The Canada Education Savings Grant (CESG) Program was introduced in 1998 to encourage Canadians to save for the post-secondary education (PSE) of children. The program provides a grant of 20 percent on the first $2,000 of annual contributions to Registered Education Savings Plans (RESPs) for children up to the age of 17. The CESG is administered by the Learning and Literacy Directorate of Human Resources Development Canada (HRDC). Over the first four years of the program (1998/99 to 2001/02), close to $1 billion dollars was paid out in grants, with a total of $318 million being paid out in 2000/01. This formative evaluation of the CESG was conducted between January and October 2002. Its purpose was to provide reliable information on program relevance, program design and delivery, and to consider the early signs of program impacts. Evaluation findings include: (1) Program Relevance: (a) A number of factors act as potential barriers to PSE participation; (b) Less than half of Canadian households with children under the age of 18 had saved for the future education of their children, with some groups putting aside more than others; (c) There is uncertainty about the cost of post-secondary education and how much savings will be required; (d) The CESG is a key program in Canada designed to encourage adults to save for the future PSE of children through a combination of tax-sheltered income-earning savings and grant; (2) Characteristics of RESP Subscribers: (a) The evaluation identified a number of basic characteristics of subscribers; (b) Key factors affecting CESG take-up include parent's education, age and school aspirations for their children, the child's performance in school, and province of residence; (c) RESP contributions rise with income and are significantly lower than the population share for parents with low household income and higher for those with high household income; (3) Design and Delivery: (a) Awareness of the CESG and its rules is low in lower income groups and rises with income level; (b) Government promotion materials are not particularly effective in reaching subscribers and potential subscribers; (c) The majority of RESP subscribers are satisfied with service delivery, although satisfaction was lower for clients of scholarship foundations; (d) Most promoters/trustees are satisfied with HRDC program delivery, although some areas were identified for improvement; (e) A number of factors were identified as affecting program delivery; (f) Administrative data systems are effective in delivering grants, although they were not well suited to developing the sample frame for the survey of RESP subscribers and to developing a comparison group for evaluation purposes; and (4) Early Signs of Program Impacts: (a) The available evidence indicates that the number of individuals contributing to RESPs increased significantly when the CESG was introduced; (b) There is evidence that the CESG encouraged some subscribers to contribute more to RESPS. CESG Logic Model is appended. (Contains 12 tables, 2 charts and 45 footnotes.)