $7,200 $2,000 CANADA LEARNING BOND LIFETIME MAXIMUM PER ELIGIBLE CHILD CANADA LEARNING BOND (CLB) 1 Initial payment when opening the plan $500 Annual CLB payment years 1 15 $100 Lifetime maximum $2,000 1 Certain conditions apply. See prospectus for full details. 2 This amount is indexed each year based on the rate of inflation.

RESP GUIDE KEY RESP BENEFITS 5 THE BENEFITS OF STARTING EARLY 1 The EARLIER your child is enrolled in an RESP, the LONGER your savings have time to grow. Start SAVING today and benefit from the POWER OF COMPOUND GROWTH. $100,000 $90,000 $80,000 $70,000 $60,000 $50,000 START EARLY. SAVE OFTEN. STAY INVESTED. $40,000 $30,000 $20,000 $10,000 $0 Newborn 2 4 6 8 10 Age of child when starting RESP contributions Income earned CESG Income earned on CESG 1 This hypothetical illustration is based on annual non-insured contributions of $2,500 and excludes fees. The income that would be earned is assumed to be a hypothetical rate of 5% gross per annum, compounded monthly, over 18 years.

6 KEY RESP BENEFITS RESP GUIDE THE BENEFIT OF GOVERNMENT GRANTS & TAX SHELTERING 1 This is a hypothetical illustration to demonstrate the advantages of tax sheltering and the Canada Education Savings Grant, which are the key benefits of investing in an RESP investment product vs. in a non-resp investment product 1. Over 18 years you could gain $20,000 or MORE! Only an RESP is eligible for the Canada Education Savings Grant worth up to $7,200. Depending on your financial situation and province of residence, other government grants can add even more to your savings. $86,598 Value Of Investment after 18 Years $65,341 Value Of Investment after 18 Years $20,341 $5,550 $7,200 $28,848 $45,000 $45,000 NON-RESP INVESTMENT PRODUCT (NOT Tax-Sheltered) 5% Growth Your total personal contributions over 18 years in a non-resp investment product Compound income earnings on your investment in a non-resp investment product. RESP INVESTMENT PRODUCT (Tax-Sheltered) 5% Growth Your total personal contributions over 18 years in an RESP investment product Compound income earnings on your investment in an RESP investment product Maximum CESG of $7,200 2 Compound income earnings on CESG 1 This hypothetical illustration is based on annual non-insured contributions of $2,500 and excludes fees. The income that would be earned is assumed to be a hypothetical rate of 5% gross per annum, compounded monthly, over 18 years. For the non-resp investment product, an annual individual income of $65,000 is assumed and an Ontario-based tax rate of 24% has been applied to the income earnings. Individual circumstances and actual results may vary. 2 This assumes the basic CESG which is equal to 20% of the total annual contributions to a maximum of $500 per eligible child, per calendar year. Certain conditions apply. See prospectus for full details.

RESP GUIDE THE SOLUTION 7 WILL YOUR CHILD DEPEND ON STUDENT LOANS? A $29,400 student loan will result in $45,290 REPAYMENT 1 Including interest! $15,890 1 $29,400 Cost of post-secondary program in 2017/2018 $29,400 2 RESP $16,902 3 contributions + Income on contributions + Government Grants 4 + Grant income 5 OR Interest $29,400 1 Student Loan LOAN This hypothetical illustration demonstrates the key benefit of investing with an RESP versus obtaining a student loan. You Have Options Who Will Fund Your Child s Education? $ $ Borrow the money Mortgage your home Pay-as-you-go Let your child earn the money or depend on student loans Withdraw funds from your personal savings, retirement funds or investments Start saving with an RESP Among graduating students who report having debt, the average amount owed is $28,000 6 It will take a graduate on average 9.5 years to pay off student loans 7 In 2016-2017 alone, approximately 497,000 students borrowed money 8 1 The student loan repayment schedule is based on a 10.5 year timeline where the graduate takes advantage of the 6-month grace period. Interest has been calculated using prime (3%) + 5%. Source: CanLearn Loan Repayment Estimator as of July 2018. 2 This example illustrates how much you may need to contribute to an RESP for a newborn child, invested over an 18 year period, to achieve a hypothetical end result of approximately $29,400 required for post-secondary education. This amount includes RESP contributions, the Canada Education Savings Grant (CESG) and income earned thereon. The lifetime maximum for the CESG is $7,200 per child. Certain conditions apply. See prospectus for full details. 3 This amount is calculated as $78,25 per month for 18 years and excludes fees. 4 Certain conditions apply. See prospectus for full details. 5 Income is calculated as a hypothetical rate of 5% growth (net of fees) as interest rates vary for different investment products and over time. 6 Canadian University Survey Consortium, 2018 Graduating Student Survey, June 2018. 7 Statistics Canada, National Household Survey 2011, as cited in Council of Ontario Universities, University Works, 2017. 8 Canada Student Loans Program, Actuarial Report as at 31 July 2017,June 2018.

