Fraternite: I don't think you answered the RESP question either. You are assuming that the grandparents want to catch up. I read that the GPs want to move ahead. As per Rob's suggestion, the GPs can put $50,000 lifetime maximum into the RESP in year one, but then they forego the CESG for all remaining years.   

If the GPs cared abour betting the maximum CESG, with a lifetime maximum CESG of $7,200, equivalent to contributions of $36,000, to maximize CESG the GPs should keep ($36,000 - $2,500) = $33,500 for future contributions.  So the GPs should contribute ($50,000 - $33,500)  = $16,500 this year, $2,500 next year, and plan on contributing $2,500 in January for the next 12 years and $1,000 for 2030. They could even buy an annuity in the name of the grandson that would make the future RESP payments. Income from the annuity would be small, so attribution back to the GPs insignificant.