There are essentially 3 types of withdrawals from an RESP:
EAP Education Assistance Payment
This amount is taxable in the beneficiaries hands (your kid) and is made up of Government Grant and Accumulated Income
PSE Post Secondary Education Payment
This is the amount you put into the RESP and can be withdrawn tax free
Non Educational Capital Withdrawal
This is when you take funds out if your kids don't go to school. This would cause you to have to repay government grant money, if they are in the plan.
Essentially, you would want to do the EAP first (It's restricted to $5,000 for the first 13 weeks of enrollment, nothing after that).
Kids would be taxed on it, however, typically they aren't going to be in a large tax bracket.
Benefit is, there are no limits after the first 13 weeks, so technically you could do a massive withdrawa in year 2l for whatever, as long as they are enrolled.
As far as the order to take, this is really up to you (or you and your advisor) to discuss and determine how to process the withdrawal.
If you have a Family RESP, siblings can share the grant money and accumulated income. So, if one of the three doesn't go to school, the other siblings can use the funds.
Also, keep in mind, RESP's can stay open for 35 years, so if your kids don't go to school right out of High School, they can stay there while they figure their lives out.
These things are actually a hell of a lot more complicated than you would think.
For example, kid goes to university, you didn't realize you should take the EAP first. You withdrew all your contributions first, and left all the grant money in for later. Kid decides he isn't going to go back to school. That grant money can be tied up in the RESP for quite sometime until you can withdraw it under the Accumulated Income Payment.
Then this would be taxable as income to the parents at their marginal tax rate plus an additional 20% penalty, but you could shelter this if you have RRSP room.
These opinions are entirely my own and do not represent any other person or organization.