8 ABOUT US RESP GUIDE Education Funds OUR ADVANTAGE In January 2018, Knowledge First Financial acquired Heritage Education Funds to pursue the shared goal of helping more Canadians access the best way to save for a child s future. Why choose Knowledge First Financial as your RESP provider? OVER 50Years OF EXPERIENCE Knowledge First Financial and Heritage Education Funds have a shared history. Since 1965, our RESP specialists have been helping families maximize their education savings. Today, we manage over 500,000 RESP agreements on behalf of parents, 500,000 grandparents, family members and family friends across Canada. AGREEMENTS 60,000 STUDENTS Each year, approximately 60,000 students attend post-secondary education with help from one of our plans. $6.4 Billion IN ASSETS With $6.4 billion in assets under management, Knowledge First Financial is Canada s largest RESP Company with a sole focus on education savings. $6.6 Billion IN PAYOUTS OVER $469 Million PAID OUT EACH YEAR IN THE LAST 4 YEARS On a combined basis, $6.6 billion has been paid to subscribers and beneficiaries to date. In the last four years, over $469 million has been returned to subscribers and beneficiaries each year. In 2017, the total payout for all plans was $570 million. STRATEGY FOR GROWTH Our conservative investment strategy is designed to protect the value of your savings while generating growth over the long term. Our portfolio managers choose Canada government as well as highly rated Corporate bonds for stability and security. As a means of diversifying investment risk and potentially enhancing overall investment returns, a portion of the portfolio is invested in Canadian-traded equity securities and US Exchange Traded Funds. As at June 30, 2018

RESP GUIDE THE HERITAGE PLANS PORTFOLIO 9 WHO WE WORK WITH FOUNDATION AND REGISTRAR Heritage Educational Foundation DEPOSITORY Scotiabank TRUSTEE AND CUSTODIAN RBC Investor Services Trust PORTFOLIO ADVISERS Guardian Capital LP Scotia Institutional Asset Management TD Asset Management Inc. and Yorkville Asset Management Inc. INSURANCE PROVIDER Sun Life Assurance Company of Canada EXTERNAL LEGAL COUNSEL Wildeboer Dellelce, LLP AUDITOR PricewaterhouseCoopers LLP

10 THE HERITAGE PLANS PORTFOLIO RESP GUIDE HOW IS MY MONEY INVESTED? Knowledge First Financial offers a smart approach to investing to give you peace of mind: Your contributions and government grants are 100% invested in various lower risk investments to protect the value of your savings. To increase your returns over the lifetime of the plan, is the income portion of the portfolio may be invested in a mix of equities. Canadian equities US and Canadian ETFs Investment-grade corporate bonds Income Contributions less fees Principal Government Bonds (federal, provincial and municipal) Guaranteed Investment Certificates ( GICs ) Mortgage backed securities and guaranteed mortgages

RESP GUIDE THE HERITAGE PLANS PORTFOLIO 11 CURRENT ASSET WEIGHTINGS For the period ending December 31, 2017 5.4% 7.8% 2.6% Category % of Total Investments 13.5% Federal Bonds 47.6% Equities 23.1% Provincial Bonds 13.5% Corporate Financial 7.8% Institution Bonds Principal Protected Notes 5.4% Short-Term Investments 2.6% 23.1% 47.6% THE VALUE OF LONG-TERM SAVINGS Annual compound rates of return 1 as at December 31, 2017: 3.7% 3.4% 3.7% 4.6% 1-Year 3-Year 5-Year 10-Year 1 Past performance is not indicative of future results.

12 THE HERITAGE PLANS RESP GUIDE HOW DO THE HERITAGE PLANS WORK? 1. Your contributions (less fees) 1 are returned at maturity. 2. Subscribers who selected the scholarship option will have up to 25%, up to 50% or up to 100% of sales charges 2,3 returned at maturity, depending on the scholarship option selected. 3. If you miss contributions and your plan is inactive at maturity, your plan will mature under the self-determined option so that you retain your contributions (less fees) and income. Maturity 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Enrollment Period Eligibility for CESG Contribution period Delay maturity up to July 31 st prior to the beneficiary s 21 st birthday Select pay-out option within 180 days of the maturity date, but no later than the maturity date. Maturity date may be delayed or advanced by up to 2 years 4. IF YOUR BENEFICIARY DOES NOT PURSUE POST-SECONDARY STUDIES, YOU CAN: 1. Request a refund of contributions less fees at maturity. 2. Change the beneficiary to another beneficiary 4. 3. Withdraw income as an accumulated income payment ( AIP ) 5 as taxable income. 4. Transfer the income to your RRSP, your spouse s RRSP (provided he/she is a joint subscriber) or your spousal RRSP 5. 5. Request a rollover of income into an RDSP 4. 1 Please see the Heritage Plans prospectus for a full list and details of all fees associated with the Heritage Plans. 2 The amount of the sales charges returned to subscribers at maturity under each of the scholarship options 1, 2 or 3 will depend on the amount of funds available in the sales charges refund account. 3 Sales charges are not returned under the self-determined option. 4 Certain conditions apply. See prospectus for full details. 5 Accumulated income may be withdrawn as taxable income by the subscriber less an additional federal tax of 20% (12% federal and 8% provincial for residents of Quebec) or, if transferred to an RRSP, up to a limit of $50,000 per subscriber (subject to RRSP contribution room).

RESP GUIDE THE HERITAGE PLANS 13 EDUCATIONAL ASSISTANCE PAYMENTS (EAPs) SELF-DETERMINED OPTION Typically for students pursuing programs of study of less than 2 years. All plan income and government grants (if applicable) paid to the student. Subject to tax. EAP QUALIFICATION CRITERIA In Canada: a minimum 3 week program of study Outside of Canada:»» Full-time: minimum 3 week program of study at a university or minimum 13 week program of study at all other foreign educational institutions»» Part-time: minimum 13 week program anywhere in the world END 35 YEARS RESP Lifetime Limit SCHOLARSHIP OPTION Provides 3 payment options and is typically for students pursuing 2 to 4 year programs. OPTION 1 OPTION 2 OPTION 3 One payment in 2 nd year of studies 100% income, grant and grant income with EAP Up to 25% of sales charges returned at maturity Payment in 2 nd and 3 rd year of studies 1/2 income, grant and grant income with 1 st EAP, remaining balance paid with 2 nd EAP Up to 50% of sales charges returned at maturity Payment in 2 nd, 3 rd, and 4 th year of studies 1/3 income, grant and grant income with 1 st EAP, half of remaining balance paid with 2 nd EAP, remaining balance paid with 3 rd EAP Up to 100% of sales charges returned at maturity Each EAP consists of a portion of government grants, income earned on government grants, income earned on contributions (less fees) and may include a non-discretionary payment to enhance an EAP 1. 1 This is a payment (non-discretionary) made to beneficiaries within a maturing beneficiary group, which represents: i) the amount remaining from plans that terminated and/or transferred out prior to their maturity date, less applicable refunds of sales charges (pre-maturity attrition) and/or ii) any EAPs that were not paid to beneficiaries due to ineligibility (post-maturity attrition). Please see the Heritage Plans prospectus for full details on pre- and post-maturity attrition.

14 KEEP IN TOUCH RESP GUIDE IMPORTANCE OF TWO WAY COMMUNICATION An RESP can be a long term commitment and, as in any relationship, it is important to communicate and keep each other informed. Knowledge First Financial provides you with various documents by mail or electronically to keep you well informed about your plan: A WELCOME PACKAGE includes a trade confirmation and is issued upon enrollment. Your ANNUAL STATEMENT OF ACCOUNT for the Heritage Plans is provided by the end of March. It covers the following key areas: Annual and lifetime activity of the plan Plan review and illustration of benefits Requesting delivery of plan documentation MANAGEMENT REPORT OF FUND PERFORMANCE AND AUDITED FINANCIAL STATEMENTS are available by March 30 th. INTERIM FINANCIAL STATEMENTS are available by August 31 st. GO BEYOND RECYCLING TO KEEP OUR PLANET GREEN. If you re looking for more ways to conserve the environment and save yourself time and money, receiving and viewing your documentation online can really make a difference. You can always access your Statement of Account and all annual publications at HeritageRESP.com. TAKE ACTION AND STAY INFORMED ABOUT YOUR INVESTMENT! Keep us up to date should your personal and/or financial information change. Stay informed and ask questions about your plan. Stay on top of your investments by reviewing all reports, statements and materials we send to you.

RESP GUIDE SOME FACTS ABOUT POST-SECONDARY EDUCATION 15 IMPORTANCE OF POST-SECONDARY EDUCATION Average salary of a Barista earning $12 per hour is approximately $22,150 1 Average salary of a 2005 graduate with a college diploma was $33,900 1 the year after graduation. After 8 years, the average salary grew to approximately $54,000 1 increased by 59%. Average salary of a 2005 graduate with a university degree was $45,200 1 the year after graduation. After 8 years, the average salary grew to approximately $74,900 1 increased by 66%. EARNINGS OVER AN 8-YEAR PERIOD Fine Arts Social Science Business Health Services Engineering $301,700 2 $413,200 2 $515,700 2 $519,900 2 $636,600 2 Graduates with a bachelor degree earned the above, over an 8 year period after graduation (2005 2013) 1 Source: Barista or Better? New Evidence on the Earnings of Post-Secondary Education Graduates: A Tax Linkage Approach. Education Policy Research Initiative 2016. 2 Salaries have been adjusted to reflect 2015 dollar values, accounting for inflation. Source: Canadian Union for Public Employees (CUPE) inflation calculator.

Education Funds FOR MORE INFORMATION CONTACT: Knowledge First Financial Inc. 50 Burnhamthorpe Road West, Suite 1000 Mississauga, Ontario L5B 4A5 Service: 1 800 363-7377 Fax: 1 800 668-5007 Head Office: 1 866 701-7001 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. Knowledge First Financial is a registered trademark of Knowledge First Financial Inc. 2018, Knowledge First Financial Inc. 1026-HST_ENG/08.18